India’s four Labour Codes replaced 29 central labour laws. They came into force on 21 November 2025, and the central rules followed in May 2026. Here is what changes in practice, as at 20 September 2026.
What has changed
There are four Codes: on Wages (2019), Industrial Relations (2020), Social Security (2020), and Occupational Safety, Health and Working Conditions (2020). State rules are still being notified, and they differ. Where a state has no final rules yet, employers follow the central rules along with existing state law.
For employees
- Wages. Excluded allowances cannot exceed 50 per cent of total pay. The excess counts as wages for provident fund and gratuity.
- Gratuity. Fixed-term employees can receive it after one year of service.
- Appointment letters. They are now mandatory.
- Working hours. Normal hours are eight a day and 48 a week. Overtime is paid at twice the normal rate.
- Retrenchment. A worker with at least one year of service is entitled to one month’s notice and 15 days’ average pay for each completed year (section 70, Industrial Relations Code).
- Large employers. The threshold for standing orders and for prior government permission rises from 100 to 300 workers.
For gig and platform workers
- The Code on Social Security makes aggregators contribute 1 to 2 per cent of annual turnover. That is capped at 5 per cent of what they pay gig workers.
- The Social Security (Central) Rules, 2026 reportedly set eligibility at 90 days of work with one aggregator, or 120 days across several.
- Aggregators were required to onboard workers on the e-Shram portal by 21 June 2026, as reported.
- Some states have their own laws. Rajasthan (2023), Karnataka (2025) and Jharkhand have legislated. The Karnataka High Court reportedly declined to stay the Karnataka Act in July 2026. Telangana’s Assembly passed a bill in March 2026, but we could not confirm the Governor’s assent.
For employers
- Recheck salary structures against the 50 per cent wage rule.
- Issue appointment letters that meet the Codes.
- Review gratuity provisions for fixed-term staff.
- Check state rules for each place you operate in.
What to do now
- Employees: read your salary slip. See whether allowances and basic pay match the new definition of wages.
- Gig workers: register on e-Shram and keep records of the platforms you work for.
Key takeaway
Central rules are now in place, but state rules are still catching up. Check the rules of the state where you work before you rely on any single figure.