New Labour Codes 2025: What Changes for Small Businesses in Maharashtra

By Shree HR Services, Satara · 2026-10-15 · 9 min read

The four New Labour Codes came into force on 21 November 2025 and replaced 29 central labour laws. Here is what changes for small and medium employers in Satara and across Maharashtra – wages, PF, gratuity, overtime, appointment letters and more.

The four New Labour Codes at a glance

All four codes were brought into force from 21 November 2025, replacing 29 central labour laws. Maharashtra has notified its rules under the codes, and compliance is moving to online portals.

Code on Wages, 2019 – minimum wages, payment of wages, bonus and equal remuneration.
Industrial Relations Code, 2020 – trade unions, standing orders, layoffs, retrenchment and disputes.
Code on Social Security, 2020 – PF, ESIC, gratuity, maternity benefit and gig/platform workers.
Occupational Safety, Health and Working Conditions Code, 2020 – safety, working hours, leave, contract labour and inter-state migrant workers.

1. The 50% wage rule

The new definition of “wages” says that basic pay, dearness allowance and retaining allowance must be at least 50% of total remuneration. If allowances such as HRA, conveyance or special allowance exceed 50%, the excess is added back to wages. This directly increases PF, gratuity and bonus calculations for many employers who kept basic salary low.

2. Gratuity for fixed-term employees after one year

Permanent employees still need five years of continuous service for gratuity (except in case of death or disablement). Fixed-term employees, however, are now eligible for gratuity on a pro-rata basis after just one year of service.

3. Working hours and overtime

Weekly working hours are capped at 48.
Overtime must be paid at twice the ordinary rate of wages.
States may allow flexible arrangements such as a four-day week with longer daily hours, within the 48-hour limit.
Women can work night shifts with their consent and adequate safety arrangements.

4. Appointment letters, health check-ups and national floor wage

Every worker must be given an appointment letter.
Employers must provide free annual health check-ups for workers aged 40 and above in notified establishments.
The Central Government will fix a national floor wage; state minimum wages cannot be lower than it.

5. Social security for gig and platform workers

For the first time, gig and platform workers are recognised. Aggregators will contribute to a social security fund for them. ESIC coverage is also being expanded to more establishments and districts.

6. Industrial relations changes

The threshold for standing orders and for government permission for layoff, retrenchment and closure has been raised from 100 to 300 workers.
Full and final settlement (wages due) must be paid within two working days of resignation, removal, dismissal or retrenchment.
Single registration, single licence and single return are introduced to simplify compliance.

What should a Satara employer do now?

Shree HR Services, Satara offers a New Labour Code readiness review for MSMEs, factories and contractors. Call +91 92097 09369 to book a free consultation.

Restructure salary so that basic + DA is at least 50% of total pay, and recalculate PF, gratuity and bonus.
Issue or update appointment letters for all workers, including contract and fixed-term staff.
Review overtime, shift and leave policies.
Update registers, wage slips and returns to the new formats.
Plan the gratuity liability for fixed-term employees.