Indias new Labour Codes have been reformed to manage salaries hours of work social security and the environment in which these workers undertake their work in the hopes of bringing about positive changes in the lives of over 50 crore (500 million) workers. Three provisions worth emphasising for employees are: Gratuity remains capped at ₹20 lakh. Double overtime pay remains in effect. After 180 working days workers are entitled to 1 day of leave for every 20 days of work. The new Labour Codes replace 29 existing labour laws. The new Labour Codes are organized under four codes: the Code on Wages 2019 the Industrial Relations Code 2020 the Code on Social Security 2020 and the Occupational Safety Health and Working Conditions Code 2020. The purpose of these reforms is to simplify labor regulations while improving clarity and protection for workers throughout India. By modernising labour regulations enhancing workers welfare and aligning the labour ecosystem with the evolving world of work this landmark move lays the foundation for a future-ready workforce and stronger resilient industries driving labour reforms for Aatmanirbhar Bharat reads the press release published by the Ministry of Labour & Employment. While the four Labour Codes address a lot of reforms these three central changes will affect the lives financial stability and welfare of workers in both the organized and unorganized sectors. The cap for tax-free gratuity has been fixed at ₹20 lakh. This measure will apply to all businesses that are governed by the gratuity laws and has important implications for those employees nearing retirement or in the later stages of their careers. The ₹20 lakh gratuity cap represents the maximum gratuity payment exempt from tax. This limit was raised from Rs 10 lakh during 2018. Any gratuity amount above Rs 20 lakh will be added to the employees taxable income and taxed according to their applicable income tax slab. The gratuity period has now been shortened from 5 years to 1 year. Workers in organized and unorganized industries are entitled to receive gratuity payment after 1 year of service in their organization. This is a big change as previously 5 years of service was required to qualify for gratuity. Further fixed-term employees are also eligible for gratuity without the 5-year service requirement making this benefit significantly more inclusive. 1 Day of Leave for Every 20 Days Worked Under the Occupational Safety Health and Working Conditions (OSH) Code earning paid leave will be easier for employees. There are two significant changes within this reform. Leave Entitlement Cut from 240 Days to 180 Days Before employees had to complete 240 working days in a year to be able to take annual leave. Under the new rules eligibility starts after 180 working days which allows new employees to have access to their leave benefits much quicker. Employees will now earn 1 day of leave for every 20 days worked which allows for quicker and fairer leave accrual. This change is especially beneficial for those employees who are contract workers seasonal laborers and migrant workers. One of the most significant changes for daily-wage and industrial workers concerns overtime. The new Labour Codes direct that when workers work beyond their normal hours they must be compensated at double the regular hourly work rate. Employers must maintain reliable records of overtime hours whereas importantly employees cannot be required to work overtime without their consent. While the idea of being compensated at double the rate for working overtime has always existed on paper it was an aspect of work regulation that was weak in performance and often vague. Now with strong provisions thorough compliance structures and web-based inspection processes - individual workers have a strong legal claim for fair overtime compensation. Industries that depend on long hours — manufacturing textiles logistics security and hospitality — will see an impact the wage payments due to the change. Salary Security for All National minimum wage to prevent regional inequalities. Revising minimum wages each five years. Paying the same wage for men and women. Paying wages on time and paying them at all. These provisions make certain that gig workers platform workers daily laborers and workers in small shops or establishments are not deprived of wage security. Improved Social Security Coverage Increased ESIC coverage from 566 districts to all districts. EPF benefits extended to workers both in the formal and informal/unorganized sectors as well as self-employed workers. A national database for unorganized workers to facilitate easy benefit distribution. A new social security fund for gig and platform workers.