The Labour Codes are almost a year old. Is your compliance checklist?

On 21 November 2025 the Code on Wages, the Industrial Relations Code, the Code on Social Security and the Occupational Safety, Health and Working Conditions Code came into force together, replacing 29 central labour laws. The Centre notified its final rules under all four Codes on 8 May 2026. An amendment to the Industrial Relations Code in February 2026 confirmed that the Industrial Disputes Act, the Trade Unions Act and the Industrial Employment (Standing Orders) Act stand repealed from the day the Code came into force.

Many companies updated their HR policies when the Codes arrived. Not all have rebuilt the compliance checklist that tells each plant, office and branch what to do, by when and under which provision. A checklist that still cites the Factories Act or the Payment of Wages Act now points at repealed law, and the obligations that replaced them are not always the same.

What the four Codes replaced

Each Code absorbed a group of older Acts, with their definitions, registers, returns and licences:

• Code on Wages, 2019: the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976.
• Industrial Relations Code, 2020: the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act, 1947.
• Code on Social Security, 2020: nine laws, among them the Employees' State Insurance Act, 1948, the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the Maternity Benefit Act, 1961 and the Payment of Gratuity Act, 1972.
• Occupational Safety, Health and Working Conditions Code, 2020: 13 laws, among them the Factories Act, 1948, the Mines Act, 1952, the Contract Labour (Regulation and Abolition) Act, 1970 and the Building and Other Construction Workers Act, 1996, along with the laws on plantations, dock work, migrant workers, working journalists and cine workers.

Where the detail changed

• Wages. Under the Code on Wages and the Code on Social Security, if excluded allowances exceed half of total remuneration, the excess is added back into wages. That moves the base for statutory contributions and gratuity, so pay structures need a fresh test.
• Registration and returns. Where the Centre is the appropriate government, the central rules provide for electronic registration through the Shram Suvidha portal, give already-registered establishments six months to update their particulars, and set an annual return due by the last day of February. The OSH Code sets a uniform threshold of ten employees for registration, with one registration in place of six under the old Acts.
• Appointment letters. The OSH Code makes them mandatory, and existing employees were to receive one within three months of the Code coming into force.
• Fixed-term employees. Gratuity becomes payable after one year of service, not five.
• Thresholds. Standing orders, and prior permission for lay-off, retrenchment and closure, now apply at 300 workers. A factory means 20 or more workers with power, or 40 without, and the contract-labour provisions apply at 50 contract workers.
• Retrenchment. On top of retrenchment compensation, the employer pays 15 days' wages for every retrenched worker into a re-skilling fund.
• Hours and overtime. The OSH Code caps working hours at eight a day, and the OSH (Central) Rules at 48 a week. Overtime needs the worker's consent and is paid at twice the normal rate.
• Gig and platform workers. Aggregators contribute between 1% and 2% of annual turnover to social security, capped at 5% of what they pay those workers, at a rate the Centre notifies.
• Night work for women. Permitted with written consent and safeguards; the central rules require, among other things, pick-up and drop transport, well-lit premises, CCTV on the way to facilities, displayed emergency numbers and compliance with the POSH Act.

Enforcement now starts with a chance to comply

The Codes also change how the State enforces. The Inspector becomes an Inspector-cum-Facilitator, expected to guide employers as well as police them. Under the Code on Social Security, inspections can be scheduled through a randomised, web-based system. Before prosecuting, the Inspector-cum-Facilitator must give the employer a chance to comply: a written direction with a deadline under the Code on Social Security, and 30 days under the OSH Code. Neither Code offers that chance for a repeat violation of the same kind within three years, and the OSH Code also withholds it after an accident. Imprisonment has been replaced by fines for a number of offences.

Many offences can now be compounded. Under the Code on Social Security and the OSH Code, an offence punishable only with a fine can generally be compounded for 50% of the maximum fine, and some offences that also carry imprisonment for 75%; neither Code allows a repeat offence within three years to be compounded. Under the Code on Wages, a first offence that does not carry imprisonment can be compounded, but a repeat offence within five years cannot. Under the Code on Social Security and the OSH Code, compounding fees go to a social security fund for unorganised workers.

The record now matters as much as the fix. Each notice, the response, the date of compliance and any compounding belong in the establishment's file, because a second offence is treated differently from the first. The Code on Social Security allows records, registers and returns to be kept and filed electronically, and the central rules require the annual returns to be filed online.

Wider social security cover

ESIC coverage now applies across India rather than only in notified areas. Establishments with fewer than ten employees may opt in with the consent of employer and employees, coverage is mandatory in hazardous occupations, and it extends to plantation workers. Accidents while commuting between home and work are treated as arising from employment where a link between the accident and the employment is established. On provident fund matters, an EPF inquiry must begin within five years and be completed within two, extendable by one; suo motu reopening has been abolished; and an employer appealing an EPFO order deposits 25% of the assessed amount, against 75% under the old EPF Act, which the tribunal could reduce.

Read the rules, not the headline

Announcements and rules do not always match. The government's November 2025 summary promised a free annual health check-up for workers above 40. The OSH (Central) Rules, as notified, place that duty on employers in dock work and in building and construction, and require annual medical examinations in mines; for factories, the answer depends on the rules each State notifies. Labour is a concurrent subject, and in July 2026 the government told Parliament that most States and Union Territories had finalised, published or pre-published their rules while a few were still in process. A company with sites in several States can face several sets of rules.

A checklist that still cites the Factories Act is pointing at repealed law.

A worked example

Take a hypothetical employee paid ₹50,000 a month: ₹20,000 as basic pay and dearness allowance, and ₹30,000 in allowances that fall outside the definition of wages. The excluded part exceeds half of total remuneration by ₹5,000, so that ₹5,000 is added back, and wages for contributions and gratuity become ₹25,000 rather than ₹20,000. If the same employee is on a fixed-term contract and leaves after 14 months, gratuity is payable. If the factory where the employee works engages 60 contract workers, the contract-labour provisions apply, and if a contractor fails to pay those workers, the company, as principal employer, must pay them. A checklist that still lists the Payment of Wages Act will show none of this.

What to do now

• Re-map every establishment to the Code provisions and to the central or State rules that apply to it, and retire every reference to a repealed Act.
• Re-test pay structures against the 50% wage rule, and recompute contribution and gratuity bases.
• Confirm that registrations were updated, appointment letters issued and annual returns put in the calendar with an owner.
• Track State rules in every State where you operate, with a named owner for each.
• Brief HR, plant and contractor-management teams on the new thresholds and the forms that changed.
• Keep a register of inspection notices, compliance directions and compounded offences for each establishment, so that a repeat offence is never a surprise.
• Check ESIC coverage at every location, including sites outside the areas that were once notified, and review EPF records for the period an inquiry can still reach.