The Four New Labour Codes: What Changes for Employers and Workers (2026)

Explainer · Labour Law · India

Updated for 2026 · Claw Editorial

India has reorganised its labour law into four codes. They replace 29 central labour laws with one set of rules on pay, industrial relations, social security, and workplace safety. The four codes were brought into force on 21 November 2025, with the detailed rules and some provisions rolling out in stages, and state rules arriving at different times. This overview explains what each code does, when it took effect, and the main practical changes for employers and workers, with links to the detailed pages on each. Last verified October 2026.

01Why four codes

For decades India had dozens of separate central labour laws, written over a century, each with its own definitions, thresholds and authorities. The same worker could be covered by one law and left out of another, and employers faced many registrations, licences and returns. Reform grouped these laws by subject and rewrote them as four codes.

The aim is a simpler framework: one definition of wages, fewer registrations, higher thresholds for the heaviest compliance, and, for the first time, a route to social security for gig and platform workers.

02The four codes at a glance

Between them, the four codes subsume 29 central labour laws.

03When they came into force

The four labour codes were brought into force on 21 November 2025. This was announced by the central government, and it is the single most important date to remember.

All four labour codes took effect on 21 November 2025, replacing 29 central labour laws with one framework.

Commencement is only the start. Several provisions are being operationalised in phases, the detailed central rules follow their own timeline, and each state notifies its own rules, so the on-the-ground position still varies by state and by subject. Treat the start date as settled and check the current rules for the detail.

04The main changes for employers

Several changes matter most to employers:

• One wage definition. A single meaning of wages flows into provident fund, gratuity and bonus, with excluded allowances capped at 50 percent of total pay. See the Code on Wages.
• Higher thresholds. Standing orders and the need for prior permission to retrench or close now apply at 300 workers, up from 100. The factory threshold rises to 20 workers with power and 40 without. Contract-labour licensing applies at 50, up from 20.
• Single registration. The codes move towards one, often electronic, registration and licence in place of many.
• Appointment letters. A written appointment letter becomes mandatory for every employee.

05The main changes for workers

For workers, the headline gains are:

• Universal minimum wages and a floor wage. Every employee has a right to a minimum wage, with a national floor wage below which no state can go.
• Social security for gig and platform workers. For the first time, a framework of schemes funded in part by aggregator contributions. See the Code on Social Security.
• Gratuity for fixed-term staff. Fixed-term employees earn gratuity pro-rata after one year, without the five-year rule.
• Safer, clearer conditions. Mandatory appointment letters, free annual health check-ups for notified classes, and night work for women with consent and safeguards. See the OSH Code.

06What to watch next

Because the codes commenced but the rules and some provisions are still being rolled out, the practical picture keeps moving. Watch for the central rules that fill in the detail, the state rules that apply locally, and the notifications that set rates such as the floor wage and the aggregator contribution for gig workers.

Court decisions will also matter. As disputes under the new codes reach tribunals and High Courts, they will settle how the new thresholds and definitions are read. The Industrial Relations Code is covered in detail at the Industrial Relations Code.

07Where Claw fits

Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.

Because the labour codes commenced only in November 2025, the case law that will fix their meaning is being written right now in tribunals, labour courts and High Courts. Claw is built for this moment. Its store of more than 30 crore judgments reaches back to Supreme Court rulings from 1950 and High Court rulings from 1990, so you can trace how the old wage, dispute and factory laws were read and watch the first rulings on the new codes arrive, with each search answered in under five seconds. Alongside the research, it keeps a live record of the cases, orders and hearings in your own labour matter across 9,102 courts, benches and forums.

Your filings stay yours: Claw does not feed customer case documents into the training of its AI models. Open a free Claw account to follow a wage, retrenchment or social-security dispute by the name of the employer, worker or advocate, and use case search across Indian courts to read across the wider field.

08Sources and further reading

• Ministry of Labour and Employment: labour.gov.in
• PRS Legislative Research (labour codes): prsindia.org
• India Code (official statute text): indiacode.nic.in
• Claw: clawlaw.in

This explainer is general information, not legal advice. The codes are being rolled out in stages and rules differ by state, so check the current notifications and take advice from counsel before you act.

09Frequently asked questions