India’s new labour codes: What they mean for workers and businesses

India’s federal government on Friday announced the implementation of four new labour codes, replacing decades-old laws governing factories and workers.

The codes – covering wages, industrial relations, social security and occupational safety – will now be applied uniformly across the country.

Easier hire-and-fire rules

Companies with up to 299 employees can now lay off staff without seeking government approval, as the threshold has been raised from 100 to 300.

Earlier, firms with 100 or more workers needed government-approved employment conditions. The new codes increase this limit, reducing compliance requirements for smaller businesses.

What changes for workers

Employers must now issue formal, written employment letters to all workers. Social security benefits will be extended to all categories, including gig workers.

The codes introduce a national floor wage to reduce regional disparities.

Workers will also be entitled to free annual medical health checks.

What changes for businesses

Firms can employ workers for shifts of 8–12 hours a day, with a weekly limit of 48 hours. Currently, shifts are capped at 9 hours.

Overtime will be paid at twice the standard wage rate.

Contractors can obtain a single licence to operate nationwide, valid for five years.

Women workers get flexibility

The codes require employers to ensure equal pay for equal work.

Women will be allowed to work night shifts with safety measures, replacing earlier state-level restrictions in certain industries.

Maternity benefits, including 26 weeks of paid leave, are now extended to all women workers in unorganised sectors.

Boost for gig workers

For the first time, the labour codes define gig and platform work, bringing these categories under social security provisions that were previously unavailable to them.

(With inputs from Reuters)