Hospitality Herald

---

1. What’s Changing: The New Labour Codes

From 21 November 2025, the Government of India has enforced a set of four unified labour codes, replacing 29 older labour laws. Ministry of Labour & Employment
These are:

• Code on Wages, 2019
• Industrial Relations Code, 2020
• Code on Social Security, 2020
• Occupational Safety, Health & Working Conditions Code, 2020 BDO India

Key highlights for businesses and workers:

• A national “floor wage” to cover all workers, including previously unorganised sectors. www.ndtv.com
• Gig workers, platform workers, fixed-term workers are explicitly brought into the social security framework. EY
• Simplified compliance: single registration, online filings, risk-based inspections. Press Information Bureau
• For businesses: higher lay-off/retirement thresholds (firms up to 300 workers can retrench without prior government approval). Reuters

---

2. Implications for Businesses

Easier compliance & clearer definitions

With unified codes, businesses now have fewer overlapping statutes. One digital portal, one registration model.

Example: A company that previously managed separate registers for Payment of Wages Act, Minimum Wages Act and Factories Act can now align under the Code on Wages.
This reduces legal complexity and inspector-dependent risk. Press Information Bureau

Adjustments required

• The definition of “wages” has been standardised; basic pay must constitute a minimum portion of CTC in many cases. This changes payroll structuring. The Times of India
• Businesses with contract, gig or platform-based workforce need to update social security contributions, registration of workers and ensure compliance.
• For labour-intensive sectors (like hospitality, F&B, manufacturing) the new thresholds (300 workers) mean more flexibility — but also require readiness for future rules when scaling. Reuters

Strategic business steps

• Review workforce categorisation: Are workers full-time, fixed-term, platform-based? Update contracts and benefits.
• Audit payroll: Calculate how basic pay, allowances, bonuses are defined/structured under the new “wages” definition.
• Update compliance systems: Register via new portals, maintain digital records, prepare for risk-based inspections.
• Plan financially: While simplified, some benefits (social security, gratuity etc) might cost more in medium term — budget accordingly.

---

3. Benefits for Workers & Labourers

More inclusive social security

Workers previously outside formal laws — gig, platform, unorganised sectors — are now formally covered under the Code on Social Security. EY
Example: A delivery-app rider now may access pension, maternity/disability cover, rather than none.

Written terms & transparency

Employers are required to issue employment letters. Workers get clearer terms: hours, wages, benefits. Reuters

Minimum wage guarantee & equal pay

The floor-wage concept aims to reduce regional wage disparity. Also, the principle of “equal pay for equal work” is reinforced. www.ndtv.com

Safety and working conditions improved

Under OSH&W Code, ceilings for working hours, enhanced safety protocols, health check-ups are mandated. Reuters

---

4. Example Scenarios

Example A – Large hospitality property
A hotel employing 350 staff earlier required prior state approval to retrench >100 staff under the old Industrial Disputes Act. Under the new code, up to 300 workers can be retrenched without prior permission — giving more operational flexibility. EY

Example B – Platform worker
A food-delivery partner previously considered independent, but now recognised as “platform worker” under the codes, eligible for social security benefits via contributions from the aggregator. BDO India

Example C – Payroll structure change
An employee previously had ₹30,000 basic + large allowances. Under new wages definition, if basic is <50% of CTC, it might need restructuring so that benefits like gratuity/PF based on basic are higher. The take-home may drop in the short term, but long-term retirement benefit improves. The Times of India

---

5. What Hospitality Businesses Should Do Now?

1. Categorise all staff: full-time, part-time, contract, gig.
2. Review payroll structure to ensure compliance with new wage definition.
3. Register all workers (including contractual) in the social-security scheme.
4. Update employment letters and contracts.
5. Revise workforce planning: facilities, hours, safety protocols must align with OSH&W Code.
6. Budget for higher social-security contributions and potential cost shifts.
7. Train HR/payroll teams and line managers on the new rules.
8. Use digital systems for registration, returns and records.

---

Final Thought

The labour-law overhaul is both an opportunity and a responsibility for businesses. For hoteliers, resorts, F&B operators, it means: clearer rules, inclusive workforce, but also costs and implications to manage. For workers, it signals a new era of inclusion, rights and security.

In Part 2 of this series we’ll explore implementation timelines, state-wise nuances, deeper case-studies for hospitality, and how businesses can turn compliance into competitive advantage.