Employer compliance · Four Labour Codes · Central sphere

Four Labour Codes 2026: Employer Compliance Guide and Checklist

The labour statute an employer complies with changed on 21 November 2025. Twenty-nine central laws became four Codes, and every threshold, register, deadline and permission an Indian employer relied on now has a new section number and, in several cases, a new figure. This guide sets out what the Codes require, cited to the enacted text, for establishments whose appropriate Government is the Central Government.

First question: which provisions reach your establishment?

The Codes do not switch on at a single headcount. Each obligation carries its own threshold, several count “workers” rather than employees, and some run only where the appropriate Government has issued an order. The table below is the map a compliance review starts from.

The word that matters most in that table is worker. Section 2(zr) of the Industrial Relations Code excludes anyone employed mainly in a managerial or administrative capacity, and any supervisor drawing more than eighteen thousand rupees a month or such amount as the Central Government notifies. A company that counts its whole payroll against the three-hundred figure in sections 28 and 77 will often reach a threshold the Code does not actually apply to it — or, less comfortably, miss one it does.

The Code on Wages, 2019: pay, deductions, bonus and records

No employer may pay less than the minimum rate of wages the appropriate Government notifies (section 5), and there is to be no discrimination on the ground of gender in wages for the same or similar work, nor on the ground of sex in recruitment (section 3). The employer fixes a wage period of not more than a month (section 16) and pays by a fixed deadline for that period — before the seventh day of the following month for monthly wages (section 17(1)). An employee who is removed, dismissed, retrenched, resigns or loses employment on closure must be paid within two working days (section 17(2)).

Deductions are permitted only for the purposes section 18(2) lists — fines, absence, damage or loss directly attributable to the employee’s neglect, housing and authorised amenities, advances and loans, statutory levies and court orders, social-security contributions, co-operative dues, and trade-union fees with written authorisation — and the total in any wage period may not exceed fifty per cent of the wages (section 18(3)). Overtime is paid at not less than twice the normal rate for every hour or part of an hour beyond the normal working day (section 14). Every employee within the notified wage ceiling who has worked at least thirty days in the accounting year receives an annual minimum bonus of eight and one-third per cent of wages or one hundred rupees, whichever is higher, whether or not there is allocable surplus; where surplus allows, bonus rises in proportion to wages up to a maximum of twenty per cent (section 26(1), (3)). Section 50 requires a register of persons employed, muster roll and wages, a notice-board abstract with category-wise wage rates, the wage period, the day, date and time of payment and the Inspector-cum-Facilitator’s name and address, and wage slips to every employee.

The OSH Code, 2020: registration, duties, welfare and contract labour

Registration and the employer’s statutory duties

An establishment to which the Code applies that comes into existence after commencement must apply electronically for registration within sixty days (section 3(1)); a late application may be entertained on a prescribed late fee, and if the registering officer neither registers nor entertains it within the prescribed period the establishment is deemed registered and the certificate auto-generated (section 3(3)). Changes in ownership, management or registered particulars are intimated within thirty days (section 3(4)). Section 6(1) then lists what every employer owes: a workplace free from hazards likely to cause injury or occupational disease, compliance with the declared standards, a free annual health examination for the prescribed classes of employees, and a letter of appointment to every employee — with a three-month window from commencement for anyone who did not already hold one.

Accidents, safety committees and welfare

An accident that causes death, or an injury that keeps the person from working for forty-eight hours or more, or that is of a prescribed nature, must be notified (section 10(1)). The appropriate Government may by order require a Safety Committee with at least as many worker representatives as employer representatives (section 22(1)); safety officers are mandatory in a factory of five hundred or more workers, a hazardous-process factory or construction work of two hundred and fifty or more, and a mine of one hundred or more (section 22(2)). Welfare facilities under section 24 include separate washing and bathing places, locker rooms, sitting arrangements, first-aid, and a canteen where one hundred or more workers including contract labour are ordinarily employed; the Central Government may prescribe an ambulance room above five hundred workers, rest rooms and a lunch room above fifty in a factory or mine, a welfare officer at two hundred and fifty in a factory, mine or plantation, and a crèche where more than fifty workers are ordinarily employed, which may be a common or pooled facility. Women are entitled to be employed in all establishments for all types of work, and before 6 a.m. or after 7 p.m. with their consent, subject to the prescribed conditions (section 43).

Contract labour and inter-State migrant workers

The contract-labour Part applies from fifty contract labour on any day of the preceding twelve months (section 45), and a contractor to whom it applies needs a licence (section 47), obtainable as a common licence covering a factory, beedi and cigar premises and contract labour together (section 119). The contractor pays wages by bank transfer or electronic mode and informs the principal employer (section 55(2)); if the contractor fails or short-pays, the principal employer is liable for the wages and recovers them from the contractor (section 55(3)). Where ten or more inter-State migrant workers are employed, the employer pays each a yearly lump-sum journey allowance for travel to and from the native place (sections 59, 61). Section 33 closes the chapter with the register, notice, wage-slip and return obligations.

The Industrial Relations Code, 2020: committees, standing orders, retrenchment and closure

Committees and union recognition

Every industrial establishment with twenty or more workers must have one or more Grievance Redressal Committees of equal employer and worker members, not more than ten in all, with the chair alternating yearly and women represented at least in proportion to their share of the workforce; a worker may apply within one year of the cause of action, and the Committee may complete its proceedings within thirty days (section 4). At one hundred or more workers the appropriate Government may order a Works Committee (section 3). Where one registered trade union functions, the employer recognises it as sole negotiating union; where several do, the union supported by fifty-one per cent of workers on the muster roll is recognised, and failing that a negotiating council is constituted of unions with at least twenty per cent support, one representative per twenty per cent; recognition runs for three years, extendable by agreement to five in total (section 14).

Standing orders and notice of change

Chapter IV applies at three hundred or more workers (section 28(1)). The employer prepares draft standing orders within six months of the Code’s commencement, based on the model standing orders and covering every matter in the First Schedule (section 30(1)). No change in a Third Schedule condition of service may be effected without notice to the workers affected, or within twenty-one days of that notice (section 40).

Two regimes for lay-off, retrenchment and closure

Below three hundred workers, Chapter IX applies. Its lay-off compensation and retrenchment conditions (sections 67 to 69) reach establishments of fifty or more workers on an average per working day in the preceding calendar month (section 65): a laid-off worker with a year’s service is paid fifty per cent of basic wages and dearness allowance (section 67), and a worker with a year’s service may be retrenched only after one month’s notice or wages in lieu, fifteen days’ average pay for every completed year or part beyond six months, and notice to the appropriate Government (section 70). Closing an undertaking of fifty or more workers requires sixty days’ notice to the appropriate Government stating the reasons (section 74).

From three hundred workers on an average per working day in the preceding twelve months — or a higher figure the appropriate Government notifies — Chapter X applies (section 77). Lay-off then needs the Government’s prior permission save for shortage of power, natural calamity and, in a mine, fire, flood, gas or explosion (section 78); retrenchment needs three months’ notice and prior permission (section 79); and closure needs an application for prior permission at least ninety days ahead, with a copy served on the workers’ representatives (section 80). In either regime, the employer contributes fifteen days’ wages last drawn, for every retrenched worker, to the worker re-skilling fund (section 83(2)(a)).

The Code on Social Security, 2020: provident fund, ESI and gratuity

Applicability sits in the First Schedule: provident fund from twenty employees, ESI from ten persons (a notified hazardous occupation from a single employee), gratuity in every factory, mine, oilfield, plantation, port and railway company and in shops and establishments of ten or more. The employer’s provident-fund contribution is ten per cent of wages, matched by the employee, who may contribute more without raising the employer’s share; for establishments the Central Government notifies, twelve per cent is substituted for ten at both places (section 16(1)(a)). The employer pays both the employer’s and the employee’s ESI contribution for every employee, whether directly employed or through a contractor (section 31(1)). Gratuity is payable on termination after five years’ continuous service — on superannuation, retirement or resignation, death or disablement, expiry of a fixed-term contract, or a notified event — and the five-year condition falls away for death, disablement and fixed-term expiry (section 53(1)); it is computed at fifteen days’ wages for every completed year or part beyond six months (section 53(2)). Section 164 repeals the nine predecessor Acts, from the Employee’s Compensation Act, 1923 to the Unorganised Workers’ Social Security Act, 2008.

The employer’s compliance checklist

Grouped by when the duty arises, with the provision that creates it. Matters left to rules are marked as such in the text above.

Where employers get caught

• Counting employees instead of workers. Section 2(zr) of the IR Code is the gate to sections 28 and 77. The count is made on workers, on the averaging basis each section states, not on the HR headcount.
• The appointment-letter window has closed. Section 6(1)(f) of the OSH Code gave three months from commencement to issue letters to employees who lacked one. An establishment that has not done so is already in default.
• The Grievance Redressal Committee starts at twenty. Section 4 is not a large-factory provision; a twenty-worker unit needs a constituted committee with the prescribed composition.
• Contractor default lands on the principal employer. Section 55(3) makes the principal employer liable for unpaid or short-paid contract-labour wages first and leaves it to recover from the contractor afterwards.
• Fixed-term gratuity. The second proviso to section 53(1) of the Code on Social Security removes the five-year condition on expiry of fixed-term employment. Contracts and exit computations written on the old assumption are wrong.
• One commencement date does not fit every provision. The 19 December 2025 corrigendum shows the Ministry itself correcting the commencement schedule; a compliance calendar must carry a date per provision.

How the firm works with employers on the Codes

Our advocates map the Codes to the establishment first — which thresholds are crossed, on which counting basis, from which date — and only then draft: standing orders on the model orders, the Grievance Redressal Committee’s constitution, appointment letters and contract-labour agreements that allocate section 55 risk, retrenchment and closure applications under Chapters IX and X, and the registers and notices sections 33 and 50 require. The same team handles the workplace obligations that sit beside the Codes — the POSH Act Internal Committee and annual report, POSH training, and employment and commercial contracts — and can act as fractional general counsel where an in-house function is not yet justified.

Frequently asked questions