New Labour Code 2025 : Big shifts are coming to how India works — literally. The government is gearing up to roll out the New Labour Code in 2025, and it’s going to change everything from your work week to your paycheck.
Yes, you read that right. The much-talked-about 4-day work week could become a reality. But that’s just one part of the story. The new rules will reshape salary structures, boost retirement benefits, and even bring gig workers under formal protections for the first time.
So, what’s the New Labour Code all about?
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Well, it merges 29 old-school labour laws into four simplified codes:
- Code on Wages
- Industrial Relations Code
- Social Security Code
- Occupational Safety, Health, and Working Conditions Code
The goal? Cut the red tape, modernize outdated laws, and create a more flexible system that benefits both employers and employees.
Major Highlights: What’s Changing?
Here’s what’s on the cards with the new labour reforms:
- Optional 4-day work week (with longer hours per day)
- Weekly cap of 48 working hours stays
- Basic salary must be at least 50% of total CTC
- Higher PF and gratuity contributions
- Take-home salary may reduce for some
- Gig and platform workers to get social security
- Uniform wage definitions across all jobs
The 4-Day Work Week: Dream or Reality?
Under the new code, companies can let employees work 12 hours a day for 4 days, giving them a 3-day weekend. Sounds awesome, right? But don’t worry — businesses can still stick to the regular 5 or 6-day week if that works better for them. The total work hours per week won’t go beyond 48.
This move is aimed at increasing flexibility and giving employees a better work-life balance, though longer daily shifts may not be for everyone.
Salary Structure Shake-Up
One of the biggest changes will be how your salary is broken down. Your basic salary must now make up at least 50% of your CTC, which directly affects how much goes into your Provident Fund and gratuity.
What this means for you:
| Component | Current | New Rule |
| Basic Salary | 30–40% | Min 50% |
| Take-Home Pay | Higher | Might dip |
| PF & Gratuity | Lower | Will rise |
| Retirement Benefits | Limited | Better |
| Special Allowances | High | Cut down |
So while your in-hand salary might take a hit, your retirement corpus will grow faster.
Who’s Most Affected?
- Private sector employees could see a dip in monthly take-home due to higher PF cuts.
- Gig workers and freelancers will finally get social security coverage.
- Contractual workers will enjoy more consistent protections nationwide.
- HR teams and employers will need to revamp salary structures and compliance systems.
What Should You Do Now?
Get proactive!
- Talk to your HR to understand how your salary might change
- Factor in long-term benefits vs short-term income
- Prepare for potential changes in work hours or weekly schedules
- Stay updated with official announcements
The New Labour Code 2025 could mark a turning point in how India works. It promises more protection, better benefits, and greater clarity — even if it means a few growing pains along the way.
