India’s New Labour Codes 2025 enhance social security coverage, worker protections, simplified compliance for corporates
Social security coverage is projected to exceed 64% of the total workforce in 2025, a rise from only 19% in 2015
December 04, 2025: According to ‘Decoding India’s New Labour Codes 2025,’ a new report on the India’s recently revised labour code by Brickwork Ratings, the reforms usher in a modern era for the Indian workforce.
The four unified Labour Codes, effective November 21, 2025, consolidate 29 prior acts into streamlined frameworks on wages, industrial relations, social security, and occupational safety. The Code on Wages, 2019 introduces universal minimum and floor wages, mandates gender-equal pay, and overtime at 2x rate. The Industrial Relations Code, 2020 raises retrenchment/layoff threshold to 300 workers, up from 100, recognizes fixed-term employment, re-skilling fund, work-from-home, and 60-day strike notice. The Code on Social Security, 2020 extends EPFO/ESI/gratuity to gig/platform workers. Further benefits of the code include fixed-term gratuity after 1 year, and unorganized sector coverage. Finally, the OSHWC Code, 2020—short for ‘Occupational Safety, Health & Working Conditions—standardizes safety for women/migrants, mandates health check-ups for workers over 40, and single PAN-India registration for employees at the time of employment.
“These reforms balance worker welfare with investment-friendly policies, positioning India for inclusive growth,” says K.H. Patnaik, Chief Ratings Officer, Brickwork Ratings.
The report highlights the sector-wise impacts of the labour code revisions and key changes from the previous regime. The sectors compared in the report include:
Key business impacts
As per the report, the reform
s have simplified digital filings, reduced administrative burden, and improved flexibility for enterprises to adjust their workforce. Although gig platforms face new welfare costs, the segment finally gains the formal worker status. For businesses, the higher thresholds for workforce downsizing approvals and simplified compliance mechanisms reduce regulatory burden, fosters a more investment-friendly environment.
As per the data from the Government of India, national social security coverage is projected to exceed 64% of the total workforce in 2025, a rise from only 19% in 2015. The revisions in the labour code are expected to improve these figures further.
About Brickwork Ratings
Brickwork Ratings (BWR) is India’s home-grown credit rating agency built with the superior analytical prowess of the industry’s most experienced credit analysts, bankers and regulators. Established in 2007, BWR aims to provide reliable credit ratings by creating new standards for assessing risk and by offering accurate and transparent ratings. BWR provides investors and lenders timely and in-depth research across the structured finance, public finance, financial institutions, project finance and corporate sectors. Our experienced analysts have published over 13,370 ratings across asset classes. BWR is committed to providing the investment community with products and services needed to make informed investment decisions. BWR is a registered credit rating agency by Securities and Exchange Board of India (SEBI) and a recognised External Credit Assessment Institution (ECAI) by the Reserve Bank of India (RBI) to carry out credit ratings in India. BWR is promoted by Canara Bank, India’s leading public sector bank. More information on Canara Bank is available for reference at www.canarabank.com BWR Rating Criteria are available at https://www.brickworkratings.
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