New Labour Codes 2025 in India | UPSC Notes

The Government of India has announced that the four Labour Codes on Wages, Industrial Relations, Social Security, and Occupational Safety, came into force from 21 November 2025. These codes merge 29 old labour laws into four simple, modern, and unified laws.

• Important for Prelims & Current Affairs
• Relevant for GS Paper II (Polity & Governance) and for GS Paper III (Economy)
• Relevant for Ethics Paper
• Relevant for Essay Topics(governance reforms, labour welfare, social justice, etc.)

Labour codes are consolidated sets of laws that regulate wages, industrial relations, social security, and occupational safety for workers across India.

Earlier, India had 29 separate labour laws, each addressing specific aspects of employment. Now, these four laws have been combined into a few clear codes that deal with workers’ wages, safety at the workplace, social security, and relations between employers and workers.

• These codes apply to all workers, both organised and unorganised sectors.
• Guarantee minimum wages, social security, safe working conditions, and timely payment.​
• Bring nationwide benefits, portability of entitlements, less paperwork, easier compliance, and updated laws for new job roles.​
• Promote higher participation of women and protect youth and migrants.
• Social security coverage has expanded from 19% in 2015 to 64% in 2025, and these new codes will widen the net even further.

Also read: Unlawful Activities (Prevention) Act, 1967 (UAPA): History, Provisions, Amendment | UPSC Notes

The main goal is to build a simple, modern, and inclusive labour system.

• Extend labour law protections to all workers, not just those in the organised sector.
• Bring the massive informal economy (approximately 90% of the workforce) under social security cover.
• Ensure timely payment of minimum wages with a national floor wage that cannot be reduced by any state.
• Reduce the regulatory burden that discourages businesses from formalising their workforce.
• Ensure equal remuneration for work of a similar nature and allow women to work in all sectors, including night shift, with proper safety measures.
• Support India's self-reliance by making businesses more competitive and attracting global investment.

Also read: 8th Pay Commission in India UPSC Notes: Objectives, Composition, NPS vs UPS

The entire framework consolidates into four functional codes, each addressing a specific aspect of labour governance.

Also read: Anti-Defection Law in India

The new Codes bring many positive changes by merging, updating, and strengthening old protections.

Also read: PM Gati Shakti National Master Plan: Government Scheme for UPSC

India’s older labour laws had grown complex over time, making reforms necessary to improve clarity and effectiveness. 

• Colonial-era legislation: Many laws dated back to the 1930s–1950s, pre-Independence and early post-Independence periods, when India's economy, labour patterns, and global context were entirely different.
• Complex system: India had 29 separate Central labour laws spread across various subjects, creating overlaps, contradictions, and massive compliance confusion.
• Poor coverage: Minimum wage and social security protections covered only a fraction of workers. Large sections like gig workers, informal workers, and platform workers had zero legal recognition or protections.
• Outdated work definitions: The old laws could not accommodate modern forms of work, the gig economy, platform work, and remote work, which were emerging rapidly but had no legal framework.
• Lack of portability: Social security benefits were tied to specific states or employers. Migrant workers and job-changers lost entitlements when moving.

The New Labour Codes deliver comprehensive benefits for workers, employers, and the economy as a whole. These are transformative, far-reaching improvements across multiple dimensions.

• Universal Wage Protection: All workers, whether in factories, farms, shops, or gig platforms, now have a statutory right to minimum wages, ensuring no one works below the minimum living standard.​
• Formal Employment and Job Security: Mandatory appointment letters give every worker written proof of employment, protecting job security and establishing clear work terms.​
• Social Security Coverage for All: Workers across sectors-organised, unorganised, self-employed, gig, platform- now have access to provident funds, pensions, insurance, maternity benefits, and disability protection.​
• Timely Wage Payment: Mandatory compliance ensures wages are paid on time, reducing financial stress and boosting morale.
• Simplified Compliance: Single registration, single license, single return replaces multiple overlapping registrations, drastically reducing administrative burden and costs.​
• Lower Compliance Burden: Contract labour threshold raised to 50+ workers; factory threshold raised to 20–40 workers, depending on power use; reduces regulatory burden on small units.
• Formal Employment Boost: Simplified registration and compliance incentivise businesses to formalise, expanding the tax base and formal economy.​
• Employment Generation: Flexible work arrangements and ease of doing business encourage business growth and job creation.​

The new Labour Codes are an important move towards a fair and modern system for workers. But their success depends on how well states put them into action. Workers and employers need clear information, easy ways to solve problems, and timely rules. Regular reviews and discussions with all stakeholders will help keep the system updated and inclusive. This will support a strong and future-ready workforce for India’s growth in the years ahead.

Unlock your UPSC Success with SuperKalam

Get instant doubt clearance, customised study plans, unlimited MCQ practice, and fast Mains answer feedback. 

Join thousands of aspirants learning with India’s AI-powered mentor today!