As HR professionals, staying compliant is not just a legal requirement — it’s a strategic priority. India’s New Labour Codes, along with associated labour institutions, are expected to come into full effect by the end of 2025 or in the following years. These reforms will bring about significant changes poised to reshape workplace dynamics, compensation structures, and employee well-being initiatives across industries — with specific provisions planned for the unorganized sector as well.
I’ve shared a breakdown of the upcoming changes on LinkedIn. Click the link below to review:
- For Employees/Workers: https://www.linkedin.com/pulse/major-labour-law-reforms-coming-soon-you-ready-raj-kumar-singh-wgqec
- Actionable Points for HR: Coming soon…
Below is an overview of the key reforms that every HR professional, compliance leader, and business decision-maker should be familiar with:
1. 50% Basic Pay Rule:
The new regulations mandate that Basic Pay must constitute at least 50% of total Cost to Company (CTC). This change aims to bring greater transparency and fairness to salary structures—impacting:
- Provident Fund contributions
- Gratuity payouts
- Bonus calculations
2. 4-Day Work Week Option:
Employers may soon offer a 4-day work week, as long as the total weekly working hours don’t exceed 48 hours. This brings flexibility and supports modern workforce expectations.
3. Extended Maternity Benefits:
Maternity leave may extend up to 34 weeks, along with provisions for Work-from-Home (WFH) support.
4. Social Security for Gig Workers:
A transformative step towards inclusivity, gig and platform workers will now be entitled to:
- Provident Fund
- Insurance benefits
- Legal protection and dignity in non-traditional roles
5. Mental Health at Work:
Mental health support is now more than a wellness trend—it’s a mandatory compliance area. Organizations must offer:
- Awareness programs
- Psychological support resources
- Confidential counselling access
6. Updated Working Hours & Overtime:
The new codes redefine working hours, rest periods, and overtime compensation. There will be:
- Clearer norms
- Stricter enforcement
- Higher penalties for violations
7. Occupational Safety, Health & Working Conditions (OSH Code):
Workplace safety rules are getting tougher. Employers must ensure:
- Enhanced health and safety protocols
- Regular audits
- Training on risk prevention
8. Universal Employment Letter Mandate:
All employees—regardless of contract type—must receive a standardized employment letter detailing:
- Role and responsibilities
- Pay structure
- Terms of engagement
9. Gratuity for Fixed-Term Employees:
Under the new Social Security Code, employees on fixed-term contracts will now be eligible for gratuity on a pro-rata basis, without the 5-year minimum requirement.
10. Single License for Multiple Locations:
The Occupational Safety, Health and Working Conditions (OSH) Code proposes a centralized registration system, allowing companies to:
- Obtain one license for operations across multiple locations/states
- Streamline inspections and compliance tracking
11. Mandatory Digital Wage Payments
All wages must be paid electronically or through bank transfer, eliminating cash-based transactions except in exceptional circumstances.
12. Gender-Neutral Workplace Policies:
The new codes promote non-discriminatory practices in:
- Hiring
- Compensation
- Promotions and transfers
13. Increased Penalties for Non-Compliance:
Penalties under all four codes are significantly higher and may include:
- Fines up to Rs. 1,00,000 (1 Lakh) or more
- Jail terms for repeat violations
- Digital inspections & reporting
14. Compulsory Reskilling Fund for Retrenched Workers:
Companies will be required to contribute to a reskilling fund equal to 15 days’ wages for every retrenched worker.
15. Creche Facility Mandatory for Units with 50+ Employees:
Under the OSH Code, any establishment with 50 or more employees must provide creche facilities, either in-house or through a tie-up.
16. Stronger Contractor Compliance & Clarity
The OSH Code introduces clearer provisions for contract labour, requiring:
- Licensing of contractors
- Benefits of parity in working conditions
- Responsibility for safety, PF, ESI
17. Digitization of Labour Records
All companies will be required to maintain and upload digital registers and records on a centralized portal:
- Attendance
- Wages
- Leaves
- Compliance documents
18. Single Universal Registration Number for Employees
A move is expected to link all employees—regular, contractual, gig—under a Universal Labour Identification Number (ULIN) for benefits, tracking, and mobility across employers.
19. Skill India & Apprenticeship Promotion
New compliance norms will integrate mandatory targets for companies to hire apprentices/interns under government schemes like:
- NAPS (National Apprenticeship Promotion Scheme)
- Skill India
20. Real-Time Grievance Redressal System
The IR Code emphasizes establishing grievance redressal committees and encourages employers to:
- Implement internal online redressal systems
- Resolve employee complaints within defined timeframes
21. Increased Focus on Internal Committees for PoSH Compliance
All organizations with 10+ employees must constitute an Internal Committee (IC) under the Prevention of Sexual Harassment (PoSH) Act. The Labour Codes will emphasize:
- Annual PoSH reporting compliance
- Employee awareness programs
22. Mandatory Display of Employee Rights & Wages
The new codes require employers to prominently display:
- Working hours
- Wage details
- Grievance contacts
- IC/HR committee info
23. Simplified Layoff & Closure Norms for Mid-Size Employers
Under the Industrial Relations Code, the threshold for needing government approval for layoffs/closures is being raised from 100 to 300 employees.
24. Women Allowed to Work in All Shifts with Consent & Safety Measures
The new codes allow women to work night shifts or in hazardous sectors provided:
- Written consent is taken
- Safety, transportation & security are ensured
25. Remote Work & Hybrid Policy Guidelines (Expected)
While not formally part of the labour codes, MNCs and tech-sector bodies have been lobbying for:
- Government recognition of WFH as a formal mode of work
- Tax, PF, and compliance relaxations for remote setups
26. Push for ESG & Diversity Reporting in HR Disclosures
SEBI and MCA (Ministry of Corporate Affairs) are gradually making it mandatory for large firms to report:
- Gender diversity
- Inclusive efforts
- Labour practices (under ESG frameworks)
27. Integration of Gig & Platform Workers into Formal Schemes
The Social Security Code aims to:
- Register gig/platform workers in a centralized database
- Provide access to ESI, PF, maternity benefits, accidental insurance
- Enable government and aggregators (e.g., Swiggy, Ola) to contribute
28. Skill Passport Linked to UAN/Digilocker
The Ministry of Skill Development is collaborating with EPFO and Digilocker to create a Skill Passport, recording:
- Verified training
- Certifications
- Employment history
29. Mandatory Reskilling After Maternity Leave
Proposed under diversity and inclusion recommendations, organizations may be incentivized or mandated to provide:
- Re-assessment programs
- Digital skill upgrades
- Flexible onboarding after extended maternity breaks
30. Uniform Working Conditions Across Sectors
Under OSH and IR codes, states are being nudged to adopt uniform rules for:
- Contract staffing
- Minimum safety standards
- Leave, holidays, and facilities
31. Digital Labour Market Platforms (Govt-Led)
The government is rolling out platforms like National Career Service (NCS) and e-Shram, which:
- Match job seekers to openings
- Verify candidate credentials
- Connect unorganized workers to schemes
32. Environmental Health & Employee Well-being Provisions
Under revised OSH rules and ESG initiatives, employers are expected to:
- Track and report air quality, noise, lighting, and ergonomic standards
- Provide mental wellness access, stress audits, and counseling
33. Annual HR & Labour Compliance Self-Audit Mandate
There is increasing push toward mandating annual self-declaration and audit of:
- Minimum wage compliance
- Working hour tracking
- Welfare facility provision
34. Mandatory Policy on Remote & Hybrid Work
Expected through DoPT or Ministry of Labour guidance (especially for IT, BFSI, EduTech):
- Employers may need to frame a formal policy on hybrid work
- Cover working hours, data security, and expenses reimbursement
35. Standardized Leave Rules Across States
The central government is proposing a model leave rulebook under OSH Code for:
- Annual leave, sick leave, and casual leave
- Maternity, paternity, adoption leave
36. Stronger Employee Surveillance Disclosure Norms
With increased digital surveillance (CCTV, keystroke monitoring, etc.), new policies may:
- Mandate explicit employee consent
- Require privacy impact disclosures
37. Real-Time Labour Welfare Contribution Portals
EPFO, ESIC, and state welfare boards are being integrated for:
- Real-time contribution tracking
- Automated benefit eligibility calculations
- Central dashboards for employers
38. Public Grievance Scorecard for Employers
Under the Ease of Doing Business & Labour Inspections reform:
- Companies may be graded on grievance handling, PoSH response, and legal disputes
- This scorecard may be made public or used during inspections
39. Formalization of Workforce Mental Health Policies
The Labour Ministry and IR Code consultations are increasingly encouraging:
- Mandatory employee mental wellness policies
- Tie-ups with counselors or wellness platforms
40. Increased Penalties for Delayed Wage Payments
Under the Code on Wages, stricter penalties are proposed for:
- Salary delays
- Unauthorized deductions
- Bonus non-payment
41. Mandatory Grievance Committee in All Establishments
Even smaller firms (10+ employees) may be required to:
- Setup/Form a grievance redressal committee
- Publish complaint timelines and escalation paths
42. AI & Algorithmic Transparency in Workforce Decisions
Emerging under the proposed Digital India Act, HR tech platforms will need to:
- Disclose if AI is used in hiring, promotion, or exits
- Ensure fairness and remove bias
43. Multi-Employer PF/ESI for Gig & Freelancers
The Social Security Code introduces:
- PF contributions by multiple clients/employers of a freelancer or gig worker
- Workers can track and withdraw via mobile
44. Universal Contractor Licence for Pan-India Work
Labour Codes proposes, a single unified licence for contractors operating in multiple states
45. Wage Equalization for Similar Roles Across Locations
States are aligning under the Centre’s push to ensure uniform wage structures for similar jobs across metro and non-metro areas
46. Skill-Based Pay Bands to Replace Designation-Based Slabs
Proposed via Skill India and NSQF initiatives, employers may align pay scales with skill levels, not just job titles
47. Digital Onboarding of Contract Workers & Daily Labour
Mandatory digital onboarding and KYC for:
- Blue-collar, contract, and daily wage staff
- Capture via mobile + geo-fencing
48. Migrant Worker Welfare Mandates
New codes require:
- Provision of transit housing, skill recognition, and tracking
- Employer-host state coordination
49. Mandatory HRMS/Payroll System Integration for Compliance
Companies with 50+ workers may be required to integrate payroll and leave systems with government dashboards.
50. Voluntary Retirement Scheme (VRS) Guidelines to be Codified
To avoid misuse and disputes, standardized VRS rules are expected covering:
- Notice periods
- Ex-gratia norms
- Re-employment restrictions
Key Takeaway – Theme Wise Breakdown:
Big changes are coming — and being prepared is no longer optional. These 50 upcoming labour law reforms will impact how you hire, pay, and support your workforce. Now’s the time for HR and business leaders to get ahead, stay compliant, and turn these changes into opportunities. 😊
📝 Your feedback, thoughts, or specific requirements are most welcome — please share them in the comments below. 🙏
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