In a landmark move set to transform India's corporate landscape, the government has implemented four new Labour Codes, bringing significant changes to one of the country's largest employment generators—the Information Technology sector. Effective immediately from Friday, November 21, 2025, these codes introduce stricter regulations for salary disbursements and worker benefits.
Key Reforms for Salary and Wage Protection
The Ministry of Labour & Employment has announced a crucial new mandate for the IT and ITES sectors. All companies are now required to pay employee salaries by the 7th of every month. This directive, which took effect on November 21, 2025, aims to ensure financial stability for millions of professionals, reduce work-related stress, and build trust between employers and employees. Previously, there was no mandatory compliance for employers regarding the timely payment of wages.
Ensuring Equality and Security for the Workforce
The new Labour Codes go beyond just timely payments. A cornerstone of the reform is the principle of 'equal pay for equal work', ensuring that all employees, regardless of their employment type, are compensated fairly for the same role. This is particularly impactful for the IT industry, which heavily relies on fixed-term contracts and project-based deployments.
Furthermore, the codes strengthen the participation of women in the workforce. Companies are now directed to create necessary facilities for women to work night shifts safely, opening doors to more opportunities and higher earnings. The government has also mandated that firms ensure the timely resolution of issues related to harassment, discrimination, and wages.
Impact on Fixed-Term Employees and Social Security
Harpreet Singh Saluja, President of the IT workers' union Nascent Information Technology Employees Senate (NITES), highlighted the profound impact of these changes. He stated that a significant portion of the industry operates on fixed-term contracts and vendor arrangements, and the new codes will standardize benefits for these workers.
Fixed-term employees must now receive the same benefits as permanent employees for the duration of their contract, a move that enhances job security and provides a more level playing field. Rules concerning working hours and overtime have also been made more uniform, addressing the common industry challenges of extended workdays and high-pressure project cycles.
A long-standing demand from the sector's employees has been addressed with the expansion of social security. Under the Code on Social Security, 2020, all workers, including those on fixed-term contracts, will now be eligible for Provident Fund (PF), Employees' State Insurance Corporation (ESIC) coverage, insurance, and other social security benefits. The mandate also makes appointment letters compulsory for all employees.
This comprehensive labour reform by the Indian government marks a decisive step towards replacing outdated laws and aligning the country's workforce regulations with modern global economic dynamics.
