New Labour Law 2025: Big Changes in Salary, PF, Working Hours & Job Rules — Full Breakdown for Employees
India’s labour system is entering its biggest reform era with the rollout of the New Labour Law 2025. The government has merged dozens of earlier labour rules into four unified labour codes, aiming to create a modern, simplified and transparent framework for both employees and employers.
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These updated labour codes will influence almost every aspect of a worker’s professional life — including basic salary structure, in-hand pay, overtime hours, PF contribution, social security coverage, hiring rules, and workplace safety standards.
This detailed guide explains the New Labour Law 2025, its components, and how it will impact salaried employees, private-sector workers, contract staff, and organisations.
What Is New Labour Law 2025? – Simple Explanation
The New Labour Law 2025 is a comprehensive reform that reorganises 29 old labour laws into four structured labour codes, making compliance simpler and employee rights stronger.
The four major codes are:
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Wage Code 2019
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Industrial Relations Code 2020
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Social Security Code 2020
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Occupational Safety, Health & Working Conditions Code 2020
Together, these codes change how salaries are designed, how companies hire and manage employees, and how workers get PF, ESIC, gratuity, and other benefits.
4 Labour Codes Under New Labour Law 2025
1. Code on Wages (Wage Code 2019)
This code defines rules related to:
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Minimum wages
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Overtime payment
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Bonus
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Equal pay for equal work
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Standardised definition of “wages”
Impact:
Basic salary will increase, which automatically increases PF, gratuity and social security benefits, while reducing in-hand salary for many.
2. Industrial Relations Code 2020
This code deals with:
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Hiring and firing rules
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Trade unions
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Dispute settlement
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Worker-employer negotiation systems
Impact:
Companies get a clearer structure for managing staff, while employees get stronger protection during layoffs or disciplinary actions.
3. Social Security Code 2020
This code covers:
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PF, ESIC, gratuity
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Maternity benefits
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Gig worker social security
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Unorganised worker schemes
Impact:
More workers—including gig workers, platform workers, and unorganised sector employees—will be covered under social security benefits.
4. Occupational Safety, Health & Working Conditions Code 2020
This code sets rules for:
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Safe working environment
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Working hour limits
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Leave rules
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Welfare provisions
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Health & safety standards
Impact:
Mandatory safety measures and better workplace conditions across sectors, especially manufacturing, construction, factory-based work.
Key Changes Under New Labour Law 2025
✔ New Salary Structure (Basic = 50% of CTC)
Companies must keep basic salary at least 50% of total salary.
This changes everything:
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Higher PF contribution
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Higher gratuity payout
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Lower in-hand salary for most employees
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More take-home reduction for high CTC jobs
✔ 48 Working Hours Rule
Total weekly hours fixed at 48 hours, but companies can choose:
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4 days work week (longer daily hours)
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5 days work week
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6 days work week
Overtime becomes mandatory beyond daily limits.
✔ Increase in Overtime Compensation
Employees must be paid double wages for overtime work.
✔ PF, ESIC, Gratuity Benefits Expand
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PF eligibility becomes wider
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More employees become ESIC-eligible
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Gratuity becomes available for fixed-term employees too
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Gig and platform workers included in Social Security schemes
✔ Stricter Rules for Layoffs & Hiring
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Industries must follow clear hiring and retrenchment rules
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Standing orders mandatory for larger establishments
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Improved worker grievance system
How New Labour Law 2025 Impacts Employees
1. In-hand salary may decrease
Because basic salary becomes 50%, PF contribution will increase → take-home reduces.
2. Job security improves
Clear rules for layoffs and dispute redressal.
3. Overtime benefits increase
More transparency + higher payout.
4. Better workplace safety
Mandatory safety standards across all workplaces.
5. Gig & contract workers get coverage
Food delivery agents, cab drivers, freelancers, etc., become eligible for social security schemes.
How New Labour Law 2025 Impacts Employers
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Higher compliance requirements
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Need to restructure salary templates
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Mandatory records & transparency
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Improved employer–employee relations
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More predictable industrial relations
New Labour Law 2025 – Who Should Pay Attention?
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Private sector employees
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Government & PSU workers
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Contractual & temporary employees
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Startup employers
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HR professionals
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Gig workers (Zomato/Swiggy/OLA/Uber etc.)
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Factory and manufacturing workers
Everyone’s salary structure and benefits will be influenced.
NaukriBee Insight
The New Labour Law 2025 marks a historic shift in India’s labour landscape. While employees may experience lower take-home salaries, they gain long-term financial protection through higher PF, gratuity, social security and safety standards.
For employers, this reform ensures a more organised, transparent and predictable labour system.
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