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India Unveils Four Labour Codes, Cuts Gratuity Threshold to One Year for Fixed-Term Staff

The move brings fixed-term staff closer to parity with permanent employees.

Overview

  • The government consolidated 29 labour laws into four codes designed to simplify compliance and expand worker protections.
  • The one-year gratuity eligibility applies only to fixed-term employees, while permanent staff remain under the five-year rule.
  • Fixed-term workers will receive the same pay structure, leave, medical cover, and social-security benefits as regular employees.
  • The codes extend coverage to informal, gig and platform workers, migrant labourers, and women workers, with formal definitions for gig work, platform work, and aggregators.
  • Principal employers must provide health and social-security benefits to contractual workers, and media reports say aggregators will contribute 1–2% of turnover to a Welfare Fund capped at 5% of payouts.