Equal pay, social security, night-shift protections: What the new labour codes mean for India’s IT workforce
Industry body Nasscom called the reform “a step toward greater predictability and transparency,” adding that full implementation must ensure alignment between the central codes and state-level labour and shops-and-establishments laws.
- Nov 23, 2025,
- Updated Nov 23, 2025 4:08 PM IST
In the most sweeping labour reform India has seen in decades, the Centre on Friday notified the implementation of four new labour codes, restructuring 29 existing laws into a unified framework. The government says the overhaul aims to simplify compliance, ensure timely wages, and significantly strengthen worker protection — with the IT and IT-enabled services (ITES) sector among the biggest to see immediate impact.
The four codes — Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020), and Occupational Safety, Health and Working Conditions Code (2020) — are now in force nationwide.
A major change is the requirement for IT and ITES companies to extend full social security benefits to fixed-term employees, putting them at par with permanent workers. This includes provident fund, ESIC, insurance coverage, gratuity, and other entitlements — a long-pending demand in a sector heavily dependent on contract workers, vendor staff, and project-based deployments.
The Ministry of Labour & Employment said that, earlier, employers had no mandatory obligation to follow specific timelines for wage payments. Under the new rules, companies must now pay salaries by the 7th of every month, a move expected to improve cash flow stability for millions of workers and build greater trust in employer-employee relationships.
The codes also mandate ‘equal pay for equal work’, putting pressure on IT companies to eliminate wage disparities across roles with similar skill levels. At the same time, the new laws aim to boost female workforce participation by requiring firms to facilitate safe working conditions for women working night shifts — including transport, security, and grievance redressal mechanisms.
In addition, the codes direct companies to fast-track resolution of complaints related to harassment, wage disputes, and discrimination, while making appointment letters mandatory for all categories of employees.
For the IT sector, which employs lakhs of contractual and fixed-term workers, the reforms introduce much-needed uniformity in employment terms. Industry body Nasscom called the reform “a step toward greater predictability and transparency,” adding that full implementation must ensure alignment between the central codes and state-level labour and shops-and-establishments laws.
“As rules are finalised, Nasscom will focus on supporting a smooth and practical transition for the industry,” it said, noting that avoiding overlapping compliances must be a top priority.
The government says the consolidated framework modernises India's labour governance system, strengthening protections once scattered across 29 laws, and preparing the workforce for more dynamic, flexible employment models.
In the most sweeping labour reform India has seen in decades, the Centre on Friday notified the implementation of four new labour codes, restructuring 29 existing laws into a unified framework. The government says the overhaul aims to simplify compliance, ensure timely wages, and significantly strengthen worker protection — with the IT and IT-enabled services (ITES) sector among the biggest to see immediate impact.
The four codes — Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020), and Occupational Safety, Health and Working Conditions Code (2020) — are now in force nationwide.
A major change is the requirement for IT and ITES companies to extend full social security benefits to fixed-term employees, putting them at par with permanent workers. This includes provident fund, ESIC, insurance coverage, gratuity, and other entitlements — a long-pending demand in a sector heavily dependent on contract workers, vendor staff, and project-based deployments.
The Ministry of Labour & Employment said that, earlier, employers had no mandatory obligation to follow specific timelines for wage payments. Under the new rules, companies must now pay salaries by the 7th of every month, a move expected to improve cash flow stability for millions of workers and build greater trust in employer-employee relationships.
The codes also mandate ‘equal pay for equal work’, putting pressure on IT companies to eliminate wage disparities across roles with similar skill levels. At the same time, the new laws aim to boost female workforce participation by requiring firms to facilitate safe working conditions for women working night shifts — including transport, security, and grievance redressal mechanisms.
In addition, the codes direct companies to fast-track resolution of complaints related to harassment, wage disputes, and discrimination, while making appointment letters mandatory for all categories of employees.
For the IT sector, which employs lakhs of contractual and fixed-term workers, the reforms introduce much-needed uniformity in employment terms. Industry body Nasscom called the reform “a step toward greater predictability and transparency,” adding that full implementation must ensure alignment between the central codes and state-level labour and shops-and-establishments laws.
“As rules are finalised, Nasscom will focus on supporting a smooth and practical transition for the industry,” it said, noting that avoiding overlapping compliances must be a top priority.
The government says the consolidated framework modernises India's labour governance system, strengthening protections once scattered across 29 laws, and preparing the workforce for more dynamic, flexible employment models.