India’s workforce is rapidly transforming — from traditional full-time employees to freelancers, platform workers, delivery partners, creators, and other gig-economy earners. To keep pace with this shift, the government has introduced a consolidated framework of four new labour codes, aiming to modernise outdated laws and bring millions of workers under wage protection and social security coverage.
These codes are designed to create uniformity, transparency, and worker safeguards across industries. But what do they really mean for India’s changing workforce?
Let’s break it down clearly.
1. A Modern, Unified Wage Definition
Under the new labour codes, “wage” now has a standard, simplified definition across all sectors.
What changes?
Allowances cannot exceed 50% of total salary
Basic salary must be at least 50%
PF and social security contributions will be calculated on this basic wage
Why this matters
Many companies artificially lowered “basic pay” to reduce PF contributions.
A uniform wage rule ensures:
Better retirement savings
Higher social security benefits
Transparent salary structures
Workers, especially in private firms, now receive more long-term financial protection.
2. Social Security Expanded to Gig & Platform Workers
One of the most progressive changes:
Gig and platform workers — delivery partners, cab drivers, freelancers, creators, etc. — will now receive formal social security benefits.
➕ What gig workers can get:
Accident insurance
Maternity benefits
Disability coverage
Life/disaster insurance
Old-age protection through welfare funds
The codes officially recognise gig workers as a distinct labour category, bridging a long-standing gap in India’s unorganised sector.
3. Universal Social Security Framework
The new codes aim to bring every category of worker under some form of social security:
Contract workers
Fixed-term employees
Migrant workers
Self-employed
Gig/platform workforce
Unorganised labour
Traditional salaried employees
This creates a single social security umbrella, something India never had before.
4. Flexible Hiring Through Fixed-Term Employment
Businesses can hire workers on fixed-term contracts with the same benefits as permanent staff.
Biggest advantages:
Organisations can scale workforce quickly
Workers get PF, gratuity (even if contract < 5 years), and leave benefits
Reduced exploitation in contract labour
This is crucial for fast-changing industries like tech, manufacturing, retail, aviation, and services.
5. Better Protection for Women & Night Shifts
The new codes open night-shift and expanded employment opportunities for women — with mandatory safety conditions.
Women can now:
Work night shifts legally
Access equal employment and wage protection
Claim maternity benefits across more employment types
6. Stronger Rules for Working Hours & Overtime
The codes standardise working hours, weekly offs, and overtime payments nationwide.
Expected measures include:
48-hour weekly cap
12-hour maximum daily work (with breaks)
Overtime payment at 2x wage rate
Mandatory weekly rest
Industries with seasonal or intense workloads — manufacturing, logistics, retail, healthcare — gain flexibility while ensuring worker safety.
7. Gratuity Now Available to More Workers
Earlier, gratuity required 5 years of continuous service.
Under the new framework:
Fixed-term employees
Gig workers (through welfare schemes)
Platform workers
may receive gratuity benefits proportional to their tenure.
A major win for India’s fluid workforce.
Why the New Labour Codes Matter for India’s Future
These reforms acknowledge that India’s workforce is no longer limited to office jobs.
A modern economy requires modern labour protections.
The codes aim to:
Formalise informal jobs
Strengthen worker security
Improve employer compliance
Encourage investment & business ease
Support the rapidly expanding gig economy
India is moving toward a hybrid labour environment where salaried, gig, and self-employed workers are supported through uniform, transparent, and inclusive laws.
❓ FAQs
1. What are India’s four new labour codes?
They are the Wage Code, Social Security Code, Industrial Relations Code, and Occupational Safety, Health & Working Conditions (OSH) Code.
2. Do the new labour codes help gig workers?
Yes, for the first time, gig and platform workers get access to welfare funds and social security benefits.
3. How does the new wage definition affect employees?
Basic salary must be at least 50% of total pay, increasing PF and long-term savings.
4. Will working hours change under the new codes?
Yes, they will be standardised with a 48-hour weekly limit and regulated overtime rules.
5. Do fixed-term employees get gratuity?
Yes, gratuity will be available on a pro-rated basis without the 5-year minimum requirement.
6. When will the new labour codes be implemented?
Implementation will roll out state-wise, depending on notification and rule framing.
Published on : 22nd November
Published by : SMITA
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