Expert Advisory

India's New Labour Codes —
decoded.

The most significant overhaul in India's labour history is here. We provide expert advisory to ensure your transition is seamless and risk-free.

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Important Advisory — Updated 16 May 2026: While the New Labour Codes are operational, several states are still finalising their corresponding rules. The existing central rules under repealed acts continue to apply in such states under the Repeal and Savings provisions. LegitEdge monitors all state-level notifications in real time.

The Four Codes

Understanding the new framework

29 central labour laws consolidated into 4 comprehensive codes. Here's what changed and what it means for you.

Wages & Remuneration

Code on Wages, 2019

Universal minimum wage floor across all sectors
Revised definition of "wages" impacts PF, gratuity, bonus calculations
Timely payment obligations with digitisation mandate
Floor wage concept introduces state-level nuances

Impact: High — affects every employer's payroll and PF contributions significantly.

PF, ESI & Gratuity

Code on Social Security, 2020

Expanded ESI coverage to all establishments with 10+ workers
Gratuity eligibility extended to fixed-term contract employees
Gig and platform workers now eligible for social security
ESIC coverage expansion to new geographies

Impact: High — impacts gig economy employers and expands compliance scope significantly.

Workplace Safety & Conditions

Code on Occupational Safety, Health & Working Conditions, 2020

Single unified OSH framework replaces 13 existing acts
Annual health checkups mandatory for workers above 45
Work hours limited to 12 per day with weekly 48-hour cap
Inter-state migrant worker protections enhanced

Impact: Medium-High — particularly for manufacturing, construction and IT/ITeS sectors.

Employment & Industrial Relations

Code on Industrial Relations, 2020

Standing Orders threshold raised to 300+ workers
Retrenchment/closure permission threshold raised to 300+ workers
Fixed-term employment formalised across all sectors
Two-week strike notice period now mandatory

Impact: High — fundamentally changes hire-fire flexibility and industrial dispute resolution.

FAQs

Common questions answered

Are the New Labour Codes already in effect?

Yes. The four New Labour Codes came into effect from 21 November 2025 following Presidential assent and central notification. However, several states are still in the process of notifying their corresponding state rules.

Do the old labour laws still apply?

As of the implementation date, the New Labour Codes replace 29 central labour laws. However, under the "Repeal and Savings" provisions, existing rules, forms, and registers continue to apply until new state rules are notified.

What is the biggest payroll impact of the new Wage Code?

The revised definition of "wages" — which must constitute at least 50% of CTC — directly increases PF, Gratuity, and Bonus computation bases, leading to higher employer contributions.

How can LegitEdge help with Labour Code transition?

We offer a dedicated Labour Code Transition Assessment — reviewing your current structures, modelling the financial impact, and building a phased implementation roadmap tailored to your workforce.

Need a personalised Labour Code assessment?

Our experts will model the financial and operational impact for your specific workforce and industry.

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India's New Labour Codes —decoded.