New Labor Code 2026: Central Government’s big decision! Codes to gain momentum after five years; Full implementation in 2026

By Samira Vishwas On Dec 27, 2025

Roadmap of government to increase employment is ready
It will be fully implemented in 2026
3.5 crore employment target, 1 lakh crore employment scheme

New Labor Code 2026: After five years of waiting, the government has accelerated the implementation of four labor codes. According to the government, these codes will become fully effective in 2026 after the issuance of regulations related to them. This will ensure minimum wages and universal social security for workers across the country. The Labor Ministry is also planning to introduce EPFO 3.0 in 2026. This will speed up the process of withdrawal of Employees’ Provident Fund (PF), facilitate settlement of pension under Employees’ Pension Scheme 1995 and settlement of insurance claims under Employees’ Deposit Linked Insurance Scheme 1976.

Union Labor and Employment Minister Mansukh Mandaviya said that 2025 is a transformative year for India’s labor and employment system. Four Labor Codes came into effect on 21 November 2025, under which 29 old labor laws have been consolidated into a modern and simplified framework. He said that in 2026, the government’s focus will be on technology-based services, effective implementation on the ground and enforcement of labor codes. This will increase transparency, equality and predictability in the workplace and accelerate India’s progress towards a modern, formal and inclusive labor market.

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The Union Minister said that under the Pradhan Mantri Vikas Bharat Rojgar Yojana, the target is to create 35 million jobs in the next two years with an outlay of approximately Rs 1 lakh crore. Due to consistent policy efforts, social security cover has increased from 19 percent 10 years ago to over 64 percent, which is an internationally recognized level. According to the minister, reforms in the Employees’ Provident Fund Organization (EPFO) have simplified the withdrawal process and made funds available to lakhs of members faster. Digital platforms such as the e-Shram Portal and the National Career Service are also providing social security and employment services to workers at a larger scale.

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However, many central trade unions have opposed the labor codes and called them anti-labour. On 22 December 2025, the Joint Forum of Central Trade Unions called for a nationwide strike on 12 February 2026. Unions have warned of tougher protests if the government notifies the rules. Industry has supported these reforms. Industry representatives associated with the Confederation of Indian Industry (CII) say the labor code will promote worker welfare as well as ease of doing business and prepare India’s labor system for the future.