New Labour Code 2025 Everything from gratuity to gig worker insurance, Benefits to regular workers?

New Labour Code 2025 Everything from gratuity to gig worker insurance, Benefits to regular workers?

The New Labour Code 2025 in India is a comprehensive overhaul of existing laws, introducing significant changes such as reducing the gratuity eligibility period from 5 years to 1 year for fixed-term employees, recognizing gig and platform workers under labour law for the first time, and mandating social security benefits including insurance for gig workers. The reform also extends equal benefits and protections to fixed-term, contract, and gig workers, aiming to formalize and stabilize the workforce. Regular workers benefit from minimum wages, timely wage payments, mandatory health checks, and improved dispute resolution mechanisms under the new codes.

Gratuity Changes and Worker Benefits

The new labour code reduces the minimum continuous service period for receiving gratuity from five years to one year, bringing fixed-term employees on par with permanent workers. This change is designed to enhance financial security, especially in high-attrition sectors, by enabling workers to claim gratuity earlier. The definition of wages for gratuity calculation now includes 50% of total remuneration, potentially increasing the gratuity amount. Other benefits include equal salary structure and leave entitlements for fixed-term employees as permanent staff, which promotes direct hiring and reduces excessive contractualisation.​

Social Security for Gig and Platform Workers

For the first time, gig and platform workers such as delivery agents and ride-hailing drivers are formally covered under labour laws. Aggregators and platforms must contribute 1-2% of their annual turnover towards a dedicated fund to finance insurance, health protection, disability support, maternity benefits, and old-age pensions for these workers. A national database will help track employment details and ensure portability of benefits across states, thus improving social security for this workforce segment.​

Improvements for Regular Workers

The new codes guarantee a statutory minimum wage for all employees, whether in organized or unorganized sectors, reducing wage disparities. Other benefits include mandatory payment of wages during leave, free annual health check-ups for workers above 40 years, expanded ESIC coverage including plantation and hazardous industry workers, and gender-neutral employment rules protecting transgender persons. The codes also simplify compliance for employers by consolidating registrations, licenses, and inspections, facilitating a more efficient and worker-friendly framework.​

New Labour Law versus Old Laws

The 2025 reforms replace 29 older labour laws with four streamlined codes aimed at simplifying enforcement, improving worker welfare, ensuring better wages, expanding social security, and introducing faster dispute resolution through two-member tribunals. The reforms modernize workplace safety norms and broaden the definition of workers, including digital and audio-visual professionals. This marks a shift from rigid, fragmented legislation to a more inclusive and flexible framework supporting both workers and employers.​

In summary, the New Labour Code 2025 provides more inclusive benefits for all categories of workers—regular, fixed-term, gig, and platform—while promoting formal employment, financial security, and health protections under a simpler regulatory regime.