New labour codes implemented across the country effective 21 November 2025

21 Nov 2025
Subject Tax Alerts
Categories Regulatory
Jurisdictions Tax Alerts

We are pleased to share our latest EY PAS Alert on the implementation of labour codes.

The Government of India has made effective all the following 4 Labour Codes starting 21 November 2025:

  • The Code on Wages, 2019
  • The Code on Social Security, 2020
  • The Occupational Safety, Health and Working Conditions Code, 2020
  • Industrial Relations Code, 2020

These codes will replace 29 existing central labour laws. While the Codes are now in force nationwide, supporting rules under both central and state jurisdictions are still to be notified. Employers should start preparing for compliance with the new labour codes, as the new regime introduces new definitions, expanded social security coverage, revised employment norms and many other changes that will impact all employers.

Key implications for employers:

  • Review job descriptions and workforce classifications to align with new definitions of ‘employee’ and ‘worker’.
  • Reassess hiring models and employment contracts, including fixed-term arrangements and restrictions on contract labour for core activities.
  • Analyze the impact on compensation structures and payroll systems to comply with the uniform definition of wages and benefit calculations.
  • Assess the financial impact of enhanced employee benefits on the organization.
  • Update HR and employee relations policies, including working hours, leave entitlement, and retrenchment processes.
  • Implement strong internal controls, conduct periodic diagnostic reviews, and ensure effective governance.

Next steps:

Employers should undertake a review across HR, Finance, Payroll, and Legal functions. Employers may also consider impact modelling to assess financial and policy-related implications and ensure readiness under the new labour law framework.

For further details, please contact:

Sonu Iyer
People Advisory Services
Partner & Leader - India Region
Email: Sonu.Iyer@in.ey.com

Puneet Gupta
People Advisory Services
Partner
Email: Puneet1.Gupta@in.ey.com

Download the alert PDF

PDF (166 KB)

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