Impact of India's New Labour Codes on Workers

Santosh Mehrotra () and Kingshuk Sarkar ()
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Santosh Mehrotra: University of Bath
Kingshuk Sarkar: affiliation not available

No 218, IZA Policy Papers from Institute of Labor Economics (IZA)

Abstract: India introduced sweeping legal changes on labour laws in late 2025, summarising 29 laws into 4 labour Codes. The Key Changes and Concerns Industrial Relations Raises the threshold for requiring government permission for layoffs/retrenchments from 100 to 300 workers, encouraging firms to avoid permanent employees; Introduces "sole negotiating union" requiring 51% worker support; Imposes 14-day notices and prohibitions during conciliation, making legal strikes impossible Wages: Introduces unclear "floor wage" concept without adequate distinction from minimum wage; Lacks mechanism for revising the basic wage component based on changing consumption patterns; Social Security: Maintains 10-worker threshold for provident funds and benefits, excluding most unorganized sector workers; Misses opportunity to universalize social security as a legislative right Occupational Safety: Covers only establishments with 10+ workers, excluding smaller workplaces; The codes represent missed opportunities for genuine labor reform, avoiding issues like job security, collective bargaining rights, fair minimum wages, gender discrimination, and social security - especially for majority of India's workforce in the informal sector.

Keywords: labour law; India; occupational health; social security; minimum wages; industrial relations (search for similar items in EconPapers)
JEL-codes: J08 J38 J52 J53 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2025-12
New Economics Papers: this item is included in nep-inv, nep-lma and nep-sea
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