New Labor Laws: The Government of India has included four new codes in the 29 year old labor laws. Notification of new applicable codes has also been issued on November 21, 2025, after which companies will have to make major changes in their salary structure. In the labor codes implemented by the government, more attention has been paid to social security, but it can also be a disadvantage for the employees, such as their take home or in-hand salary may be reduced.

Actually, under the new Labor Code, the basic salary of the employees must be at least 50 percent of their CTC. Till now, companies used to increase the allowances of their employees by keeping their basic pay low, which included HRA, DA etc. By doing this, the PF and gratuity contribution of the employees was reduced and their take home salary was higher. Now let us understand what kind of changes have been made in the new labor code and by how much the take home salary will be reduced.

Why were new labor codes brought?

The purpose of implementing the new labor code is to ensure social security of the employees. The purpose of increasing basic salary to 50 percent of CTC is that their contribution towards PF and gratuity will increase, due to which they will have a strong fund at the time of retirement. This will provide long term benefits to the employees, but at present the burden on their pockets may increase.

Understand the complete calculation like this

Let us assume that the CTC of an employee is Rs 50000. In this his basic salary is between 15 to 20 thousand rupees. On this, 12 percent PF contribution is deducted, which is between Rs 1800 to Rs 2400. Now with the implementation of the new labor code, companies will have to pay 50 percent of CTC basic salary to their employees. According to 50 thousand CTC it becomes 25 thousand. On this, PF contribution will be Rs 3000, which is more than Rs 1200 to Rs 600. This will increase retirement savings, but Rs 1200 more will be deducted from the take home salary. Similarly, gratuity will also be deducted on take home salary.

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New Labor Laws: New labor codes have come into effect in the country from tomorrow i.e. 21st November and it is going to have a direct impact on crores of working people. To eliminate many old problems related to employment, the government has removed 29 old laws and implemented four new codes. Now security for companies and employees will be stronger than ever.

A big question arises from here. Are these new labor laws only for people who have been working for a long time or will they also affect those who have been working for a year? Many people want to know how beneficial the new laws will prove to be for them. Let us tell you complete information about this.

Will new laws apply to one year employees?

The impact of the new labor code is not limited to just old or permanent employees. If you have been working for one year then many big benefits will be directly applicable to you also. The most important change is that of gratuity. Earlier, five years of service was required. But now even after one year of service, gratuity will be given according to the period of work. This means that now new employees will also benefit from this rule.

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Facilities like PF and social security will increase with the new laws. With this, minimum wage will become a big support for those in the unorganized sector. From daily wage labourers, domestic helpers to those working in small setups, everyone is now coming into the safe profit zone. This means that even one year old employees are the real beneficiaries of this change.

Major changes in the working environment

After the implementation of the new laws, now at least double the normal salary will be paid on overtime. Women have been allowed to work in night shifts with their consent and safety arrangements. Work from home has been formally given place in the service sector. A two-member tribunal will be formed to resolve work-related disputes quickly.

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The Contract Labor Act will now apply only to those places where fifty or more contract workers work. The threshold limit of factories has also been increased. Due to which the burden of rules on small industries will be reduced. Overall, the new labor code has brought a big shield of protection for working people and clear rules for companies.

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