By Divya Baweja
The Ministry of Labour and Employment has announced the implementation of the four Labour Codes with effect from November 21 2025. The rollout of new Labour Codes represents a path-breaking policy reform to modernise the extant labour laws and protect the vulnerable sections of the workforce, which typically get excluded from the social security net.
The Labour Codes reforms are driven by three key objectives, i.e. simplifying compliance, streamlining enforcement and modernising outdated laws.
By consolidating and rationalising 29 central legislations into four comprehensive codes, viz. the Code on Wages, 2019; the Code on Social Security, 2020; the Industrial Relations Code, 2020; and the Occupational Safety, Health and Working Conditions Code, 2020 — the government has sought to create a unified and coherent legal framework that replaces the earlier fragmented and overlapping statutes and drives labour reforms for Aatmanirbhar Bharat.
The codes emphasise uniform definitions (such as “wages,” “employee,” and “establishment”), harmonised compliance mechanisms, and a technology-driven approach to registration, inspection, and reporting. This shift is not merely administrative; it signals a philosophical change.
Where the older laws were enacted more for factory floors and permanent employees, the new codes extend protections to a broader spectrum — including gig workers, platform workers, fixed-term employees, dock workers, plantation workers, mine workers, etc. and those working under new-age digital arrangements.
What makes the code on social security noteworthy?
The code on Social Security, 2020, is particularly noteworthy. Until now, workers earning through apps or digital platforms existed in a regulatory grey zone — neither being considered as traditional employees nor self-employed entrepreneurs. The code on Social Security, 2020, bridges this gap by defining “gig” and “platform” workers (i.e. those driving cabs for app-based aggregators, delivering food and groceries, or offering freelance digital services) for the first time. This recognition lays the foundation for social protection schemes that address the realities of today’s fluid labour market.
The social security code empowers the Central government to frame schemes for gig and platform workers relating to life and disability cover, accident insurance, health and maternity benefits, old-age protection, and other welfare measures. It also introduces a mechanism where aggregators and digital platforms contribute a small percentage (1–2%) of their annual turnover to a Social Security Fund dedicated to these workers.
Why is this step significant for the younger workforce
This is a monumental step for the younger workforce, which often prioritises autonomy over long-term security. This certainly marks a critical step forward as India’s 15 million-strong gig workforce, which is projected to triple by 2030, will have access to basic social protection without sacrificing their flexibility under the new labour codes. By providing a social safety net that travels with the worker, regardless of the employer or platform, the code aligns with the new generation’s mobile, multi-job career paths. It also bridges the gap between formal and informal work by recognising that flexibility should not come at the cost of basic protections.
The Codes also complement India’s broader skill development mission. The Occupational Safety, Health and Working Conditions Code (OSH Code) mandates that employers ensure safe and decent working conditions even in non-traditional setups, such as remote or field-based work.
Meanwhile, the Code on Wages guarantees a national floor wage and gender-neutral pay structures, ensuring fair compensation across industries. Equally important is how the new regime under Labour Codes encourages short-term and fixed-term employment, enabling companies to hire youth for project-based or seasonal work without denying them statutory benefits like provident fund, pro-rata gratuity, and leave encashment. This flexibility benefits both sides — companies get a responsive workforce, and young professionals gain exposure, skill diversity, and formal recognition of their work experience.
The implementation of new Labour Codes along with other initiatives like the Skill India Mission, Digital India, and Pradhan Mantri Kaushal Vikas Yojana & Pradhan Mantri Viksit Bharat Rozgar Yojana shall create an ecosystem that connects employability, security, and opportunity – three pillars critical for India’s youthful workforce. Many young Indians today are not just job-seekers but job creators, building start-ups, freelancing, or offering services on online platforms. The Labour Codes acknowledge this entrepreneurial spirit.
By simplifying registration and compliance norms for small establishments and start-ups, and introducing unified digital filings, the new regime reduces bureaucratic friction. This simplification is vital for young entrepreneurs who value agility and wish to formalise their operations without navigating complex, overlapping regulations.
Moreover, the universal definition of “wages” and unified registration process make it easier for start-ups and small firms to ensure compliance transparently, thereby extending basic rights and benefits to interns, apprentices, and young hires who are often the backbone of such ventures.
Beyond economics, the Codes emphasise the dignity of work — a principle that resonates deeply with the new generation. Whether one is coding for a start-up, delivering via an app, or working remotely from a small town, the framework aims to ensure basic safety, fair pay, and respect for one’s contribution. The OSH Code’s emphasis on health and safety standards, even for workplaces in emerging sectors, sends a clear message that all work is valuable, and every worker deserves protection.
The Codes also invite a collaborative model, where industry, government, and digital platforms work together to design innovative welfare schemes — perhaps using technology to track work hours, link benefits to Aadhaar, or provide insurance and pension options.
The new Labour Codes represent India’s recognition that the future of work is already here — decentralised, digital, and dynamic. For the country’s young workforce, these reforms offer not just protection but empowerment. By balancing flexibility with fairness, and innovation with inclusion, India has taken a decisive step towards a labour ecosystem where every youth, whether a gig worker or an entrepreneur, can pursue opportunity with dignity and security.
In that sense, the Codes are more than just a legal reform; they are a promise to ensure that India’s demographic dividend translates into a sustainable, equitable future of work. The implementation of Labour Codes marks a significant shift for organisations and employees in India, empowering and safeguarding the rights of the workforce while promoting Ease of Doing Business and driving the nation’s economic growth, and aligning labour practices with global standards.
(The writer is Partner, Deloitte India)