Labour Codes

Also called New Labour Codes, Code on Wages, and Code on Social Security

India's four labour laws, 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, which came into force on 21 November 2025 and replaced 29 older central labour laws.

Why it matters

They change how a startup structures pay. Wages must be at least 50 percent of total pay, so allowances above half are added back, which raises the base for provident fund and gratuity. Every worker needs an appointment letter, fixed-term staff earn gratuity after one year, and gig and platform workers come under social security. States were still notifying their own rules through 2026, so check your state's before redesigning salaries.

For example

A startup paying a 20 lakh package as 30 percent basic and 70 percent allowances restructures it so that wages make up at least half, and its provident fund and gratuity costs rise accordingly.

Go deeper

Labour Codes Go Live Trilegal · article A law firm's update from the day after the four Labour Codes took effect, listing what changed for employers: the 50 percent wages rule, gratuity for fixed-term staff, gig worker schemes, appointment letters and the payroll steps to take. Open trilegal.com →

Related terms

Fixed-Term Employment Gig and Platform Worker Layoff

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