On November 21, 2025, India implemented a historic reform of its labor law architecture. Two significant labor codes – Industrial Relations Code (2020) and Occupational Safety, Health and Working Conditions (OSHWC) Code (2020) – became fully enforceable nationwide, and majority provisions of the Code on Wages (2019) and Code on Social Security (2020) have also come into force. We highlight below the key legal reforms, their implications, and some of the challenges employers and workers may face.

Consolidation and Simplification of Labor Laws

The four labor codes replace 29 older labor statutes, reducing fragmentation. There is a unified framework for registration, licensing, and compliance filings (referred to as “returns”) across many categories. Under the new regime, inspectors act as facilitators, not just enforcers.

The reforms aim to bring a more predictable compliance framework for employers and clearer entitlements for workers, though actual implementation depends heavily on state-level rule notifications.

Wages and Compensation Reform

• Uniform wage definition: A single statutory definition of “wages” now applies across all four codes. “Wages” must form at least 50% of total remuneration, meaning allowances cannot be used excessively to reduce Provident Fund (PF) , bonus, gratuity, and other statutory payouts. As a result, payroll restructuring is inevitable for many employers, as statutory costs may rise due to a larger “wage” component.
• Minimum wages and floor...

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