India Labour Code 2025: Complete Guide to Salary, Overtime and Employee Rights
The Government of India has implemented the four new Labour Codes, replacing 29 old labour laws. These new rules change salary structure, working hours, social security, and employment conditions for workers across the country.
What the Four Labour Codes Include
1. Code on Wages
2. Industrial Relations Code
3. Social Security Code
4. Occupational Safety and Working Conditions Code
These codes combine old laws into one simplified system.
Salary and In-Hand Pay Changes
The new Labour Code sets a rule that basic salary must be at least 50% of the total salary. Because of this, PF deduction may increase and in-hand salary may become slightly lower. But long-term benefits like PF, pension, and gratuity will increase.
Gratuity Rules
Earlier, an employee needed five years of service for gratuity. Under the new codes, some workers—especially fixed-term employees—can get gratuity after just one year.
Working Hours and Overtime
Daily working hours can be from 8 to 12 hours, but weekly work must not cross 48 hours. Overtime will be paid at double the normal rate. Women are allowed to work night shifts if safety conditions are met.
Social Security Benefits
Gig workers, platform workers, and many unorganized workers are now included in social security schemes. Appointment letters are mandatory. Eligible workers may get free annual health checkups.
Workplace and Safety Rules
The new code focuses on cleaner, safer working environments and makes it compulsory for employers to provide basic safety equipment and facilities.
Compliance for Employers
All companies now have a simpler system: a single license, single return filing, and fewer forms. Penalties for violations are stricter.
What It Means for Employees
Basic salary will rise, PF will rise, and long-term benefits like gratuity and pension will improve. In-hand salary may reduce slightly due to higher PF contribution. Workers will have clearer job terms and better safety protection.
What This Means for Workers
The Labour Code 2025 is a major change for India’s workforce. It increases transparency in salary, strengthens social security, and makes workplaces safer. Although some workers worry about longer work hours, overall the reforms aim to provide better protection and long-term financial stability