India's Labour Codes: A Practical Guide for HR Teams
What the four labour codes mean for wages, social security and compliance — and how to prepare your HR policies.
India's four Labour Codes — on Wages, Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions — consolidate a large number of older central laws. They came into effect in November 2025, with rules and state-level details continuing to be finalised and notified.
This article is a general overview, not legal advice. Check the latest central and Karnataka notifications for your situation.
What changes in principle
- Wages: a uniform definition of wages, with allowances capped as a share of total remuneration for the purposes of statutory calculations. This can affect PF, gratuity and bonus bases.
- Social security: broader coverage, including gig and platform workers, and clearer provisions for fixed-term employees.
- Industrial relations: revised thresholds for retrenchment and closure rules in larger establishments, and updated rules around strikes and standing orders.
- Occupational safety: consolidated rules on safety, working hours, welfare and registration.
Fixed-term employment
Fixed-term employees are recognised with benefits comparable to permanent staff, including statutory benefits and, in many cases, gratuity on a pro-rata basis after a shorter service period. Review your contract templates.
What HR teams should do now
- Re-map salary structures against the wage definition and model the cost impact.
- Update policies and templates — appointment letters, leave, working hours, overtime.
- Review contract workforce arrangements and ensure your suppliers are updating their processes.
- Audit registers and returns to ensure they align with new formats as they are notified.
- Brief managers on changed obligations around hours, overtime and safety.
Do not wait for perfect clarity
Rules are still being refined, but your structures and records can be prepared now. A gap review today avoids a scramble later.
Our statutory compliance team can run a labour-code readiness review and update your documentation and payroll configuration accordingly.
