New Labour Code – The Indian workforce is set to experience a major transformation in 2025 as the government plans to roll out a new labour code that allows companies to adopt a 4-day work week structure. With an extended 3-day weekend and flexible working hours, this reform promises to significantly enhance work-life balance while maintaining overall weekly working hours. Here’s everything you need to know about the upcoming changes and how they may impact you.
What is the New 4-Day Work Week Policy of New Labour Code?
The Ministry of Labour and Employment is finalising the implementation of four labour codes that will provide companies with the freedom to allow employees to work four days a week instead of the traditional five or six. However, the weekly working hour limit of 48 hours will remain unchanged, meaning employees might work longer hours per day across fewer days.
Key Highlights of the New Labour Code 2025
- Employees can opt to work 12 hours per day for 4 days to get a 3-day weekend.
- The total number of working hours per week will remain capped at 48.
- Companies have flexibility to adopt 4, 5, or 6-day work week formats.
- Improved provisions for overtime, annual leave, and EPF.
- Unified rules under four labour codes: Wages, Social Security, Occupational Safety, and Industrial Relations.
Objectives Behind the 4-Day Work Week Reform
The 4-day work week reform aims to modernize India’s employment practices by promoting a healthier work-life balance. By condensing work hours into fewer days, the initiative seeks to reduce employee burnout, improve mental well-being, and boost overall productivity. It also encourages companies to adopt more flexible work models that align with global standards and evolving workforce expectations.
The government’s goal is to create a modern and efficient work culture aligned with international standards. The move is expected to:
- Enhance work-life balance and reduce employee burnout.
- Increase productivity through focused workdays.
- Provide employees with more personal or family time.
- Encourage adoption of flexible work models, especially post-COVID.
Pros and Cons of the New Work Week Structure
Pros:
- More Rest Days: Longer weekends help reduce stress and rejuvenate employees.
- Higher Job Satisfaction: Flexibility improves overall job morale.
- Improved Mental Health: Extended time off aids in mental wellness.
- Cost Savings: Reduced commute and office overheads for companies.
Cons:
- Longer Workdays: 12-hour shifts may lead to fatigue.
- Not Ideal for All Sectors: Manufacturing and services with fixed hours may find it hard to adapt.
- Potential Productivity Dips: Fatigue from extended shifts may affect focus.
Comparison Table: Traditional Work Week vs. New Work Week Model
| Aspect | Traditional (5-6 Days) | New (4-Day Option) |
|---|---|---|
| Work Days Per Week | 5 or 6 | 4 |
| Daily Work Hours | 8–9 | Up to 12 |
| Total Weekly Work Hours | 48 | 48 |
| Weekly Off Days | 1 or 2 | 3 |
| Mental Health & Rest | Moderate | Improved |
| Work-Life Balance | Limited | Significantly Better |
| Suitability for All Sectors | High | Medium |
| Employee Satisfaction | Varies | Expected to Increase |
Which Sectors Will Be Most Impacted?
- IT & Software: High adaptability due to remote and flexible work culture.
- Corporate Offices: Likely to adopt to improve retention and morale.
- Retail & Manufacturing: Limited implementation due to fixed-hour demand.
- Healthcare & Public Services: May see no changes due to 24/7 operations.
Implementation Timeline and What to Expect
The labour ministry has confirmed that the codes will likely be implemented across India in phases starting mid-2025. State governments will also play a role, as labour is a concurrent subject. Companies will have to realign HR policies and employee contracts accordingly.
Additional Reforms Under New Labour Codes
| Feature | Old Rules | New Labour Code 2025 |
|---|---|---|
| Gratuity Eligibility | 5 years of service | Pro-rata for contract workers |
| Provident Fund | Mandatory for eligible employees | Extended to gig/platform workers |
| Leave Encashment | Limited and sector-specific | Standardised across industries |
| Overtime | Often unclear or poorly regulated | Clearly defined, with penalties |
| Contractual Workers | Fewer benefits | Better legal protection |
| Salary Structure Transparency | Complex and varied | Simplified with fixed components |
| Maternity Benefits | Vary by employer | Uniform and protected by law |
The 4-day work week initiative, driven by the 2025 labour code reforms, is a landmark move in modernising India’s employment framework. While it offers numerous advantages in terms of flexibility and personal well-being, it also presents challenges in implementation, especially in sectors with rigid schedules. As companies begin to adopt these policies, both employers and employees must find a balance that ensures productivity without compromising health and happiness.
FAQs about New Labour Code
Q1. Will the 4-day work week be mandatory for all companies?
No, it is optional. Companies can choose between a 4, 5, or 6-day work week format depending on their operational needs.
Q2. Will my salary be reduced if I work only 4 days a week?
No, as long as you complete the required 48 hours per week, your salary will remain unchanged.
Q3. Can I choose which days to work under the new rule?
That depends on the company’s internal policies. Employers may or may not offer custom day selections.
Q4. Is this applicable to government employees as well?
As of now, the rule primarily targets private sector jobs. Government adoption may come later depending on policy changes.
Q5. When will the 4-day work week policy come into effect?
The new labour codes are expected to be implemented in phases starting mid-2025.