What are the four new labour codes?

The four codes are the Code on Wages, the Code on Social Security, the Industrial Relations Code, and the Occupational Safety, Health and Working Conditions Code. Together they consolidate and replace many older central labour laws. Their goal is to simplify and standardize compliance.

How does the new wage definition affect payroll?

The codes define wages so that excluded allowances cannot exceed fifty percent of total remuneration. This raises the wage base used for provident fund and gratuity, which can increase employer contributions and reduce take-home pay. Employers often need to restructure salary components in response.

What should employers do to prepare?

Employers should run a gap analysis, recompute the wage base, and model the impact on statutory contributions and net pay. Updating employment contracts, leave and working hour policies, and payroll systems ahead of enforcement reduces disruption. Early communication with employees also helps manage the transition.

Free New Labor Codes 2025 Readiness Checklist Checklist

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New Labor Codes 2025 Readiness Checklist

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Employee Headcount:

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Readiness Project Lead:

Code on Wages

Review the new definition of 'wages' under Section 2(y) of the Code on Wages.Restructure CTC and salary components to comply with the 50% wages floor.Prepare for a national floor wage and state minimum wages above the floor.Ensure overtime continues at double the ordinary rate.Update the wage payment timeline to comply with new provisions.

Code on Social Security

Understand the expanded scope of social security coverage.Prepare for revised wage ceilings for EPF and ESI coverage.Plan for Aadhaar-based registration and compliance through a single portal.Review gratuity provisions including eligibility for fixed-term employees.Assess maternity benefit provisions under the Code.

Occupational Safety, Health and Working Conditions Code

Determine if the establishment is covered under the OSH Code.Prepare for a single registration instead of multiple Act-specific registrations.Review and update contract labor compliance provisions.Ensure statutory welfare facilities meet the new Code's requirements.Prepare for annual health examinations for employees in hazardous processes.Update appointment letters for fixed-term employees under the OSH Code.

Industrial Relations Code

Review the revised thresholds for standing orders applicability.Understand new requirements for hire-and-fire with government approval.Prepare for the revised trade union recognition framework.Update the grievance redressal mechanism with the Grievance Redressal Committee.Understand the 14-day strike and lockout notice requirements.Plan for the reskilling fund contribution upon worker retrenchment.

Organizational Readiness and Rollout

Conduct an impact assessment of all four labor codes on current HR policies.Update HRIS and payroll systems to accommodate the new wage definition.Revise employment contracts and offer letters to reflect Code provisions.Train HR, payroll, and compliance teams on the new labor codes.Communicate changes to employees and unions proactively.

The complete guide

Everything you need to know

01What Is the New Labor Codes 2025 Readiness Checklist?

India is consolidating dozens of labour laws into four codes covering wages, social security, industrial relations, and occupational safety. This readiness checklist helps employers prepare for their rollout: reviewing the new statutory definition of wages, restructuring salary components, updating social security and gratuity handling, revising working hour and leave policies, and refreshing employment contracts and registers to match the codes.

02Why Use a New Labor Codes 2025 Readiness Checklist

The codes change how wages are defined, which affects provident fund, gratuity, and take-home pay across your workforce. Waiting until enforcement to react risks payroll disruption and non-compliance. This checklist lets HR and finance model the impact early, especially the requirement that allowances not exceed fifty percent of total remuneration, so you can redesign compensation, update systems, and communicate changes before the codes take effect.

03How to Use This New Labor Codes 2025 Readiness Checklist

Begin with a gap analysis comparing current policies against each of the four codes. Recalculate the wage definition and test whether allowances stay within the fifty percent threshold, then model the effect on PF, gratuity, and net pay. Update contracts, leave rules, working hour limits, and registers. Assign owners and target dates to each item, and revisit as the government notifies implementation dates.

New Labor Codes 2025 Readiness Checklist

New Labor Codes 2025 Readiness Checklist

Code on Wages

Code on Social Security

Occupational Safety, Health and Working Conditions Code

Industrial Relations Code

Organizational Readiness and Rollout

Everything you need to know

01What Is the New Labor Codes 2025 Readiness Checklist?

02Why Use a New Labor Codes 2025 Readiness Checklist

03How to Use This New Labor Codes 2025 Readiness Checklist

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