Good News For Full Time Employees, Gratuity Eligibility Reduced From Four To Just A Year

India has moved a step closer to modernising its labour framework, with the Ministry of Labour & Employment announcing the rollout of the four consolidated labour codes — on Wages, Industrial Relations, Social Security, and Occupational Safety & Working Conditions — effective November 21, 2025. The reform replaces 29 central labour laws, marking one of the most extensive legislative updates in decades.

The new Codes aim to simplify compliance, widen social-security coverage and introduce consistent protections for workers across sectors. Under the Code on Wages, every worker — regardless of industry — is now legally entitled to a minimum wage. Employers must issue written appointment letters, ensuring greater clarity on work terms.

A significant feature of the Social Security Code is the inclusion of gig and platform workers, a first for India. Aggregators will contribute a portion of their turnover towards social-security funds, while workers will be assigned a portable Aadhaar-linked Universal Account Number, allowing benefits to follow them across states and jobs. Fixed-term employees, too, receive substantial upgrades, including parity with permanent staff and gratuity eligibility after one year instead of five.

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Women workers gain expanded rights under the new rules, including the option to work night shifts with safety guarantees. Establishments must also include women representatives in grievance-redressal mechanisms.

The Codes are expected to reduce regulatory friction through single-registration and single-return systems, replacing the earlier maze of filings. The traditional “inspector” model will be replaced with an “inspector-cum-facilitator” approach focused on guidance and compliance rather than punitive oversight.

Sector-specific changes also feature prominently. Plantation and mining workers will receive annual health check-ups and mandatory safety training. Audio-visual and digital-media workers, previously operating in loosely regulated environments, will now be entitled to appointment letters, overtime norms and social-security benefits. For migrant and informal-sector workers, the government promises better portability of entitlements, including access to PDS benefits.

The Labour Ministry has described the reform as overdue for a workforce increasingly shaped by gig work, tech-driven employment and interstate mobility. While the Codes formally come into effect this month, the real test will lie in the timely notification