New Labour Codes: Discussions about the new labor codes on social media have increased anxiety among employees. People want to understand whether job security will no longer be the same and whether companies will be able to lay off employees without consulting the government.
Why the New Labor Codes Are in the News and What They Say
| Feature/Topic | Key Changes | Impact on Employees | Remarks |
|---|---|---|---|
| Layoff Rules | Companies with less than 300 employees can lay off without govt approval | Increased job insecurity, employees must stay performance-focused | Earlier limit was 100 employees |
| Fixed Term Employees (FTA) | Gratuity payment reduced from 5 years to 1 year | Employees receive faster financial benefit, but short-term contracts may feel unstable | Applies to FTA workers only |
| Working Hours | Shift hours can be 8–12 hours, weekly limit 48 hours | Flexibility for employers, risk of mental and physical fatigue for employees | Overtime pay is minimum double |
| Overtime | Payment rate doubled compared to normal wages | Financial benefit for extra work, may increase workload stress | Applies to all eligible employees |
| Labour Codes | Four codes implemented: Wage, Social Security, Industrial Relations, OSHWCC | Structured labour laws, formal protection, but more employer freedom | Aim is improved social security and workplace safety |
| Job Security | Employees face higher risk of sudden layoffs | Employees need skill development and career planning | Awareness and preparedness are key |
| Employee Benefits | Gratuity, social security, and wage reforms | Faster benefits, but employer flexibility increases | Depends on company policy |
The four new labor codes implemented by the central government claim to establish a systematic labor system, but they have raised questions among both employees and companies.
In particular, the provision of paying gratuity to fixed-term employees in just one year instead of five years has attracted considerable attention. Along with this, several changes have been implemented that will directly impact the lives of employees.
The biggest change in retrenchment rules that has sparked controversy
The new Labour Codes ensure minimum wages, appointment letters, annual health check-ups, and stronger protection for all workers.
— Ministry of Information and Broadcasting (@MIB_India) November 22, 2025
Women, youth, MSMEs, and contractual workers now have better rights and safer, fairer workplaces.#श्रमेव_जयते #ShramevJayate pic.twitter.com/p0at7udXtA
Previously, companies with 100 employees could retrench without government permission, but now this limit has been increased to 300. This means that companies with fewer than 300 employees will be free to retrench without government approval. This reform has been implemented under the Industrial Relations Code 2020 and is likely to have a profound impact on job stability.
The four labor codes and their stated purpose
The new labor codes have been implemented in the form of the Wage Code 2019, the Social Security Code 2020, the Industrial Relations Code 2020, and the Occupational Safety, Health and Working Conditions Code 2020.
The government claims that these reforms will provide social security, improved working conditions, and financial growth. However, employees feel that the increased freedom given to companies may increase their risk.
How have working hours and overtime rules changed?
According to the Ministry of Labor, companies can now implement shifts ranging from 8 to 12 hours, but the total weekly working hours will not exceed 48. Wages for overtime have been fixed at at least double the normal wage, which appears to provide economic relief. However, long working hours can also affect the mental and physical health of employees.
Job Security and Impact on Employee Mentality
The inability of companies with up to 300 employees to seek permission for layoffs is understandably contributing to a sense of insecurity among employees.
People fear that companies may reduce staff during times of economic pressure or restructuring. In such times, employees may need to focus even more on skill development, performance, and professional growth to maintain a strong competitive position.
What’s the Way Forward in the Face of a Changing Work Culture?
Understanding and adapting to these new regulations will be crucial for every employee in the future. This is not a time for living in fear, but for better preparation and strengthening their careers.
The global employment landscape is changing, and in these circumstances, being aware and understanding your rights can be a key strength. Time will determine how beneficial these changes prove to be.
FAQ
Q1. Can companies lay off employees without government approval now?
Yes, companies with less than 300 employees can lay off freely.
Q2. How has gratuity for fixed term employees changed?
Gratuity is now payable after one year instead of five.
Q3. What are the new working hours regulations?
Employees can work 8–12 hours daily, weekly maximum forty-eight hours.
Q4. How is overtime pay calculated under new codes?
Overtime pay is at least double the normal wage rate.
Q5. Do these codes increase job insecurity?
Yes, more employer freedom may increase employees’ job insecurity risks.
Disclaimer: This article is for general information purposes only. The content is based on official media reports and public sources. Please consider government guidelines, expert advice, and personal circumstances before making decisions related to employment, labor laws, and careers.
