The indian government’s new labour codes, effective November 21, 2025, are bringing major reforms to gratuity, provident fund (PF), and employee benefits. Here’s a breakdown of what has changed and who benefits the most.

1️⃣ Gratuity Now After Just 1 Year of Service

· Earlier, employees were eligible for gratuity only after 5 years of continuous service.

· New rule: Even employees completing 1 year of service can now claim gratuity.

· This benefits short-term or contract workers and ensures faster access to earned benefits.

2️⃣ Provident Fund (PF) Contribution Changes

· Employer and employee contributions to PF accounts remain, but new codes allow flexibility in withdrawal rules for emergencies.

· Certain categories of workers, especially in small firms or temporary jobs, gain faster access to funds without waiting for full tenure.

3️⃣ Who Will Benefit the Most?

· Short-term employees – contract workers and those changing jobs frequently

· Young professionals – who may leave a company within a few years

· Women re-entering workforce – can claim gratuity even if tenure is under 5 years

· Workers in small-scale industries – previously, many could not access benefits early

4️⃣ Other Key Labour Code Reforms

· Simplified compliance for employers, reducing paperwork.

· Strengthened social security coverage for all employees, including unorganized sector workers.

· Enhanced clarity on termination benefits, PF, and gratuity calculations.

5️⃣ Tips for Employees

· Check your employment contract to see how new rules apply.

· Maintain updated records of PF contributions and salary slips.

· Ask your HR about gratuity eligibility under the new code.

· Plan your financial and retirement goals based on faster access to benefits.

✅ Takeaway

The new labour codes make social security more accessible, particularly for short-term, contract, and young employees. Early gratuity and flexible PF withdrawals are major wins for workers, while businesses benefit from simplified compliance rules.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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Kokila Chokkanathan

26/11/2025 11:30 AM