Archive · 25 Nov 2025
India Implements New Labour Codes
India has introduced new labour codes that will change how gig workers and other employees are treated.
These codes, which started on 21 November 2025, make sure that companies like food delivery and quick commerce platforms contribute to social security for their workers.
This means these companies will have to pay a small percentage of their earnings towards benefits like health insurance and pensions for their workers.
The new rules also change how wages are defined and when overtime pay and leave encashment apply.
While some companies think this might not affect them much in the long run, others believe it could lead to higher costs that might be passed on to customers or workers.
The goal of these new rules is to make work more formal and to protect workers' rights better.
Additionally, the basic salary component must now be at least 50% of an employee’s total cost-to-company (CTC), which will increase provident fund (PF) and gratuity contributions, potentially reducing take-home pay but increasing long-term retirement savings.
The gratuity eligibility period has also been reduced from 5 years to 1 year for fixed-term employees, providing them with stronger financial stability.
New labour codes implemented in India on 21 November 2025, impacting gig platforms and worker benefits.
Gig platforms must contribute 1-2% of annual turnover towards social security for workers, capped at 5% of gig-worker payouts.
Estimated cost impact for food delivery and quick commerce platforms is Rs1.5-Rs2.5 per order.
New definitions for 'employee' and 'worker' with implications for overtime, leave encashment, and dispute resolution.
Basic wage must now form at least half of total salary, affecting statutory payments like PF and gratuity.
- Who
- Gig platforms, food delivery and quick commerce companies, and workers
- What
- Implementation of new labour codes impacting gig economy and worker benefits
- When
- Effective from 21 November 2025
- Where
- India
- Why
- To formalize gig work, platform work, and aggregators, and to improve social security and workplace governance
- Implementation Date
- 21 November 2025
- Social Security Contribution
- 1-2% of annual turnover, capped at 5% of gig-worker payouts
- Estimated Cost Impact
- Rs1.5-Rs2.5 per order for food delivery and quick commerce platforms
- Gratuity Eligibility
- Fixed-term employees completing one year of service
- Overtime Payments
- Applicable for more than 8 hours a day or 48 hours a week
- Leave Encashment
- Applicable at the end of each calendar year
- Worker Category Exclusion
- Supervisory staff earning more than Rs 18,000 per month
- Wages Definition
- Basic wage must form at least half of total salary
Sources
New Labour Codes To Reshape Employee Benefits, Hiring Models And Compliance Framework: EY Report
Share Market Today Live Updates 24 November 2025: Sensex, Nifty edge up in early trade; IT stocks lead rally
New Labour Codes to reshape Employee benefits, Hiring models and Compliance framework: EY Report
Can Indians Legally Work 72 Hours a Week? Here’s What the Law Says
Brokerages see limited margin impact on Zomato, Swiggy from new labour-code costs
New Labour Codes to reshape Employee benefits, Hiring models and Compliance framework: EY Report
50% wage rule in Labour Codes explained: Smaller in-hand salary, bigger PF and gratuity — Here’s what’s changing
Why Your Next Paycheck May Drop: The Wage Code’s 50% Basic Rule Explained
New Labour Codes: Key Details On Gratuity Payment As Eligibility Reduced To 1 Year
Employees, employers both set to gain from the four labour codes: Teamlease Senior VP Balasubramanian Anantha Narayanan explains
New labour codes mark a turning point for worker welfare: Mansukh Mandaviya
