New Labour Codes: Impact on Salary, PF, Gratuity & Working hours and week offs
The new Indian Labour Codes, effective November 21, 2025, will significantly alter your salary structure, making basic pay at least 50% of CTC. This impacts PF and gratuity, offering more retirement benefits. Working hours may shift, with a potential 4-day work week and higher overtime. Road accident compensation is expanded. Understand these changes to prepare for your new payslip.
New Delhi: With effect from 21 November 2025, four new Labour Codes of India have been implemented across the country. Now your next salary slip will look different and the office time table may also change. The question is — will you get to see the new payslip and the new roster? It is important to know what went well for you, what can be a bit difficult and what you should do now. These new rules will affect your basic salary, PF, gratuity, working hours and even accidents on the road.
The four Labour Codes include the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020.
Labour Codes: Salary structure
The basic salary will be at least 50 percent. Now it will be half of your total salary (CTC). This will include (basic + DA + retaining allowance). Previously, companies used to keep more allowances. Now, this will not happen. Your benefit from this — PF will be deducted more then more money will be received in retirement. Gratuity will also be higher. If the company does not increase the total salary, then there will be a little less money in the form of in-hand salary.
In IT, manufacturing, media and logistics, most people are on contract. Previously, gratuity was received only after completing 5 years. Now it will be available in just 1 year. This is a huge advantage.
Minimum wage applicable
Now, the law of minimum wage will be implemented not only in some industries, but everywhere. The central government will fix a floor salary. No company/state will be able to pay less salary than that. Those working in retail, construction and small factories will benefit a lot from it.
Labour Codes: Working hours
If the state government wishes, it can introduce the rule of 4 days of work and 3 days week offs. That is, it can be 4 days × 12 hours. Or even 5 days × 9.5 hours. Or 6 days × 8 hours. The law has opened the way. Now it is up to the state and the company. You must have the desire to work overtime. The money will only be doubled. Previously, there was a strict limit of 75 hours per quarter. Now companies can set more limits, which is good for those who want to earn extra.
These two things that few people are noticing, but your pocket and safety will affect it. If an accident happens on the way to work, it will be considered a work accident. Now, with certain conditions, you can get the benefit of compensation and ESI (Employees' State Insurance) even if an accident occurs on the road. Previously, only a few areas had ESI. Now it can be implemented in the whole of India. Coverage will also be available in small units and places of risky work.
What should you do now?
Check your salary slips. If the basic is less than 50%, it will change quickly. Ask HR what will be the impact on PF and gratuity. Ask for an appointment letter. Now it is legally necessary. Keep watching your company's new rules for overtime and weekly schedules. Overall, these new codes will make India's labour laws clean and portable. But the real benefit or disadvantage will depend on how states and companies implement them.