New Labour Codes: Key Work-From-Home and Overtime Rules Every Employee Should Understand
India’s new Labour Codes, which officially came into force on 21 November, have introduced several major changes affecting employees and companies across the country. One of the most significant updates relates to the growing demand for flexible work, especially work from home (WFH). The new laws also revise overtime rules, expand ESIC benefits, and mandate free medical checkups for employees above 40. Together, these changes aim to modernise the work ecosystem and strengthen employee welfare.
WFH Gets Formal Recognition Under the New Labour Codes
The COVID-19 pandemic reshaped global work culture and made remote work a mainstream concept. While many sectors have returned to office-based operations, several industries—particularly IT, services and digital businesses—continue to offer work-from-home opportunities due to lower operational costs and increased productivity.
For the first time, the New Labour Codes formally recognise Work From Home.
Key WFH Provisions
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WFH is now legally permitted specifically for the service sector.
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A written agreement between the employer and the employee is mandatory.
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Women on maternity leave can also opt to work from home if mutually agreed upon.
By giving WFH official status, the new rules offer job security to employees who operate remotely and remove ambiguity regarding their employment terms.
Overtime Limits Removed; Compensation Rules Strengthened
The new Labour Codes have also made major reforms to overtime regulations. Earlier, there was a strict limit of 75 hours of overtime per quarter, which often restricted employees seeking additional income and employers looking for flexible scheduling.
What’s New in Overtime Rules?
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Employees working beyond scheduled hours must be paid overtime.
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Overtime wages will be paid at twice the normal wage rate.
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The previous 75-hour quarterly limit has been removed.
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State governments now hold the power to define the maximum overtime limit in their jurisdiction.
Experts believe that the updated rules will particularly help workers looking to earn more through extra hours and give employers greater flexibility during peak workload periods.
Free Annual Medical Checkup for Employees Above 40
In a move focused on preventive healthcare, the government has mandated that companies provide one free health checkup every year to employees aged 40 years and above.
Why This Matters?
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Encourages early detection of health issues
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Promotes preventive care in workplaces
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Brings uniformity, as many companies offered this benefit but not all
With age-related lifestyle diseases rising, the new rule is expected to significantly boost employee well-being.
ESIC Coverage Expanded Across India
Another major reform under the new Labour Codes is the nationwide expansion of ESIC (Employees' State Insurance Corporation) coverage.
Major ESIC Changes
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ESIC will no longer be limited to notified areas; it will apply across the country.
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Coverage now includes plantations, small units, hazardous occupations, and other high-risk sectors.
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Gig workers will also receive improved protections, especially regarding workplace accidents.
A crucial addition is that accidents occurring during commute—from home to workplace and back—will now be classified as employment-related accidents. This means eligible employees can claim compensation under ESIC rules.
A More Secure Future for India’s Workforce
The New Labour Codes aim to balance flexible work arrangements with strong employee protection. By formally recognising WFH, revising overtime rules, expanding ESIC benefits, and mandating annual health checks, the reforms address modern workplace needs while prioritising worker welfare.
These changes are expected to have a significant impact across IT services, gig work, manufacturing, retail, and several other industries. As companies adapt to the new framework, employees will likely benefit from clearer rules, increased safety nets, and enhanced work-life flexibility.
