Contractors & audits
Labour Codes advisory services
The four Labour Codes replaced 29 central labour laws on 21 November 2025, with new penalties. We move your wage structure, contracts and HR policies across before a wage claim or inspection does it for you.
- Wage structures under the 50% rule
- Penalty exposure mapped and closed
- PF, gratuity and bonus impact
- State rules tracked as notified
The four Codes
Which old laws each Code replaced
All four Codes took effect on 21 November 2025. Central rules under each were notified on 8 May 2026, and the states are still notifying theirs. The fourth Code's full name is the Occupational Safety, Health and Working Conditions Code, 2020.
29→4
central labour laws, brought into 4 Labour Codes
Code on Wages, 2019
- Payment of Wages Act, 1936
- Minimum Wages Act, 1948
- Payment of Bonus Act, 1965
- Equal Remuneration Act, 1976
Industrial Relations Code, 2020
- Trade Unions Act, 1926
- Industrial Employment (Standing Orders) Act, 1946
- Industrial Disputes Act, 1947
Code on Social Security, 2020
- Employees' Compensation Act, 1923
- Employees' State Insurance Act, 1948
- Employees' Provident Funds and Miscellaneous Provisions Act, 1952
- Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
- Maternity Benefit Act, 1961
- Payment of Gratuity Act, 1972
- Cine-Workers Welfare Fund Act, 1981
- Building and Other Construction Workers' Welfare Cess Act, 1996
- Unorganised Workers' Social Security Act, 2008
OSH Code, 2020
- Factories Act, 1948
- Plantations Labour Act, 1951
- Mines Act, 1952
- Working Journalists and Other Newspaper Employees (Conditions of Service and Miscellaneous Provisions) Act, 1955
- Working Journalists (Fixation of Rates of Wages) Act, 1958
- Motor Transport Workers Act, 1961
- Beedi and Cigar Workers (Conditions of Employment) Act, 1966
- Contract Labour (Regulation and Abolition) Act, 1970
- Sales Promotion Employees (Conditions of Service) Act, 1976
- Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
- Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
- Dock Workers (Safety, Health and Welfare) Act, 1986
- Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
Grouping as published by the Press Information Bureau for the Ministry of Labour & Employment on 21 November 2025. Rules under each Code are framed by the Centre and by each state, so the detail can differ from state to state.
The cost of non-compliance
What the Codes charge for getting it wrong
The Codes replaced old penalties with new ones, most of them higher. These are the figures behind the changes we plan with you.
Exposure under the law
Source
Up to 10×
the claim, as compensation
01Wages below the new definition
Paying less than due under the Code on Wages carries a fine of up to ₹50,000, and a wage claim can bring compensation of up to ten times the amount found due.
Code on Wages, 2019, s.54(1)(a) and s.45(2)
₹1–10 lakh
per contravention
02Lay-off, retrenchment or closure without permission
Where the Code requires government permission, acting without it carries this fine. A repeat can bring ₹5 lakh to ₹20 lakh or six months' imprisonment.
Industrial Relations Code, 2020, s.86(1) and (2)
₹50,000–2 lakh
plus ₹2,000 a day
03Standing orders not submitted
For an employer who fails to submit draft standing orders, or changes them outside the Code's procedure.
Industrial Relations Code, s.86(10)
Up to 1 year
or a ₹50,000 fine
04Gratuity not paid
Failing to pay gratuity an employee is entitled to, including a fixed-term employee under the new rules.
Code on Social Security, 2020, s.133(ii)
₹2–3 lakh
plus up to ₹2,000 a day
05Any other OSH contravention
The general penalty for a contravention of the OSH Code, its rules or an order, payable by the employer or principal employer.
OSH Code, 2020, s.94
Why NK One
Every filing, zero penalties.
Every change the Codes require of your wage structure, contracts, policies and filings is planned and completed on time, state by state, with a partner on the file.
Zero-penalty guarantee
No late fees, no interest, no surprise demands on anything we file for you. Every due date is tracked by people who have done this for 20 years.
Direct partner access
Since 2007, clients speak to the partners who run NK One, not a new compliance executive learning on your account.
By the numbers
What the Codes cut from the rulebook
The Ministry of Labour & Employment's own count, comparing the 29 earlier laws with the four Codes. Less paperwork does not settle the harder questions: the wage definition, the gratuity base and each state's rules still have to be worked out for your organisation.
- Rules
- 351down from 1,436
- Counted across the four Codes, against the rules framed under the 29 laws they replaced.
- Forms
- 73down from 181
- Fewer forms to file and keep, with compounding and improvement notices introduced for the first time.
- Registers
- 8down from 84
- The registers an establishment has to maintain. The Code on Social Security also requires records, registers and returns to be kept electronically.
- Returns
- 1electronic return, in place of 31
- Eight separate registrations, under laws such as the Factories, Contract Labour, ESI and EPF Acts, become one. Four licences become a single licence.
Before and after
What changes for employers
Six changes that reach payroll and HR first. Rules, and some limits, vary by state, so check your state's position before acting on any one of them.
Where to start
Four areas to review first
These are the areas most employers have to act on early. They are not the whole list: what applies to you depends on your industry, workforce and the state rules in force where you operate.
The wage structure
Of the four Codes, the Code on Wages moves salary cost fastest. Check how far your excluded allowances run above half of total pay, and what the excess adds to PF, gratuity and bonus.
Appointment letters
The OSH Code requires an appointment letter for every employee, setting out the job, the wages and social security. Older letter formats need to be revised.
Contract labour
Engaging contract labour now has to fit the OSH Code, including its approach to core and non-core activities. If a contractor fails to pay wages, the principal employer has to pay them.
Gig and platform workers
The Code on Social Security covers gig and platform workers for the first time. Aggregators contribute 1 to 2% of annual turnover, capped at 5% of what they pay these workers.
Scope of service
Our advisory work, in four parts
From reading your documents against the Codes to the roll-out across every location.
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Policy and contract review
Your documents, read against the Codes and the notified rules.
- HR policies, handbooks and employment letters audited in detail
- The effect of the Codes on existing contracts and practices
- A compliance report on alignment with the notified rules, and the amendments needed
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Wage structuring
Where the Code on Wages costs money.
- Financial effect of the revised wage definition on your pay structure
- PF, gratuity and bonus impact, component by component, including exclusions
- Remedial steps that reduce the cost and stay within the law
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Transition and roll-out
From the gap analysis to the new framework in use.
- Compliance gaps found during the move to the Codes
- An implementation roadmap for your organisation
- Payroll, compliance and HR processes aligned
- Clear, compliant communication to employees
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State-wise applicability
For organisations with more than one location or entity.
- Applicability tracked from draft rules, notifications and timelines in each state
- Consistent treatment across locations, entities and employee categories
FAQ
Questions about Labour Codes advisory
Can't find your answer? Ask us on WhatsApp and we'll reply within 2 working hours.
What are India's four Labour Codes?
The Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020. Together they replace 29 central labour laws. All four took effect on 21 November 2025.
Are the Labour Code rules fully in force?
The Codes took effect on 21 November 2025, and central rules under all four were notified on 8 May 2026. States notify their own rules separately, and several are still doing so. The position can therefore differ from one state to the next.
How does the Code on Wages affect salary structures?
It sets one definition of wages across India. The listed exclusions cannot exceed 50% of total remuneration, and anything above that is added back to wages for statutory purposes. PF, gratuity and bonus are worked out on that figure, so many salary structures need review.
How do the Labour Codes change gratuity?
Gratuity is now worked out on the revised wage definition, including the 50% limit on exclusions. Where basic pay and DA are a small share of salary, the gratuity base and the employer's liability can rise. Fixed-term employees qualify after one year of service under the contract, instead of five years.
What does the Industrial Relations Code change for employers?
It covers union recognition, retrenchment, lay-offs, strikes and the settling of disputes. Standing orders now apply from 300 workers instead of 100. The limit for government approval of lay-off, retrenchment and closure has also risen from 100 to 300 workers, and states can raise it further.
What changes for contract labour under the OSH Code?
The contract labour provisions apply from 20 contract workers, as under the Contract Labour (Regulation and Abolition) Act. A contractor can hold an all-India licence valid for five years in place of a licence for each work order. The principal employer must provide welfare facilities to contract workers and pay their wages if the contractor does not.
What does a Labour Codes consultant do for us?
We interpret the Code requirements that apply to you, audit your HR policies and contracts, and run a gap analysis. We then build an implementation roadmap, covering wage restructuring, appointment letters, standing orders and contract labour where relevant. For our fee, send us an enquiry with your locations and headcount.
Related
Related services
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EPF and ESI codes, UAN and IP numbers, monthly statutory challans, returns and payments.
Payroll services
Payroll processing for varied pay structures, with ESI, PF, PT, LWF, bonus and gratuity compliance.
Compliance risk audits
Labour law compliance due diligence and gap assessments of your processes and your vendors' processes.
Enquiry
Talk to a compliance expert
Share your states and headcount, and we will get back to you within 2 working hours.
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