India Implements Major Overhaul of Labour Laws with New Codes
The Indian government has implemented four new labour codes, marking a significant reform in workers' laws. A key change is the revised definition of 'wages', which now includes basic pay, dearness allowance, and retaining allowance, with at least 50% of total remuneration counted as wages. This adjustment is expected to impact social security contributions, including Provident Fund and gratuity calculations, potentially increasing payouts for employees. Additionally, fixed-term employees will now be eligible for gratuity after one year of service, a reduction from the previous five-year requirement. While these reforms aim to enhance worker protection, they may also raise costs for employers, possibly affecting take-home salaries.
Published 13 days ago • 21 Nov 2025, 07:40 PM IST