A Landmark Reform in India’s Labour Landscape
The Government of India’s decision to enforce the four new Labour Codes from 21 November 2025 marks one of the most sweeping modernizations of labour governance in decades. By consolidating 29 disparate laws into four simplified, comprehensive codes, the reforms aim to create a labour environment that is transparent, equitable, and adaptable to the demands of a rapidly evolving economy.
For India’s hospitality and tourism industry, which employs one of the largest and most diverse workforces in the country, these reforms are not just administrative changes but represents a structural transformation poised to elevate the entire sector.
Formalization: Bringing Order to an Informal Ecosystem
The hospitality sector including hotels, restaurants, travel services, events, and allied operations, has traditionally depended on a workforce marked by informality. Contract staff, part-time employees, housekeeping teams, drivers, guides, and gig-based partners often work without documentation or predictable protection.
The new Labour Codes address this systemic gap through a mandatory appointment letter for every employee, formalizing terms of employment across roles and levels. This move ensures greater clarity, accountability, and job security, fostering a more professional and fair working culture.
Fair Wages and Transparent Compensation
A decisive feature of the reforms is the introduction of a National Floor Wage, ensuring uniformity of minimum wages across states. The standardisation of the definition of ‘wages’ simplifies calculations for overtime, gratuity, bonuses, and provident fund, offering workers predictable earnings and employers’ clearer compliance.
For an industry accustomed to extended and irregular work hours, the requirement to pay overtime at twice the standard rate is a powerful step toward fair compensation and respect for labour.
Equally significant is the provision enabling fixed-term employees to receive gratuity after just one year of service, aligning their benefits more closely with permanent staff and strengthening workplace parity.
Social Security for the Gig Workforce
Perhaps the most pioneering shift is the inclusion of gig and platform workers within the social security framework. Freelance guides, drivers, adventure instructors, event professionals, and other self-employed service providers who are invisible in the benefits ecosystem, will now gain access to insurance, pension schemes, and provident fund coverage.
With Aadhaar-enabled portability, workers frequently moving between cities or jobs can now maintain benefit continuity which will be an invaluable support for the tourism workforce.
Improved Health, Safety, and Workplace Welfare
The new Occupational Safety, Health and Working Conditions Code reinforces employer responsibility for creating safe and supportive workplaces. Annual health check-ups for workers aged 40 and above, recognition of commute related risks in certain cases, and clarity on safety norms offer enhanced protection for those engaged in strenuous, guest handling roles.
For an industry where physical effort, equipment handling, and long shifts are routine, these provisions can significantly reduce occupational vulnerabilities.
Expanding Opportunities for Women
One of the most progressive provisions is the permission for women to work night shifts, subject to consent and adequate safety arrangements. Since hospitality often operates round the clock, this change opens new pathways for women’s employment, particularly in hotels, restaurants, aviation linked services, and travel operations.
Reaffirmation of equal pay for equal work strengthens the sector’s commitment to gender equity.
Ease of Doing Business for Hospitality Entrepreneurs
Small and medium hospitality operators including standalone hotels, homestays, cafés, restaurants, and travel agencies, will benefit from simplified compliance through single registration, single licensing, and a single annual return.
Reducing bureaucratic complexity can encourage greater formal employment and bring more workers under documented, regulated systems.
Implementation Challenges: The Road to Real Impact
While the reforms are visionary, focused and successful implementation will require:
readiness among employers for wage restructuring
increased social security contributions
strong coordination across states
extensive awareness campaigns for informal workers, especially in remote tourism destinations
The true test lies not in the codes themselves, but in how effectively they are executed across India’s varied labour landscape.
A Future Built on Dignity, Security, and Inclusion
The new labour laws offer the hospitality and tourism sector a once-in-a-generation opportunity to reset its foundations. By championing fair wages, social protection, workplace safety, and gender equality, the reforms promise to uplift millions who contribute tirelessly to one of India’s most dynamic industries.
If implemented with consistency and commitment, these codes can usher in a more dignified, secure, and globally competitive future for India’s hospitality workforce, strengthening both the sector’s economic vitality and its human foundation.
(The author is the Principal, IHM, Ranchi)
