Introduction
India’s new labour laws, which kicked in on November 21, 2025, are starting to shake things up for salaried employees across the country. On paper, the idea is to boost financial security for workers. But in reality, many people may notice that their take-home salary suddenly feels a bit lighter. The main reason? Higher contributions toward provident fund and gratuity—good for the long term, but not so great when you’re checking your monthly bank balance.
Main Details
Under the newly enforced labour codes, companies now must ensure that basic pay forms at least 50% of the total CTC. That sounds simple, but it changes the math completely. Employers will have to adjust salary structures, and when basic pay goes up, PF automatically goes up too. And since PF is calculated as 12% of basic, the deduction increases right away.
Gratuity also gets impacted, because it’s based on “wages,” which now include basic pay plus allowances. So, even though the employee gets stronger retirement benefits, the immediate cash in hand shrinks a bit. Many HR teams have already started recalculating salary sheets, and yeah, some employees might not be thrilled about what the next payslip shows.
Background
These labour law changes didn’t appear overnight. The government actually merged 29 older laws into four new codes: Code on Wages, Industrial Relations Code, OSHWC Code, and the Code on Social Security. The goal was to simplify everything and make wage and benefit rules more uniform across India.
Earlier, only around 30% of workers actually had minimum wage protection or formal social security. So the new rules do widen the safety net. But at the same time, companies might need to rework their payroll systems and that could create short-term hiccups.
Latest Updates
With the rules in force, a lot of companies have already started sending revised salary break-ups. Some are doing it quietly, others with detailed emails trying to explain the logic behind the changes. Employees are being advised—almost everywhere—to double-check payslips over the next few months. If anything looks odd, they’ll need to raise it fast.
Labour experts also want the government to step in and monitor how workers are affected, especially those who depend heavily on monthly take-home income. HR teams too are preparing briefing sessions since many employees are confused about what’s happening and why.
Conclusion
The new labour laws are a big shift. They aim to strengthen long-term financial security but trim short-term take-home pay. Employees will need to stay aware, talk to their HR departments, and keep track of their salary structure. It’s a bit of an adjustment phase, but understanding the changes early will make the whole transition smoother.
Photo Credits: Freepik – Designed by Freepik.
0 Comments