The Government of India has introduced the New 4 Labour Codes to make labour laws simpler, more transparent, and easier for companies to follow. These new laws combine 29 old labour laws into 4 major codes.
For employers, HR teams, and corporate compliance departments, understanding these codes is important to stay legally compliant and avoid penalties.
The Four New Labour Codes
The four new Labour Codes aim to bring transparency, uniformity, and efficiency into India’s labour regulation framework. These codes focus on:
- Ease of compliance for employers
- Better social security and protection for workers
- Formalization of the workforce
- Stronger workplace safety and welfare systems
The four new labour codes are:
- Code on Wages, 2019
- Code on Social Security, 2020
- Industrial Relations Code, 2020
- Occupational Safety, Health & Working Conditions (OSHWC) Code, 2020
These codes bring uniform rules, digital systems, and clearer responsibilities for both employers and employees.
1. Code on Wages, 2019
The Code on Wages covers everything related to minimum wages, salary payments, bonus, and equal pay.
What This Code Means for Employers
- A single, standard definition of “wages” for all laws
- Minimum wages apply to all employees in all sectors
- Salaries must be paid on time every month
- Employees must receive equal pay for equal work
- Clear rules for bonus and salary deductions
This code may require companies to restructure CTC, update payroll systems, and review PF/ESIC calculations.
2. Code on Social Security, 2020
This code covers EPF, ESIC, Gratuity, Maternity Benefit, and other social security schemes.
Key Points
- Gig workers and platform workers are now covered under social security
- Fixed-term employees get gratuity without a 5-year rule
- PF and ESIC registration becomes fully digital
- Every employee must be registered under social security
What Employers Need to Do
- Ensure all employees are registered
- Deposit PF and ESIC contributions on time
- Maintain proper digital records
3. Industrial Relations Code, 2020
This code focuses on improving workplace relations and reducing industrial disputes.
Important Features
- Standing Orders mandatory only if 300 or more workers
- Fixed-term employment is officially recognised
- Faster dispute resolution through Industrial Tribunals
- Clear rules for strikes and lockouts
Impact on Companies
- More flexibility in hiring
- Better clarity during disputes
- Reduced compliance restrictions for smaller establishments
4. Occupational Safety, Health & Working Conditions (OSHWC) Code, 2020
This code aims to improve employee safety, working conditions, and welfare standards at workplaces.
Highlights
- Mandatory safety and health measures
- Clear rules for working hours and overtime
- Facilities like drinking water, crèche, restrooms, first aid
- Single licence for factories, contract labour & migrant workers
- Digital inspections and online compliance filings
Employer Responsibilities
- Maintain safe workplace conditions
- Provide welfare facilities
- Keep digital registers and follow inspection rules
How the 4 Labour Codes Benefit Employers
- Simpler compliance system
- One definition of wages across all laws
- Reduced paperwork and inspections
- Faster resolution of disputes
- Easier digital processes
- More flexibility in managing the workforce
Challenges for Companies
Even though the labour codes make processes easier, companies still need to:
- Update HR policies & employee handbooks
- Restructure salary components as per new wage definition
- Train HR, payroll, and compliance staff
- Convert physical registers into digital formats
How Corporates Should Prepare
To be ready for the new labour codes, businesses should:
1. Review Salary Structures
Ensure compliance with the “wage” definition to avoid penalties.
2. Update HR Policies
Working hours, leaves, overtime, and contract labour rules need changes.
3. Train Teams
Make sure HR, payroll, and compliance staff understand the new requirements.
4. Conduct a Labour Compliance Audit
Identify compliance gaps and prepare for smooth implementation.
India’s labour law landscape is undergoing one of the biggest transformations in decades. The Government of India has consolidated 29 existing labour laws into 4 major Labour Codes to simplify compliance, improve worker welfare, and promote ease of doing business. These codes are expected to dramatically reshape HR, payroll, safety standards, and workforce management across all industries.
