India is consolidating a tangle of old labour laws into four labour codes — covering wages, social security, industrial relations, and occupational safety. For employers, this is one of the biggest workforce-compliance shifts in decades.
What the codes cover
- Code on Wages: a uniform definition of wages, timely payment, minimum wages.
- Social Security Code: PF, ESI, gratuity and benefits, potentially extended to more workers.
- Industrial Relations Code: rules on hiring, standing orders and disputes.
- OSH Code: working conditions, safety and welfare.
What changes for employers
A key change is the uniform definition of "wages", which affects how PF, gratuity and other contributions are calculated, often increasing them. Employers should review their salary structures in advance.
How to prepare
- Review and, if needed, restructure salary components.
- Reassess PF/ESI/gratuity provisioning.
- Update employment contracts and policies.
- Keep an eye on notified effective dates.
The exact rollout and rules are set by notification, so confirm current applicability for your state and workforce. But the direction is clear — start reviewing your payroll and contracts now so you're not caught out when the codes take full effect.
Get started with Govyapar →
This article is for general information based on rules current at the time of writing and is not professional advice. Rules change — confirm specifics with a Govyapar expert before acting.
← Back to all articles