M R Yuvatha, Senior Correspondent, siliconindia

• Basic salary ≥50% of CTC increases PF and gratuity but reduces immediate pay.
• Platform and contract workers now get social security and retirement benefits.
• Four new codes simplify laws, ensure minimum wages, gender pay parity, and better leave, overtime, and safety norms.

On 21 November 2025, India quietly flipped one of the biggest switches in its 75-year labour history. Four new Labour Codes on Wages, Industrial Relations, Social Security, and Occupational Safety, Health & Working Conditions replaced 29 old laws. For the first time since Independence, every worker whether in a glass-and-steel office, a construction site, a Swiggy delivery fleet, or a village brick kiln is covered under a single, modern framework.

The headlines scream ‘take-home salary will fall’. That is only half the story. The other half is that India is forcibly moving from a low-basic, high-allowance culture to a high-basic, high-retirement-security culture.

Whether you like it or not, your CTC is about to be rewired.

Mandatory appointment letters, universal minimum wages, and pan-India social security coverage (including ESIC expansion) ensure greater formalisation. This strengthens worker confidence -critical for skill-intensive manufacturing such as fabs, ATMP, component manufacturing and design centres" says, Ashok Chandak, President, IESA and SEMI India.

The 50% Basic Salary Rule

The Code on Wages mandates that wages (basic + dearness allowance + retaining allowance) must be at least 50% of the total CTC. 

Today, many private-sector employees have basic salaries as low as 25-35% of CTC, with the rest parked in tax-friendly allowances (HRA, LTA, special allowance, etc.). Companies loved it because PF (12%) and gratuity were calculated only on basic, keeping their liability low. Employees loved it because take-home was higher. That party is over.

Example:  Current CTC Rs 15 lakh 

Basic: Rs 4 lakh (27%) → PF contribution Rs 48,000/year 

New structure (after 50% rule) 

Basic: Rs 7.5 lakh → PF contribution jumps to Rs 90,000/year 

Take-home drops by roughly Rs 3,000-Rs 4,500 per month (assuming employer does not increase CTC).

Gratuity Gets a Turbo Boost

Gratuity is calculated as (Last drawn basic + DA) × 15/26 × years of service. 

Because basic will now be higher, gratuity payouts will shoot up sometimes by 50-80%. Fixed-term contract workers (earlier ineligible) now get gratuity after just one year instead of five.

Also Read: Top 10 Key Takeaways from Gen Z's Early Job Exits

Gig & Platform Workers Finally Enter the System

Swiggy, Zomato, Urban Company, Ola, Dunzo every aggregator must now contribute 1-2% of annual turnover (capped at 5% of amount paid to the worker) into a social security fund. This will finance life & disability insurance, health benefits, maternity benefits, and old-age protection for millions who were earlier invisible.

Here Are The 12 Game-Changing Rules Everyone Must Know Right Now

1. National Floor Wage: No state can fix minimum wages below the Centre’s floor level. Universal minimum wage for the first time.
2. No Gender Discrimination: Same work, same wage legally enforceable.
3. Free Annual Health Check-up: Mandatory for every employee above 45 (some drafts say 40).
4. Work-From-Home Formalised: Allowed in service sectors by mutual agreement.
5. Women Night Shifts Legalised: With consent and strict safety protocols (transport, CCTV, etc.).
6. Overtime Pay Doubled: Minimum 2× normal rate, no more compensatory off loopholes.
7. Annual Leave After 180 Days: Earlier it was 240 days.
8. Appointment Letter Mandatory: Even for unorganised-sector workers.
9. Commuting Accidents Covered: Accident while travelling to/from work now counts as employment injury.
10. Layoff Threshold Raised: Factories with up to 300 workers can lay off without government permission (earlier 100).
11. One Nation, One License: Contract labour licence valid across India for five years.
12. Strike Notice Mandatory: 14 days’ notice even for mass casual leave.

The Political Masterstroke No One Is Talking About

By forcing higher PF and gratuity, the government is creating a massive pool of long-term domestic savings exactly what India needs to reduce dependence on volatile FII money.

EPFO already manages Rs 23 lakh crore, this reform could easily add another Rs 2-3 lakh crore annually.

What Do We Need to Do Before March 2026​?

• Ask HR for your revised salary structure (most companies will roll it out with April 2026 appraisals).
• Recalculate tax liability, you may fall into a higher tax bracket.
• If take-home drop is severe, negotiate a CTC hike or voluntary top-up into VPF/NPS to maintain cash flow.
• Update nomination details in EPF, higher corpus means family security matters more.

Wrapping It Up!

November 21, 2025, is not just another date. It is the day India decided that its workers deserve richer retirements even if it means thinner wallets today. The era of maximise take-home, minimise future security is officially over.

Your salary slip will never look the same again.