Future of work: India’s youth under the new Codes

India’s Labour Codes came into force in November 2025, marking the most significant labour law reform since Independence. By consolidating 29 central laws into four Codes, the reform aims to simplify compliance, universalise minimum wages, expand social protection, and modernise workplace regulation. Policy debates often portray the Codes as a balancing act between labour flexibility and worker protection.

Prior to the consolidation, India’s labour regime was fragmented across multiple Central and State laws governing wages, industrial relations, social security, and working conditions. With labour on the Concurrent List, this resulted in uneven enforcement and wide inter-State variation. Crucially, most protections applied only to the formal sector, leaving informal, contract, and casual workers, who form the bulk of the workforce, outside the scope of regulation. Against this backdrop, the government introduced four Labour Codes between 2019 and 2020.

In 2024, India’s median age was under 30, compared to around 40 in China and 50 in Japan. With nearly half the population still young, understanding how these changes affect youth employment is critical.

Despite its demographic advantage, India faces a pronounced youth employment crisis. According to the Periodic Labour Force Survey (PLFS) 2023-24, labour force participation among those aged 15-29 stood at 46.5%, far below the 76.4% observed among those aged 30-59. Youth unemployment is 10.2%, compared to less than 1% for older adults.

Gender disparities further widen these gaps. Only 28.8% of young women participate in the labour force, compared to 63.5% of young men. In urban areas, unemployment among young women reached 20.1%.

Across all PLFS rounds, young workers are more likely than adults to be unpaid family workers within self-employment. They are disproportionately concentrated in informal employment. In 2023-24, nearly 90% of young workers were informally employed. Even within regular salaried jobs, 60.5% of young regular workers lacked social security, compared to 50.5% among workers above 30.

Contractual insecurity is also higher among youth. In 2023-24, 66.1% of young regular workers had no written contract, versus 53.6% for older ones. Only 16.5% of young workers had long-term contracts exceeding three years, compared to 35.4% among adults.

Young workers are also overrepresented in platform-based gig work. A NITI Aayog estimate suggests that 77 lakh workers were engaged in the gig economy in 2020-21, a figure projected to rise to 2.35 crore by 2029-30.

Against this backdrop, the new Labour Codes aim to promote formalisation while improving the ease of doing business. The introduction of a statutory national floor wage could raise earnings for young workers clustered in low-paid, entry-level jobs. If firms increasingly rely on fixed-term contracts, the Codes mandate parity in wages and benefits with permanent workers.

The requirement of appointment letters for all workers and guaranteed wage payments, even during leave, strengthens baseline employment security. The Code on Social Security extends welfare schemes covering health, maternity, disability, education, and skill development to unorganised workers. Gig and platform workers are explicitly recognised in national law, with provisions for registration from age 16 and the creation of National and State Social Security Boards. Unlike the earlier Unorganised Workers’ Social Security Act (2008), which had limited impact, the new Code offers clearer institutional mechanisms.

Labour market transparency is also enhanced through mandatory vacancy reporting to career centres. The Industrial Relations Code further affects youth employment by reducing hiring frictions through a higher retrenchment threshold. It provides legal clarity for contract labour and fixed-term employment categories dominated by young workers while extending benefits such as leave, health cover, social security, and gratuity to fixed-term employees after just one year of service.

However, several challenges remain. Many provisions for unorganised and gig workers mirror those under the 2008 Act, including a size-based definition of enterprises with fewer than 10 workers. PLFS 2023-24 shows that 42.7% of young workers lack written contracts, and nearly one-fifth of them work in enterprises with more than 10 workers, leaving significant gaps in coverage. Discretionary language in provisions for gig workers and weak statistical definitions of digital platform employment complicate coverage, especially given widespread multiple job-holding. Despite the Second National Commission on Labour having urged the government as early as 2002 to modernise labour protections in response to technological change and evolving work arrangements, two decades later, policy follow-through and statistical innovation have been slow.

These gaps point to an urgent need for stronger labour data systems and proactive worker registration. Identifying gig and platform workers in national surveys, instead of subsuming them under broad self-employment categories, would strengthen policy design and protection.

Devika Vinod is a Research Associate at CAFRAL. Meenakshi Shekhar, Ph.D is a Research Director at CAFRAL.

Published – February 01, 2026 07:00 am IST