The Central government has announced the enforcement of four overhauled labour codes, marking one of the most sweeping reforms to India’s industrial and workplace regulations in decades.
These revamped codes — covering wages, industrial relations, social security, and occupational safety — will now operate uniformly across the entire country, replacing an outdated maze of factory and labour laws.
The four comprehensive codes — the Code of Wages, the Industrial Relations Code, the Code on Social Security and the Occupational Safety, Health and Working Conditions Code — eliminate 29 separate legislations and bring them under a streamlined, modern legal architecture.
The Centre’s push for reform stems from a long-recognised reality: India’s older labour laws were scattered, overly complex and unsuitable for today’s economy.
They imposed heavy compliance burdens on employers, discouraged job creation, and left entire categories of workers — including gig, platform, migrant and MSME workers — without consistent social protection.
Different states were moving in different directions with their own amendments, worsening the lack of uniformity. The new codes seek to settle this unequal and disjointed system.
Evidence from states that undertook labour reforms earlier shows striking outcomes.
Gujarat’s economy surged with a GSDP of ₹25.63 trillion in 2023–24, and its manufacturing sector’s share stands far above the national average.
Punjab has recorded steady economic expansion and large-scale investment inflows, promising lakhs of jobs.
Bihar has witnessed rapid GSDP growth, while Maharashtra continues to lead the nation economically with rising investments and a steadily growing manufacturing workforce.
States like Uttar Pradesh, Andhra Pradesh, Haryana and Rajasthan have each posted major gains — from higher organised-sector employment to expanded industrial output and increased participation of women in the workforce — showcasing how labour reforms can unlock jobs, investments and productivity.
However, even as states have aligned their rules with the four national codes, the lack of central-level implementation has caused uneven results.
The absence of uniform enforcement has kept social security coverage inconsistent for workers and complicated compliance requirements for companies functioning across multiple states.
The new framework introduces significant improvements across worker groups. For the first time, gig and platform workers receive formal legal recognition.
Aggregators will need to contribute to a dedicated welfare fund, and commuting accidents are treated as work-related — a long-standing demand.
Aadhaar-linked universal account numbers will allow benefits to follow workers across state borders.
Contract workers gain additional safeguards as principal employers become responsible for their health and social security benefits, including mandatory annual medical check-ups.
Women employees receive enhanced protections, from equal pay to expanded maternity benefits, night-shift opportunities with strict safety protocols, and a broader definition of family that now includes parents-in-law.
Migrant workers are assured wage parity, portable ration benefits and stronger safeguards against wage denial.
Additionally, sector-specific rules extend protections to workers in industries ranging from plantations and textiles to mines, IT, manufacturing clusters and export hubs.
A major structural shift comes with the strengthening of Fixed Term Employment (FTE).
Unlike traditional contract systems, FTE places workers directly on company rolls with all the benefits accorded to permanent staff — equal pay, regulated hours, medical entitlements and eligibility for gratuity after just a year.
The government’s argument is clear: this model will encourage formal hiring, reduce excessive contractualisation and expand social security more predictably and transparently.
With the four labour codes now in force, India aims to move toward a more uniform, business-friendly and worker-protective environment — one that balances flexibility with fairness and modernises the country’s labour landscape for the years ahead.
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