India Revolutionizes Social Security with New Labour Code

The Code on Social Security, 2020, effective November 21, 2025, reforms India's labour laws, consolidating nine into a single framework. It extends social benefits to diverse workforces, including gig workers, through digitized systems, enhanced maternity benefits, and unified wage definitions, aiming for a comprehensive and inclusive welfare system.

The Indian government has implemented the Code on Social Security, 2020, effective from November 21, 2025, marking a significant overhaul of the country's labour laws. This reform consolidates nine existing labour laws into a more manageable framework, aimed at simplifying compliance and extending benefits to broader demographics, including organized, unorganized, gig, and platform workers.

Among its transformative elements, the Code amalgamates life and disability insurance, health and maternity care, provident fund, and gratuity provisions. Fixed-term employees now qualify for gratuity after just one year of continuous service, addressing a previous requirement of five years. Notably, gig and platform workers gain social security benefits via government-formulated schemes, funded by the Centre, States, and aggregators, and overseen by a newly established National Social Security Board.

Expanding its safety net, the Code mandates provident fund coverage for establishments with 20 or more workers and introduces a National Database for Unorganised Workers, ensuring streamlined access to benefits via a unique Aadhaar-linked identification. Definitions of wages have been standardized, impacting benefits calculation, while the Employees' State Insurance Corporation (ESIC) coverage extends nationally. Several provisions favor women employees, including enhanced maternity leave and post-maternity work-from-home options. The reform also facilitates business operations through digitalization and reduced compliance burdens, advancing towards the government's Viksit Bharat vision for 2047.

(With inputs from agencies.)