WFH, wages, leave & safety: Key labour rule changes employees should know

Work from home recognised in services industry and minimum wages guaranteed to all workers

India last week implemented four new labour codes, marking the biggest overhaul of workers’ laws in decades as the government seeks to simplify rules, improve worker protection and liberalise conditions for investment.

 

The codes replaced 29 separate laws with a unified framework and aim to simplify compliance, bring more workers into the formal system, and ensure predictable workplace standards in factories, services, digital platforms and small businesses.

 

The “long-awaited reform” brings “clarity, consistency and simplification”. However, the older laws may run in parallel for a while and things “may not be seamless,” said Bishen Jeswant, partner at law firm Cyril Amarchand Mangaldas.

 

 

Akhil Chandna, partner at Grant Thornton Bharat, said employers will need to “promptly assess and align” HR policies, wage structures, leave rules and working-hour systems.

 

Here are key changes in wages, employee safety and workplace rights employers should know about, according to a reading of the four codes.

 

Minimum wages

All workers, including gig and unorganised sector workers, are now entitled to minimum wages. 

A new national floor wage will ensure no one earns below a basic threshold.

 

New wage structure

 

Basic pay must be at least 50 per cent of total compensation.

 

This may lower take-home pay for some but boosts long-term benefits like provident fund and gratuity.

 

Timely wage payments

 

Wages must be paid within seven days of the start of a month

 

On an employee’s resignation or termination of service, they will have to be paid their dues within two working days 

 

Working hours, leaves and overtime

 

Flexible working hours 

The weekly limit of 48 hours stays but states can choose formats such as:

 

Four-day week with up to 12 hours a day 

Five-day week with 9.5 hours a day

 

Six-day week with 8 hours/day 

 

Higher overtime protection

 

Overtime is voluntary and must be paid at double wages.

 

States can set their own overtime caps.

 

Earlier paid leave eligibility 

 

Employees become eligible for annual paid leave after 180 days; the earlier rule applied for 240 days.

 

Work-from-home recognised

 

WFH formally allowed for service-sector roles through mutual agreement.

 

Health, safety and workplace conditions

 

Annual health checkups for workers aged 40+

 

Employers must provide a free annual examination, a major preventive health measure.

 

Stronger safety norms

 

A National Occupational Safety and Health Board will set “harmonised” safety standards across industries.

 

Commuting accidents covered

 

Travel between home and workplace is now considered part of employment for compensation purposes.

 

Safety committees in large workplaces

 

Establishments with 500 or more workers must maintain safety committees for monitoring compliance and incident prevention.

 

Social security & benefits

 

Social security for gig & platform workers

 

For the first time, gig workers will receive benefits through aggregator contributions into a dedicated fund.

 

Benefits will be portable and linked to Aadhaar across states.

 

Faster gratuity for fixed-term workers

 

Fixed-term employees become eligible for gratuity after one year, aligning them with permanent staff.

 

Expanded ESIC coverage

 

ESIC coverage is now pan-India and optional for smaller establishments.

 

Hazardous units must comply mandatorily.

 

Rights & equality

 

Mandatory appointment letters

 

Every worker, including those in the informal sector, must receive written terms of employment.

 

Women can work night shifts

 

Women can now work beyond 7 pm and before 6 am with consent and employer-provided safety measures.

 

Gender-based wage discrimination is prohibited.

 

Gender-neutral protections

 

The codes ban discrimination against all genders, including transgender people.

 

Industry -specific changes

 

Textile and migrant workers: Equal wages, double overtime pay, portability of PDS benefits.

 

Plantation workers: access to ESIC medical facilities, safety gear, and education support.

 

Audiovisual & digital media workers: formal appointment letters and double overtime pay.

 

IT & ITES employees: salary by the 7th, social security coverage, and night-shift opportunities for women.

 

Mine workers: annual health check-ups and stronger safety standards.

 

MSME workers: guaranteed minimum wages and timely salaries.

 

Compliance & business impact

 

Chandna notes that companies should immediately review:

 

Compensation structures

 

Working-hour schedules

 

Leave and overtime rules

 

Record-keeping and payroll systems

 

Processes for annual health check-ups

 

Social security coverage for gig and fixed-term workers

 

Businesses will benefit from single registration, pan-India licensing, and a unified return system, reducing compliance burden.

 

However, state-level Shops and Establishments Acts still operate separately, creating overlaps especially around leave and working hours meaning employers will need careful coordination, said Chandna.