The Centre on Friday implemented four new labour codes, marking the most significant reform of India’s labour laws in decades. The government says the overhaul aims to simplify compliance, ensure timely wage payments, and strengthen worker protection across sectors.
The IT and IT-enabled services (ITES) industry — one of India’s largest employment generators — will see major changes under the new framework. A key provision mandates that fixed-term employees must receive the same benefits as permanent staff, including provident fund, ESIC, insurance, gratuity and other social security entitlements.
Harpreet Singh Saluja, President of IT workers’ union NITES, said the move brings long-awaited parity for contract workers. “Rules around working hours and overtime also become more uniform, which is crucial in an industry known for extended workdays and tight project cycles,” he said.
The Ministry of Labour & Employment noted that before these reforms, there was no mandatory requirement for employers to ensure timely wage payments. Under the new rules, companies must pay salaries by the 7th of every month.
The codes further require equal pay for equal work and enhanced provisions to support women’s participation in the workforce. IT firms must now provide safe and supportive conditions for women working night shifts, offering greater income opportunities and financial stability.
The new laws also make it compulsory for employers to issue appointment letters, provide social security benefits to all categories of workers, and ensure swift resolution of harassment, discrimination and wage-related grievances.
Saluja warned that companies may attempt to bypass obligations through misuse of fixed-term contracts or by classifying employees as “consultants”. He said NITES will monitor implementation closely.
Nasscom, the IT industry body, said the new codes can bring greater transparency and predictability once fully operational. It emphasised the need to harmonise central rules with state-level regulations to avoid overlapping compliance requirements.
By replacing 29 fragmented labour laws, the four codes aim to modernise India’s labour ecosystem and create a more transparent and equitable workplace. The government says the reforms will help build a future-ready workforce, particularly benefiting contract workers in the IT and ITES industries.