Old vs New Labour Laws: Everything you need to know about labour code reforms
Minimum wages, payment rules and bonus rules were in separate Acts and varied by state/sector. The Code on Wages consolidates minimum wage, payment and bonus rules and enables a national floor wage while retaining state powers to set higher minima.
1. What changed — a quick summary
Old: 29 separate central labour laws covering wages, industrial relations, social security, and occupational safety (Payment of Wages Act, Minimum Wages Act, Factories Act, and many others).
New: These 29 laws have been consolidated into four codes, Code on Wages, Industrial Relations Code, Social Security Code, and Occupational Safety, Health & Working Conditions (OSH) Code — to standardise and simplify compliance across India.
2. Scope and who is covered
Old: Laws had patchy coverage, many applied only to organised/factory sectors; informal, contract and gig workers were often outside core protections.
New: The codes are written to extend coverage more uniformly, explicitly recognising gig and platform workers, fixed-term employees and wider categories in the unorganised sector; social security provisions are broadened. This is intended to formalise many previously excluded workers.
3. Wages & benefits — what’s different
Old: Minimum wages, payment rules and bonus rules were in separate Acts and varied by state/sector.
New: The Code on Wages consolidates minimum wage, payment and bonus rules and enables a national floor wage while retaining state powers to set higher minima. It requires employers to provide written contracts and standardises wage compliance.
4. Working hours, overtime and shifts
Old: Standard eight-hour day rules existed but enforcement and exemptions varied across statutes.
New: The codes permit daily working hours to be extended up to 12 hours provided the weekly limit is 48 hours; overtime provisions remain (typically paid at higher rates). Night-work rules for women are specifically addressed with safeguards. These changes increase flexibility but also shift compliance responsibilities to employers.
5. Industrial relations, layoffs and retrenchment
Old: Firms with 100+ employees typically needed government permission for layoffs/closures in some states; industrial dispute procedures were fragmented.
New: Thresholds for mandatory government approval for layoffs/closures have been raised to 300 employees, giving firms more latitude for workforce adjustments; the Industrial Relations Code also seeks to streamline dispute resolution mechanisms. Trade unions have criticised this as weakening worker protection.
6. Social security & gig workers
Old: EPF/ESI/social security schemes primarily covered organised-sector employees; gig/platform workers were largely outside formal schemes.
New: The Social Security Code explicitly includes gig and platform workers, aims to widen social-security access (pensions, gratuity, health coverage) and promotes digital registration and portable benefits. It also reduces the qualifying period for some benefits (for example, fixed-term employees’ access to gratuity was eased under the reforms).
7. Occupational safety, health and working conditions (OSH)
Old: Multiple sectoral safety laws with differing rules for factories, mines, construction etc.
New: The OSH Code consolidates safety, health and welfare provisions across sectors, emphasising standards, inspections, medical checks and employer responsibility for workplace safety. It also aims to harmonise reporting and enforcement.
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