How India’s 4 New Labour Codes Affect Your Salary, PF, and Leaves Today

The Breaking Change: 29 Laws Become 4

“In a historic move, the Central Government has brought into effect the four comprehensive Labour Codes, consolidating 29 complex laws into a simplified framework as of November 21, 2025.

This reform aims to give workers better security and employers simpler compliance. Whether you are an IT employee in Bangalore or a gig worker, these new rules affect your paycheck and work life starting today.”

The Salary & PF Overhaul

The Key Rule: Under the new system, your Basic Salary must be at least 50% of your total monthly remuneration (CTC).

Impact on You:

• Take-Home Salary: May decrease. Employers previously inflated allowances to reduce the basic salary. Now, since the basic pay is higher, deductions for PF and Gratuity will be calculated on a larger base.
• Retirement Savings (PF/Gratuity): Will increase significantly. You lose a small amount today but gain much larger savings upon retirement.
• Gratuity: Gratuity is now eligible after one year of continuous service for fixed-term employees (down from the old five-year rule).

The 4-Day Work Week & Working Hours

“The new Code on OSHWC (Occupational Safety, Health and Working Conditions) permits companies to adopt a 4-Day Work Week.

• The Catch: You must still complete the 48-hour weekly cap. This means employees choosing the 4-day model will work 12 hours per day (including breaks).
• Overtime: Working beyond the daily or weekly limit requires mandatory overtime payment at twice the normal wage rate.
• Consent: This system is not mandatory; companies can adopt it only with the employee’s written consent.”

Benefits for Gig & Platform Workers

“The Code on Social Security, 2020, formally recognizes Gig Workers and Platform Workers for the first time.

• Welfare Fund: Aggregators (like Swiggy, Zomato, Ola, Uber) must now contribute 1–2% of their annual turnover (capped at 5% of worker payouts) towards a dedicated welfare fund for these workers.
• Portable Benefits: Gig workers will eventually receive Aadhaar-linked social security benefits, ensuring they have a safety net.”

Women Workers & Leave Encashment

• Night Shifts: Women are now legally permitted to work night shifts in all sectors (including mining and hazardous sites), provided the employer mandates specific safety measures, facilities, and transportation.
• Annual Leave: Eligibility for paid annual leave has been reduced from 240 working days to 180 working days.
• Final Settlement: Employers must pay the full and final settlement (FnF) to employees within 2 days of their last working day.

Conclusion

“The implementation of the four codes is a massive step towards formalizing employment in India. While there will be initial friction as companies recalculate salaries and compliance, the long-term benefits—especially higher retirement funds and social security for unorganized workers—are undeniable. Check your next salary slip carefully!”