← Policy & Regulation: Sector rules & licensing (all topics)
New labour code
What it is
Four codes consolidating 29 central labour laws - Wages (2019), Industrial Relations, Social Security and Occupational Safety, Health and Working Conditions (all 2020) - brought into force on 21 Nov 2025
The pivotal change is a uniform definition of wages requiring basic pay plus DA to be at least 50% of total remuneration, which resets provident fund, gratuity, bonus and overtime calculations across every employer
Impact on industries
- Raises employment cost structurally - firms with basic pay at 25-35% of CTC face gratuity and PF liabilities up 25-50%, hitting labour-intensive sectors hardest
- Fixed-term staff now qualify for pro-rata gratuity after one year instead of five, removing much of the cost advantage of contract and project-based staffing
- Replaces fragmented registration, licensing and return filing with a unified framework, a genuine compliance saving for multi-state operators
- Extends social security and appointment letters to gig and platform workers, formalising a workforce logistics and delivery businesses depend on