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With the implementation of new labor codes in India, many important rules related to gratuity, PF and employment have completely changed. Now not only permanent, but also fixed-term, contract and gig workers have come under the ambit of many big benefits. These reforms aim to provide greater protection to employees and make compliance easier for companies.
New Delhi. Four new labor codes have come into effect in India from November 21, through which a unified framework has been created by abolishing the old 29 scattered labor laws. These reforms aim to provide greater protection to workers, simplify compliance for companies, and include new categories of workers, such as gig workers, in formal benefits. After the new rules, there have been many major changes in gratuity, PF, salary and job conditions, which will directly impact the employees across the country.
After how much time will you get gratuity?
Earlier, to get gratuity, any permanent employee had to complete at least five years of continuous service. But under the new labor codes, fixed-term employees (FTE) and some contract workers will now become eligible to receive gratuity after completing only 1 year of service. Although the condition of 5 years for permanent employees will continue, now more employees will come under the ambit of the rules. The formula for calculating gratuity remains the same – 15 days’ salary for every completed year of service – but its benefits will now reach lakhs of employees. Experts believe that this will increase the financial security of employees and they will get better assistance when changing jobs.
Will daily wage laborers and gig workers get PF benefits?
Under the new provisions, Provident Fund (PF) coverage will no longer be limited to traditional employees only. Fixed-term, contract, platform and gig workers have also been included in this. This will also provide social security to those workers who were earlier outside this scope. The new system makes the Aadhaar-linked UAN (Universal Account Number) completely portable, making it easier to manage PF when you change jobs or change state. Aggregator companies for gig workers will have to deposit a certain portion of their annual turnover in PF and Social Security Fund, which will give them formal security for the first time.
Why are these changes important for employees and companies?
The impact of the new labor codes is two-sided – on one hand, workers will get more protection, on the other hand, companies will find it easier to comply.
Main advantages:
- Financial security: Early receipt of gratuity and increased PF coverage will secure the future of the employees.
- The number of people joining increased: For the first time, gig and platform workers have received formal social security.
- Simplified system: Companies now have to comply with a unified code instead of 29 separate laws, simplifying documentation and HR policies.
- According to experts, these reforms will make India’s employment structure modern, transparent and in line with the future job system.
What change will this bring to the country’s employment sector?
The new Labor Codes 2025 are taking India’s labor system into a new era, where security, portability and equality have been kept at the center. From gratuity to PF, every provision is a big step towards empowering employees and simplifying the processes of companies. Experts believe that in the coming years, these changes will be deeply and positively visible in employment models, compensation structures and HR policies. With the new rules, India is moving towards a labor structure in which all types of work – permanent, contract, gig or platform – will be able to get formal recognition and protection.
