India’s Landmark Labor Reforms Take Effect: Free Health Checks, Gig Worker Protections, and 1-Year Gratuity Rule

On November 21, 2025, India’s 470 million-strong workforce woke up to the most sweeping labor overhaul since independence — four new Labour Codes replacing 29 outdated laws overnight. The change isn’t just bureaucratic cleanup. It’s a seismic shift in how workers are treated — from the factory floor in Surat to the app-based delivery rider in Bengaluru. For the first time, gig workers get social security. Fixed-term employees now qualify for gratuity after just one year. And if you’re over 40, your employer must pay for your annual health checkup — no exceptions.

What’s Actually New? The Four Codes, Explained

The four consolidated codes — 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 — don’t just merge laws. They rewrite expectations. The Code on Wages, 2019 now enshrines a national floor wage, meaning no worker, anywhere in India, can be paid less than this baseline. Wages must be paid within seven days of the month’s end — or two days if you’re fired or quit. That’s not a suggestion. It’s the law.

Free Health Checkups — A Game Changer for Older Workers

Here’s the twist: employers must now provide free annual health screenings to every employee aged 40 and above. That includes textile mills in Coimbatore, construction sites in Delhi, and even export-oriented garment units in Tiruppur. It’s not about wellness programs. It’s about preventing long-term disability. For workers who’ve spent decades breathing dust or lifting heavy loads, this could mean catching diabetes, hypertension, or lung disease early — and staying alive longer.

Gig Workers Are Now Covered — Finally

For years, platform workers — food delivery riders, cab drivers, freelance coders — were invisible to labor law. Not anymore. Under the Code on Social Security, 2020, aggregators like Swiggy and Ola must contribute a percentage of their annual turnover to a state-managed fund. This fund covers life insurance, disability benefits, maternity support, and even health insurance. About 7.7 million gig workers now have legal standing. It’s not perfect — the contribution rate is still being finalized — but it’s a start. For the first time, these workers aren’t just “independent contractors.” They’re part of the social safety net.

Gratuity, Reduced to One Year — A Win for Contract Workers

The old rule? Five years of continuous service to get gratuity. That locked out millions of temporary, seasonal, or fixed-term workers. Now? One year. That’s it. A worker hired on a 12-month contract in an export factory in Chennai walks away with a lump sum payment equal to 15 days’ salary for every year worked. No more being let go after 4 years, 11 months. This isn’t just financial security — it’s dignity. It says: your work matters, even if it’s temporary.

Women’s Rights, Night Shifts, and Equal Pay — Enforced

Women can now legally work in any sector — including mining, manufacturing, and night shifts — as long as they consent and employers meet strict safety standards. Think: well-lit transport, secure workplaces, and emergency response systems. And yes — equal pay for equal work is now legally enforceable, not just aspirational. For the first time, women must have mandatory representation on workplace grievance committees. And the definition of “family” for social security purposes now includes parents-in-law. That’s huge for married women whose in-laws rely on their income.

The Catch: 50% Basic Salary Rule

Here’s the trade-off. Employers must now ensure that basic salary makes up at least 50% of the total Cost to Company (CTC). That means if you’re earning ₹60,000/month as CTC, ₹30,000 must be your basic salary. The rest — HRA, allowances — gets capped. Why? Because PF, gratuity, and other benefits are calculated on basic salary. So while your take-home pay might dip slightly, your retirement savings will climb. A ₹5,000 increase in PF contribution per month adds up to ₹60,000 a year. That’s a pension boost, not a pay cut.

One Registration. One License. One Return.

Employers won’t need 15 different registrations anymore. A single online portal now handles everything: labor registration, EPF enrollment, ESIC coverage, and compliance filings. It’s called the “Shram Suvidha Portal,” and it went live on November 21. Small businesses, especially in Odisha and Madhya Pradesh, were terrified of red tape. Now, they can register in under 48 hours.

What’s Still Unclear?

The details are still being ironed out. How exactly will aggregators calculate their contribution? Will the 48-hour weekly cap be flexible for seasonal industries? What happens to workers in unregistered factories? The government says enforcement will be tech-driven — with AI-powered audits and whistleblower protections. But in rural areas, where labor inspectors are scarce, implementation could lag.

What’s Next?

By mid-2026, the Ministry of Labour and Employment plans to launch a nationwide awareness campaign — in 12 languages — targeting both employers and workers. Training modules are already being rolled out to trade unions and employer associations. Meanwhile, court challenges are expected. Some industry groups argue the 50% basic salary rule will hurt hiring. But labor advocates say this is the moment India finally treats work as a right, not a privilege.