The new labour code 2025 was notified by the Central Government on November 21, 2026 but many states haven't notified the rules and other details needed for the labour codes to be effective. Also most companies are yet to update their payroll software and other HR and finance software to fully comply with the new labour code.

Labour and employment minister Mansukh Mandaviya Tuesday said the central government has fully operationalised the four new labour codes which are both pro-worker and business friendly.

Going forward, the ministry plans to come up with a comprehensive employment policy that will serve as a blueprint for employment generation, he added. "Labour and industry should complement each other and adapt to change for effective coordination," he said while addressing the CII summit.

India's new wage framework resets the employer compliance equation by bringing in key provisions of the Code on Social Security, 2020 into force, the Ministry of Labour and Employment has quietly triggered one of the most significant compensation and compliance shifts Indian employers have seen in decades, with effect from 21 November 2025.

The notification of the Social Security (Central) Rules, 2026 on 8 May 2026 also sets the tone for the long-awaited procedural and enforcement framework under the Code.
For years, compensation models across industries in India were designed around fragmented labour legislations. Employers optimised cost structures by keeping "basic wages" relatively low while loading compensation through allowances and flexible pay heads.

When the central government announced the new labour codes on November 21, 2026, a lot of salaried employees cheered because the new law proposed to boost their provident fund, allow early gratuity payment, speed up full and final settlements, provide retrenchment compensation, and introduce various other reforms.

However, six months down the line, many states in India still haven't implemented the new labour codes, leaving many employees without the advantages promised by the new regulations. While some aspects of the new labour code can take effect without the state government approval, the majority cannot.
Though delayed, it is expected that states will notify the new labour codes soon. Legal experts, however, say that even in the absence of full notification by the new labour codes by most state governments, some states like Gujarat and Bihar have amended their labour law significantly even before the central government notified the new labour codes.

With many employees seeing a moderate dip in net take-home salaries in their latest payslips, companies are issuing explainers to help them understand the impact of the new labour codes.
The reduction is largely due to changes in salary composition. Employee provident fund (PF) contributions have increased, as they are now calculated as 12% of a higher basic salary component. At the same time, gratuity accruals have also risen because they are linked to this expanded wage base.
Vikram Shroff, partner, employment, labour and benefits at law firm AZB & Partners, said the labour codes mandate that at least 50% of total remuneration is treated as wages for statutory payments, regardless of the CTC (cost to company) breakup.

The Employees’ Provident Fund Organisation (EPFO) is all set to launch E-PRAAPTI, a dedicated digital platform to help members identify, track, link and activate their old or inoperative EPF accounts, Labour and Employment Minister Mansukh Mandaviya said on Wednesday.

E-PRAAPTI, or EPF Aadhaar-Based Access Portal for Tracking Inoperative Accounts will provide a streamlined Aadhaar-based authentication mechanism. This will enable members to securely access old EPF accounts that are not yet linked to their Universal Account Number (UAN), update their member profiles, and complete the UAN linking and activation process seamlessly, the Labour ministry said.

Micro, small and medium enterprises (MSMEs) have raised concerns over the labour ministry’s latest clarifications on labour codes, saying they create ambiguity in wage calculation and implementation.

The India SME Forum said in a representation to the ministry that the March 16 FAQs have led to interpretational and operational challenges for employers and need reconsideration.

Wage Calculation Ambiguity
The FAQs state that employer contributions such as provident fund (PF), pension and statutory bonus should be included in the 50 per cent wage threshold, with any excess added back to wages.

The labour and employment ministry is firming up an inspection scheme to identify establishments that are eligible for coverage under the Employees' Provident Fund Organisation (EPFO) but devise ways to remain outside the ambit of the social security coverage to avoid compliance and financial burden, depriving thousands of workers of social security benefits.

A rather unique phenomenon in Indian workplaces is the boss asking the employee to finish the pending task by working beyond the usual office hours.
While some lucky employees might never encounter this kind of situation, things can shift quickly depending on certain factors.

For those who find themselves in this situation (working past the mandated hours), these requests usually come verbally instead of through official channels. Some might say the employee can just say no to the boss and head home, but that's easier said than done, especially if the employee has a family to support, home loan EMIs, school fees, and other non-negotiable expenses.

India’s minimum wage laws are inadvertently harming the most vulnerable workers they were meant to protect, according to a report released by the Foundation for Economic Development (FED) on Thursday. The report, titled “Minimum Wages Hurt the Most Vulnerable Workers,” stated that the country’s wage floor has been set excessively high relative to actual worker productivity and earnings, effectively pricing millions out of formal employment opportunities.

Drawing on data from the Periodic Labour Force Survey 2023–24, the report highlights that in 14 of India’s largest states, between 40% and 79% of workers earn below the legal minimum wage and nationally, it is 64% of all workers. For nearly half of all Indian workers (47%), even a 30% increase over their current earnings would still fall short of the mandated floor, making their employment illegal under existing rules.

India’s minimum wage stands at approximately 1.7 times the median earnings of casual workers, the segment most in need of formal jobs, the report stated.

A company had deducted Rs 15.14 lakh from employees' salaries for their provident fund for the period March 2012 to March 2013 and from May 2013 to July 2013, but didn't deposit this money with the Employee Provident Fund Organisation (EFPO). Now, this company is insolvent.

Seeing this gross misconduct, the Employee Provident Fund inspector on July 3, 2014, filed an F.I.R bearing P.S. Case No. 155/14 against the company's director. During the course of the police investigation, the director deposited the pending dues of the employees' PFs and thus cleared all statutory EPF dues.
However, the Orissa High Court ruled that subsequent payment of employees' provident fund dues cannot not eliminate criminal liability for prior default, and such delayed PF payment cannot be a ground to quash criminal proceedings against the director of the defaulting company which is now insolvent.

The labour and employment ministry is revisiting a long-pending proposal to raise the wage ceiling for provident fund coverage, after recent pay increases risk pushing a large pool of workers out of the social security net.

The wage ceiling could be raised to as much as Rs 25,000 and Rs 30,000 per month from Rs 15,000 currently, under the Employees' Provident Fund Organisation (EPFO).

The rethink follows sharp wage increases for industrial workers in the National Capital Region. This could result in exclusion of many skilled employees from mandatory EPFO coverage, undermining the government's push towards universal social security.

The Employees’ Provident Fund Organisation (EPFO) has expanded its de-linking facility to cover cases where wrong Member IDs (MIDs) were created without the knowledge of members and where contributions have already been deposited into such erroneous accounts.

The move follows an earlier circular dated January 17, 2025, which established a user manual empowering users to delink any incorrect Member ID in their UAN that had been linked without their consent. The same functionality has now been expanded to include those cases where the wrong MIDs were created without the members’ knowledge and contribution is also available in such MIDs.

How the Process Works
The de-linking process begins at the member’s end. A member can raise a de-linking request directly through the Member Portal, following which the request is forwarded to the employer’s login for acceptance or rejection.

The new labour laws, implemented on November 21 last year, have significantly overhauled the country’s framework governing employment, workplace policies, and wages. The implementation of new labour codes has also brought important changes to gratuity rules, impacting both employees and employers. One of the most significant updates is how “wages” are defined, which directly affects how gratuity is calculated and could lead to higher payouts.

There was initial confusion about whether these rules would apply retrospectively. However, the government has clarified that the revised gratuity provisions will be applicable from November 21, 2025 — the date when the Code comes into force, according to the Labour Ministry’s FAQs.

Starting April 1, companies will be required to provide appointment letters to all workers under the new Labour Codes. Employers who fail to comply will face penalties. The government has mandated that every employer must issue an appointment letter to every employee. If an employee does not have one by the time the Code takes effect, it must be issued within three months.

The Labour Codes make appointment letters mandatory for all workers. Previously, written terms existed in parts of the law but were not uniformly enforced or standardised across the labour market. According to the Occupational Safety, Health and Working Conditions Code, 2020, the responsibility to issue appointment letters lies with employers.

New Labour Codes 2025: Confusion over how gratuity will be calculated under the new labour codes has finally been addressed, with the government making it clear that the revised rules will apply from November 21, 2025.

The clarification comes as part of a fresh set of FAQs released by the Labour Ministry, aimed at resolving lingering doubts around implementation timelines, wage definition, and social security provisions.

Gratuity calculation from April 1
One of the biggest concerns among employees and employers was whether gratuity calculations would be revised for past service periods. The answer is no. A section of employees was also confused about whether the revised gratuity calculation would be implemented from April 1 — here too, the answer is no.

Since the new labour codes came into force on November 21, 2025, people have been asking how different salary components like overtime allowance, gratuity, bonuses, and retirement benefits fit into the revised wage definition. In particular, employees are keen to understand whether overtime payments count toward the 50% wage floor and what exactly is meant by "total remuneration" under the new rules.

The government has consolidated 29 labour laws into four comprehensive Labour Codes. The four Labour Codes include 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.
Here are important FAQs on Code on Wages, 2019, Industrial Relations Code 2020, Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 (OSH&WC)

The government is not currently planning any specific changes to the Employees’ Provident Fund Organisation (EPFO) scheme as part of the new labour codes, according to the Labour Ministry’s response in the Rajya Sabha.

In a written reply to a question raised by Rajya Sabha MP Sandosh Kumar P, Minister of State for Labour and Employment Shobha Karandlaje clarified the government’s position on possible changes to EPFO provisions and the interest rate on provident fund deposits.

The response also sheds light on how the upcoming labour reforms under the Code on Social Security, 2020 will treat existing EPFO schemes once the new framework is implemented.

Chief Minister Yogi Adityanath on Monday stressed the urgent need to replace the colonial-era Societies Registration Act with a modern and practical legislation in Uttar Pradesh for clarity on crucial issues such as property protection and speedy resolution of disputes.

He insisted that whether it is a trust or a society, a strong mechanism must be in place to prevent the arbitrary sale of institutional properties for vested interests.

Chairing a meeting attended by the state's Finance Minister Suresh Khanna, the chief minister said a new legislation will introduce contemporary provisions to strengthen registration, renewal, property management, and financial transparency.

The government has listed the Securities Markets Code Bill 2025 for the Winter session of Parliament starting December 1, according to a bulletin issued by the Lok Sabha Secretariat.

The unified securities markets code will help boost the ease of doing business in the country's financial markets.

The Bill seeks to merge the provisions of the Securities and Exchange Board of India Act, 1992, the Depositories Act, 1996 and the Securities Contracts (Regulation) Act, 1956 into a unified code.