In a major overhaul of India’s labor framework, the Government of India has announced four new labor laws — the Wages Act, 2019, the Labor Relations Act, 2020, the Social Security Act, 2020 and the Occupational Safety, Health and Working Conditions Act, 2020. Effective from 22 November 2020, the new Indian labor codes extend a significant shift in protection and modernization of work procedures.
Under the old system, employers were not required to issue appointment letters, but the new codes make written appointment letters mandatory for all workers. Minimum wages previously applied only to scheduled industries, leaving many workers out of coverage; the new Labor Code guarantees the legal right to a minimum.
Reforms before and after work: What has changed?
The new work ecosystem is set to bring about major changes in employment, wages, worker safety and compliance in India. The Union government has termed the new labor codes as a “historic” decision and that the new amendments will rationalize 29 existing labor laws, modernize regulations and improve employee welfare, creating a future-ready workforce and a stronger and more resilient industry under Aatmanirbhar Bharat.
Here is a comparison of the work system before and after the changes:
Why were these new codes added?
Many of India’s labor laws were created between the 1930s and 1950s—the pre-independence and early post-independence eras—when the concept of the digital economy or the gig economy was unknown.
According to the Government of India, it has continued to operate within this fragmented framework with overlapping compliance, outdated processes and limited protections for workers, especially those outside the formal sector, for decades.
“The four labor codes are a step towards replacing this patchwork with a single, modern legal framework that the government says will create a workforce that is ‘protected, productive and in tune with the evolving world of work’, paving the way for a more resilient, competitive and self-sufficient nation,” it said.
‘Shramev Jayate’: PM Modi on India’s new labor laws
Speaking about the implementation of India’s new labor codes, Prime Minister Narendra Modi wrote on X: “Shramev Jayate! Today our government has enacted four labor codes. It is one of the most comprehensive and progressive labor reforms since independence. It greatly empowers our workers. It also greatly simplifies compliance and promotes ‘ease of doing business.’
He further added that these codes will serve as a “firm basis for universal social security, minimum and timely payment of wages, safe workplaces and remuneration options…especially Nari Shakti and Yuva Shakti”.
It will also protect workers’ rights and boost India’s economic growth and boost job creation in the country, X added in the post.
