India Explained
ImplementedBJPNarendra Modi, coalition government

Implementation of the four Labour Codes (2025)

From 21 November 2025 the Wages, Industrial Relations, Social Security and OSH Codes replaced 29 central labour laws. Unions oppose several provisions; most State rules were still pending in early 2026.

Labour codes · Idea originated under Narendra Modi (2019)

Facts

  • The Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 were passed and received assent in 2019-2020 and were notified as in effect from 21 November 2025 [1][2]; the government announced implementation by press release the same day [5].
  • Together they replace 29 central labour laws [1][2].
  • The Industrial Relations Code raises the threshold for standing orders and for government permission to retrench or lay off from 100 to 300 workers [3][4].
  • Fixed-term employees become eligible for gratuity after one year of service, pro rata; the Codes bar contract labour in core activities except in specified cases [2][3].
  • The Social Security Code provides statutory social security coverage for gig and platform workers, funded in part by aggregator contributions [3].
  • A uniform definition of wages applies across the Codes; one analysis estimates a 3% to 7% take-home reduction for allowance-heavy pay structures, offset by higher PF and gratuity [3].
  • At notification, most States had only draft rules; by May 2026, Maharashtra, Gujarat, Karnataka, Madhya Pradesh and Delhi had notified rules under all four Codes and no court had stayed any provision [1][3].
  • Ten central trade unions with the Samyukt Kisan Morcha held a nationwide protest on 26 November 2025, and a nationwide strike on 12 February 2026 is reported [3][4].

Why

Reasons given by those who did it

  • The stated objective is to consolidate 29 laws into four codes to ensure consistency in definitions, simplified compliance and ease of doing business [1].
  • The government stated that the Codes expand social security, including for gig and platform workers, and that the right to strike is intact [3].

Criticism of that reasoning

  • Central trade unions stated that the Codes negate the right to strike, make union registration problematic and give employers easier layoff powers; they objected to the 100-to-300 threshold change [4].

Benefits and concerns

Benefits (2)

  • Statutory social security cover for gig and platform workers and fixed-term employees.SS Code provisions for gig and platform workers; gratuity after one year for fixed-term employees [2][3]. PLFS 2023-24 found 53.4% of regular wage and salaried workers were not eligible for any social security benefit, which is the base the Codes apply to [6].
  • Consolidation and common definitions may reduce compliance complexity and litigation.29 laws into four codes with a uniform wage definition [1][2]; EY notes the aim of clarity and consistency, with some ambiguities remaining [2].

Concerns (2)

  • Reduced procedural protection for workers in establishments of 100 to 299 workers.Standing-order and retrenchment-permission threshold raised from 100 to 300; employers still owe notice and compensation [3][4].
  • Implementation is incomplete and effects are not yet measurable.Most States had only draft rules at notification [1]; State rules were still pending in several States by May 2026 [3]. Unions dispute the strike-notice and registration provisions [3][4].

Evidence points

+1.0
points, mean of two scorers (scale −25 to +25)
0 to +2
range between the two scorers' totals
Low confidence
1 criterion where scorers differ
ReachHow many people did the action materially affect?
Mean +1.5A 0B +3Scorers differ
Outcome evidenceDo official or independent data show the intended result (or its opposite), compared with the era baseline and peers?
Mean 0.0A 0B 0
Cost and sustainabilityIs the fiscal cost proportionate, and is the effect durable?
Mean 0.0A 0B 0
Process and rightsWas it made with debate, consultation and legal soundness, and did it respect rights and court rulings?
Mean −1.0A −1B −1
DeliveryWas it implemented as announced, on time and at scale?
Mean +0.5A +1B 0

Positive meanNegative meanScorer AScorer B

Scorer A. Notified only in late 2025 with most state rules pending and unions opposed, so no usable outcome data exist.

Scorer B. Extends social security to gig workers but raises retrenchment thresholds, with unions opposed and most State rules still pending, so effects are unmeasured.

Context used when scoring

Era baseline
In 2023-24, 58.4% of workers were self-employed and only 21.7% earned regular wages (PLFS); most workers sat outside the coverage of the older labour laws.
Lag before outcomes show
4 years
Shocks considered
2020-covid
Uncertainty
Low confidence. Scorer totals are 0 and +2. How uncertainty is shown.

In depth

The four Codes were passed in 2019-2020 under the second Modi government and brought into force in November 2025. They merge 29 central laws into codes on wages, industrial relations, social security and workplace safety. Labour is on the Concurrent List, so State rules are required for full operation, and by early 2026 these were incomplete in several States.

The government states that the Codes simplify compliance and extend coverage. Employer groups and advisers generally welcome consolidation, while the central trade unions object to provisions on retrenchment thresholds, strike notice and union registration. Because the Codes are recent, outcome data on employment, wages and coverage are not yet available, and the confidence rating is low.

The PLFS figures cited describe the base the Codes apply to. Several source details here come from law-firm and explainer pages; the Gazette notifications and the PIB release were not opened directly.

Sources

  5. Government announces implementation of Four Labour Codes with effect from 21st November 2025
    Council for Leather Exports (reproducing the PIB release)Media
  6. Periodic Labour Force Survey (PLFS) Annual Report: July 2023-June 2024
    MoSPI report (hosted by People's Archive of Rural India)Official data

Last reviewed .Report an error orchallenge a score.

Related actions

  • ImplementedINCLabour & Employment

    Unorganised Workers' Social Security Act, 2008

    The 2008 Act set up a National Social Security Board to recommend welfare schemes for unorganised workers. Enforcement and beneficiary tracking were limited; later registration relied on the e-Shram portal.

    Evidence points −1.5 (range −2.0 to −1.0)