On 21 November 2025, the Government of India implemented four comprehensive Labour Codes — Code on Wages, Industrial Relations Code, Code on Social Security, and Occupational Safety, Health and Working Conditions Code — replacing 29 existing central labour laws with a unified framework. These reforms mark one of the most significant overhauls of the Indian labour law system in decades, aimed at simplifying compliance, expanding worker protections, and promoting formal employment.
Why the New Labour Codes Matter
The older landscape of labour laws in India included numerous, overlapping regulations enforced separately by state and central authorities, making compliance complex for employers. The new Labour Codes simplify this structure under four modern, harmonized statutes, while strengthening worker rights across sectors.
Key Compliance Changes for Employers
1. Unified Legal Framework
All labour regulations are now consolidated into four codes:
Code on Wages, 2019
Industrial Relations Code, 2020
Code on Social Security, 2020
Occupational Safety, Health and Working Conditions Code, 2020
These codes together replace 29 older central laws and set a single set of standards nationwide.
2. Formalisation and Documentation
Employers must issue mandatory appointment letters to all workers, improving transparency and formal employment documentation.
3. Expanded Social Security Coverage
Under the Code on Social Security:
PF, ESI and other social security benefits cover a broader range of workers, including those in previously excluded sectors.
4. Minimum Wage for All Workers
The Code on Wages guarantees a statutory minimum wage for all workers regardless of sector or geography.
A National Floor Wage ensures a baseline standard no worker can be paid below.
5. Timely and Structured Wage Payments
Timely wage payment is now mandatory. For example, in IT and ITES sectors, salaries must be released by the 7th of every month.
6. Health, Safety and Working Conditions
Employers must provide free annual health check-ups for workers above 40, promoting preventive healthcare.
The OSH Code introduces standardized safety requirements, committees, and training protocols across workplaces.
7. Women’s Workforce Participation
Women can work night shifts and in all job roles with appropriate safety measures.
Equal pay for equal work is mandatory.
The definition of family and dependent benefits has been expanded.
8. Simplified Compliance Burden
Employers now follow single registration, single license, and single return processes, reducing administrative workload across labour compliance.
What Employers Should Do
✔ Review salary and wage structures to align with the new definitions (e.g., ensure statutory components such as minimum wages, PF and ESI calculations are compliant).
✔ Ensure internal policies are updated for workplace safety standards, gender equality practices, and documentation norms.
Bottom Line
The new Labour Codes are designed to benefit both workers and employers — increasing clarity, coverage, and consistency across employment laws while reducing compliance complexity. For payroll teams, this means a transition to modern calculation logic, clear statutory definitions, and updated wage reporting practices.