The New Labour Codes In Practice: A Compliance Roadmap For Employers

1. Introduction

In a landmark move toward reshaping India's employment law framework, the Government of India has officially notified the implementation of all four labour codes through notifications issued on 21 November 2025. These include the Code on Wages, 2019, the Code on Social Security, 2020, the Industrial Relations Code, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020. Together, they replace a fragmented regime of 29 Central labour laws with a unified, structured, and contemporary compliance framework.

Labour law reform in India has been a gradual yet consistent process, driven by the need to keep pace with rapid industrial growth, evolving work environments, and the increasingly dynamic nature of employment relationships. The consolidation of numerous outdated legislations into four streamlined Codes reflects the government's intent to reduce regulatory complexity, facilitate ease of doing business, and reinforce protections relating to wages, social security, safety, and working conditions for workers across sectors.

The reform agenda is anchored in three core objectives. Simplifying compliance by eliminating overlapping provisions under multiple laws, strengthening enforcement by reducing the multiplicity of authorities, and modernising legacy labour statutes that originated in the pre-independence era. With the rollout of the four labour codes, India is poised to usher in a more efficient, business-friendly, and worker-centric labour governance ecosystem.

For employers, it becomes increasingly important to clearly understand their compliance liabilities under the new labour codes and ensure that internal policies, systems, and practices are fully aligned with these updated legal requirements. This article highlights the key compliance obligations under each Code and provides clarity on what organisations must prioritise as they transition to the updated legal framework.

2. Code on Wages, 2019

The Code on Wages marks a major shift in India's labour law regime, creating a unified framework for wage and bonus-related matters that previously fell under multiple laws. It aims to ensure wage security and uniform enforcement across sectors, while simplifying compliance for employers. A central feature of the Code is the mandate that no employee can be paid less than the minimum wage notified by the appropriate government.¹ In addition to the statutory minimum wage, the Code introduces a nationwide floor wage that will act as the lower benchmark for wage fixation, preventing any state from notifying minimum wages below this level.² Wage rates are expected to reflect skill levels, geographical location and working conditions, ensuring that factors such as temperature, humidity or hazardous environments are recognised in wage determination.³

2.1. Equal Remuneration and Non-Discrimination Duties

A significant compliance shift relates to equal remuneration. Employers are barred from discriminating based on gender, including transgender identity⁴, in recruitment, wages and conditions of employment for the same or similar work.⁵ Wage reductions to achieve parity are expressly prohibited. Where an employee performs more than one class of work, wages must correspond to the minimum rate applicable to each category⁶, and if an employee is engaged in piece-work but the minimum wage has been fixed on a time-rate basis instead of a piece-rate basis, the employer must pay wages that are at least equal to the prescribed minimum time rate.⁷

2.2. Wage Periods, Payment Modes, and Settlement Timelines

The Code clearly standardises wage periods and payment timelines. Employers may adopt daily, weekly, fortnightly or monthly wage cycles, but no cycle may exceed one month.⁸ Payments must be made in cash, cheque or electronically, and strict timelines apply.⁹ Daily wage workers must be paid at the end of the shift, weekly wage workers on the last working day, fortnightly wages within two days of the close of the fortnight and monthly wages before the seventh day of the following month. Upon resignation, dismissal, retrenchment or closure of the establishment, the outstanding wages must be settled within two working days.¹⁰ Overtime attracts wages at not less than twice the normal rate.¹¹

2.3. Permissible Deductions

The Code also specifies what constitutes lawful deductions from wages. Deductions from wages can be made only for authorised purposes. These include fines, deductions for absence from duty, and recovery for damage or loss of goods or money caused by the employee's neglect. Employers may deduct charges for house accommodation and approved amenities or services, but only up to the value of what is provided. Recovery of advances of any nature, overpaid wages, loans from labour welfare funds, and house-building or other government-approved loans is also permitted, along with applicable interest. Statutory deductions such as income tax, other government levies, and court-ordered recoveries are allowed. Amounts may be deducted towards provident fund, pension funds, health insurance, or other legally constituted social security schemes and for payments to cooperative societies. With written consent, deductions can be made for trade union membership fees as well as employee contributions to the Prime Minister's National Relief Fund or any other notified fund. Sector-specific deductions for the railways are also recognised, including losses due to counterfeit currency, failure to collect or account for charges, or incorrect rebates granted where the loss is attributable to the employee.¹² Deductions for absence must be proportionate to the period of absence; deductions for damage or loss cannot exceed the actual loss and may only be made after allowing the employee to be heard.¹³

2.4. Fines

Fines can only be levied for specific acts or omissions that the employer has clearly identified in advance and received prior approval for from the appropriate Government. These acts must be publicly displayed at the workplace through a prescribed notice. Before any fine is imposed, the employee must be given a fair opportunity to present their explanation, and the imposition must follow the procedure laid down under the law. The fine amount for any wage period cannot exceed three per cent of the wages payable for that period, and employees below fifteen years of age are fully exempt from fines. A fine is treated as imposed on the very day the related act or omission occurred. Recovery of fines cannot be made through instalments or after ninety days from the imposition. All fines and their utilisation must be recorded in the prescribed register, and the amounts collected can be used only for employee-beneficial purposes approved by the competent authority.¹⁴

2.5. Bonus Entitlements, Disqualifications, and Payment

The Code consolidates bonus-related obligations as well. Every eligible employee who has worked for at least thirty days in an accounting year and earns wages up to the government-notified ceiling is entitled to an annual bonus of at least eight and one-third percent of wages or one hundred rupees, whichever is higher, irrespective of allocable surplus.¹⁵ Employees dismissed for fraud, violence, theft, sabotage or convicted of sexual harassment lose the entitlement.¹⁶ For establishments operating through multiple departments or branches, bonus computation is usually done on an establishment-wide basis unless separate financials are maintained and recognised for that year.¹⁷ Bonus paid in advance, such as puja or customary bonus, may be adjusted against the bonus payable¹⁸, and financial loss caused by misconduct may be recovered from the bonus payable for that year.¹⁹ Bonus must be credited into the employee's bank account within eight months of the close of the accounting year.²⁰

2.6. Records and Registers

Record-keeping obligations are central to compliance. Employers must maintain registers of employees, muster rolls, wages and other prescribed particulars, display notice board information on wage rates, wage periods, payment timelines and Inspector-cum-Facilitator details, and issue wage slips to all employees. Smaller employers with not more than five persons for agricultural or domestic work are partially exempt but must still produce proof of wage payment when asked.²¹

2.7. Penalties and Employer Liability

Strict penalties attach to non-compliance. Paying less than the statutory amount attracts fines up to fifty thousand rupees, and repeat violations within five years may lead to imprisonment up to three months or a higher fine of up to one lakh rupees or both. Breach of other provisions may lead to fines up to twenty thousand rupees, and repeat violations may attract imprisonment up to one month or a fine up to forty thousand rupees or both. Failure to maintain records can invite fines of up to ten thousand rupees.²² Liability for outstanding wage or bonus payments extends to the company, firm, association or any person who is the proprietor of the establishment.²³

3. Code on Social Security, 2020

The Code on Social Security creates a consolidated framework for pensions, provident funds, insurance, gratuity, maternity benefits, workplace accident compensation, and targeted welfare for construction and gig workers. It places clear duties on employers and contractors, and strengthens enforcement to protect workers across the employment lifecycle.

3.1. Provident Fund, Pension, and Insurance Funds

At the core of the Code lies a contributory social protection structure. The Central Government is empowered to establish three statutory funds — a Provident Fund, a Pension Fund and a Deposit Linked Insurance Fund. Employers must contribute ten percent of wages to the Provident Fund for every employee, including those hired through contractors, and employees must contribute an equal amount. Employees may contribute more if they wish, but employers are not obliged to match any amount beyond the mandated ten percent. A defined portion of the employer's contribution, capped at eight and one-third percent of wages or such percentage as the Government may notify, is diverted to the Pension Fund. The Insurance Fund is financed through an employer contribution of up to one percent of wages or another percentage notified by the Government, along with an additional amount not exceeding one-fourth of that contribution to cover administrative expenses of the insurance scheme.²⁴

3.2. Employer Responsibility

Employers remain the primary point of responsibility for funding statutory social security schemes, even when staff are hired through contractors. Contributions payable under any scheme include both the employer's share and the employee's share, together with costs of fund administration. While an employer may recover those sums from a contractor as a debt or by adjusting contractual payments, contractors may recover only the employee's share by deducting it from wages. Under no circumstance may a contractor recover the employer's contribution from the worker's wages.²⁵

3.3. PF Arrangements for Large Establishments

Large establishments employing 100 or more employees may apply for permission to maintain their own provident fund accounts, subject to strict conditions. Such authorisation is discretionary and will be refused or cancelled if the employer has defaulted on contributions or committed offences under the Code in the preceding three years. Where authorised, the employer must maintain the account, file returns, allow inspection, pay administrative charges, and comply with other scheme conditions; failure of which can trigger cancellation after a hearing.²⁶

3.4. Universal Insurance Compliance and Contributions

Insurance is a universal obligation under the Code. Every employee in a covered establishment must be insured in the prescribed manner, with contributions remitted to the Corporation at rates notified by the Central Government. Contributions are payable for each wage period, ordinarily due on the last day of that period²⁷, and the employer is responsible for remitting both shares to the Corporation and for the expense of remittance. Deductions from wages are limited to the employee's contribution for the relevant period only, and any sum so deducted is treated as entrusted to the employer for payment to the Corporation.²⁸

3.5. Employment Injury and Occupational Disease

The Code adopts an employee-friendly approach to workplace injury. In the absence of contrary evidence, any accident arising in the course of employment is presumed to have arisen out of employment. This presumption covers rescue efforts at the workplace, commuting incidents where a nexus to employment exists, and travel in vehicles provided by or arranged with the employer, provided the vehicle is not ordinary public transport.²⁹ Accidents remain compensable even if the employee acted contrary to any provision of law or the employer's instructions, so long as the act was connected with the employer's business.³⁰ Occupational diseases listed in the schedules are treated as employment injuries if contracted under the specified conditions, while other diseases are compensable only if directly attributable to a specific employment injury.³¹

3.6. Failure to Insure or Contribution Defaults

If an employer fails to insure a worker in time, insures after an accident, or defaults on contributions resulting in loss or reduced benefits for the worker, the Corporation may pay the benefit to the employee and recover the capitalised value from the employer after affording a hearing.³² The Corporation may also claim extra sickness expenditure from owners or occupiers where high sickness incidence is attributable to insanitary conditions.³³

3.7. Gratuity

Gratuity remains a core retirement benefit under the Code. Employees who complete five years of continuous service are entitled on termination to gratuity, payable on superannuation, retirement, resignation, death, disablement, expiry of a fixed term, or other notified events. Working journalists have a three-year qualifying period.³⁴ Gratuity is calculated at a rate equivalent to fifteen days' wages per completed year or part thereof in excess of six months, subject to any number of days notified by the Central Government.³⁵ Specific provisions govern piece-rated, seasonal, fixed-term term and disabled employees, and gratuity may be paid on a pro rata basis when applicable. Gratuity may be forfeited wholly or partially for acts causing damage to employer property, riotous conduct, violence or offences involving moral turpitude committed in the course of employment.³⁶ Employers must determine the gratuity amount as soon as it becomes payable, notify the competent authority and the claimant, and pay the amount within thirty days. Delays attract simple interest at notified rates unless the delay is attributable to the employee and authorised by the competent authority.³⁷ Employers will, from a notified date, also be required to obtain insurance for gratuity liabilities.³⁸

3.8. Maternity Benefits

Maternity benefits are strengthened and clarified. Women who have worked at least eighty days in the twelve months preceding expected delivery are entitled to paid maternity leave, calculated at the average daily wage, for up to twenty-six weeks, of which not more than eight weeks may precede delivery. Women with two or more surviving children are entitled to twelve weeks, with up to six weeks before delivery. Adoptive and commissioning mothers are entitled to twelve weeks from the date the child is handed over.³⁹ Employers must permit leave once notice is given and pay the pre-delivery portion in advance on production of prescribed proof, with the balance payable within forty-eight hours of proof of delivery.⁴⁰ However, the absence of a notice does not affect her entitlement if she otherwise meets eligibility requirements.⁴¹ In the event of the death of a woman entitled to maternity benefit, the employer shall pay the amount to her nominee, or if no nominee exists, to her legal representative.⁴² If the woman dies during the maternity benefit period, the benefit remains payable up to the date of her death, and if she dies after delivery, leaving the child behind, the benefit is payable for the full eligible duration, though if the child also dies during that period, payment is due only up to the date of the child's death.⁴³ A medical bonus of 3500 rupees is payable where the employer does not provide free prenatal confinement and postnatal care.⁴⁴

On request, a pregnant woman cannot be given work that is physically strenuous or otherwise harmful to her health or pregnancy during the medically protected period, and employers are prohibited from knowingly engaging a woman for work in the six weeks immediately following her delivery, miscarriage, or medical termination of pregnancy. Where the role permits, she may also be allowed to work from home after availing maternity benefits, based on mutually agreed terms between the employer and the employee.⁴⁵ Special paid leave is available after miscarriage and medical termination of pregnancy, for tubectomy, and for illness arising from pregnancy up to specified periods.⁴⁶ New mothers must be allowed two nursing breaks each working day until the child is fifteen months old.⁴⁷

Employers cannot make any deductions from the normal daily wages of a woman entitled to maternity benefits on account of the nature of work assigned to her or due to nursing breaks.⁴⁸ Employers are required to exhibit in a conspicuous place in every part of the establishment where women are employed an abstract of the provisions of this Chapter and related rules in the local language⁴⁹, and every establishment with fifty employees or such number as may be notified by the Central Government must provide a crèche facility within the prescribed distance, either independently or through a common crèche arrangement, allowing women four visits per day including rest intervals.⁵⁰ Establishments must also inform every woman in writing and electronically at the time of her initial appointment of all benefits available to her.⁵¹ It is also unlawful to discharge or dismiss a woman for availing maternity leave or vary her service conditions to her disadvantage, subject only to specified exceptions for gross misconduct, with a right of appeal to the competent authority.⁵²

3.9. Accident Reporting and Compensation

Employers must report serious workplace accidents promptly. Where law requires reporting of workplace deaths or injuries, a detailed report must be sent to the competent authority within seven days.⁵³ Compensation is payable where injury arises out of and in the course of employment, subject to narrow exceptions such as minor injuries not resulting in disablement beyond three days, or injuries caused by the employee being under the influence of drink or drugs, wilful disobedience of safety orders, or deliberate disabling of safety devices.⁵⁴ Compensation covers death and disablement, and specified occupational diseases are treated as accidents for compensation purposes where the statutory criteria are met.

3.10. Compensation Computation and Deposit

Compensation amounts are formulaic and practicable. For death, the employer must pay fifty percent of the deceased employee's monthly wages multiplied by the relevant factor or an amount notified by the Central Government, whichever is higher. Permanent total disablement attracts sixty percent of monthly wages multiplied by the relevant factor or the notified amount, and permanent partial disablement is compensated either according to specified percentages in the schedule or proportionately to assessed loss of earning capacity. Temporary disablement generates half-monthly payments equal to twenty five percent of monthly wages. In addition to compensation, in the event of death, the employer must deposit at least fifteen thousand rupees or a state-specified sum with the competent authority towards funeral expenses.⁵⁵ Compensation must be paid as soon as it falls due, and where liability is disputed, the employer must make provisional payments corresponding to admitted liability without prejudice to further claims.⁵⁶ Payments in death cases or lump sum settlements are to be deposited with the competent authority, although employers may advance up to three months' wages to dependants, which can be adjusted against the final compensation, and any direct payment made by an employer to dependents is not treated as payment of compensation.⁵⁷

3.11. Contractor Work and Indemnity

Where employers contract out work, they remain liable for compensation to workers engaged in those contracts as if the worker were in their direct employment. Employers who pay compensation under these provisions can be indemnified by the contractor, and those indemnity disputes may be settled by the competent authority.⁵⁸ Likewise, where compensation has been paid by one person, and another is legally liable to pay damages, the payer may seek indemnity from the person legally liable.⁵⁹

3.12. Construction Worker Welfare Cess

The Code also creates a mechanism to levy a cess for the welfare of building and other construction workers, set between one and two percent of the construction cost, excluding land cost and statutory compensation.⁶⁰ Late payments attract interest, and unpaid amounts can be assessed and penalised up to the amount of the cess after affording a hearing.⁶¹

3.13. Records and Registers

Record keeping and transparency are major compliance pillars. Employers must maintain prescribed registers and records, electronically or otherwise, capturing days worked, hours, wages, leave, overtime, employee identity numbers, accidents and compensation paid, statutory deductions, cess details, workforce counts, recruitment, occupational data and vacancies. Employers must display prescribed notices at workplaces, issue wage slips, and file returns in the prescribed manner.⁶²

3.14. Offenses and Penalties

The Code expressly prevents employers from reducing wages or the overall benefits of employees merely because of liability to pay contributions or charges under the Code.⁶³

Enforcement has been made stringent with specified penalties. Failure to pay contributions attracts imprisonment of up to three years, and where the employer has deducted the employee's contribution but failed to remit it, imprisonment must not be less than one year, together with a fine of one lakh rupees. Other breaches, such as obstructing officials, failing to submit returns, reducing wages, failing to pay compensation or maternity benefits, failing to produce registers, or failing to pay cess, attract fines up to fifty thousand rupees and, in some cases, imprisonment up to six months. Repeat convictions attract heavier penalties.⁶⁴ A second or subsequent conviction generally carries imprisonment up to two years and a fine of two lakh rupees. Where the repeat offence concerns failure to pay contributions, charges, cess, maternity benefit, gratuity or compensation, imprisonment for repeat offenders may extend up to three years, but not be less than two years, and is also accompanied by a fine of three lakh rupees.⁶⁵

4. Industrial Relations Code, 2020

The Industrial Relations Code introduces a comprehensive framework for maintaining harmonious relationships between employers and workers across industrial establishments. It places a clear emphasis on collaboration, dispute resolution, transparency, and fairness in workplace management.

4.1. Works Committee

Industrial establishments with one hundred or more workers can be directed by the appropriate Government through a general or special order to constitute a Works Committee consisting of representatives of the employer and the workers. The composition of this Committee must ensure that the number of worker representatives is not less than the number of employer representatives. The worker representatives are to be selected from among the workers of the establishment in consultation with any registered Trade Union operating therein. The primary role of the Works Committee is to secure and preserve harmonious relations between employers and workers by discussing matters of common interest and attempting to resolve material differences of opinion.⁶⁶

4.2. Grievance Redressal Committee

Every industrial establishment employing twenty or more workers must establish a Grievance Redressal Committee for resolving individual worker disputes. This Committee must consist of an equal number of representatives of employers and workers, and the chairpersonship must alternate annually between the two sides. Membership cannot exceed ten persons, and representation of women workers must be maintained at a level not less than their proportion in the overall workforce. Any aggrieved worker may file an application before the Committee within one year from the date on which the cause of action arises. Proceedings are intended to be completed within thirty days. Any dispute arising from the discharge, dismissal, retrenchment, or termination of an individual worker is treated as an industrial dispute even if no other workers or any Trade Union is party to that dispute.⁶⁷

4.3. Trade Union Registration

Provisions regarding trade unions require that any seven or more members of a Trade Union may apply for registration by subscribing their names to the rules of the Union and complying with the registration requirements of the Code. A Trade Union of workers cannot be registered unless at least ten percent of the workers or one hundred workers, whichever is less, employed in the establishment or industry are members of that Union on the date of the application. Once registered, the Union must continuously maintain membership of not less than ten percent of the workers or one hundred workers, whichever is less, subject to a minimum of seven members connected with that establishment or industry.⁶⁸

4.4. Standing Orders

The provisions relating to standing orders apply to industrial establishments employing three hundred or more workers at present or on any day in the preceding twelve months.⁶⁹ Standing orders must cover all matters listed in the First Schedule of the Code, including worker classification categories, work hours and holidays, shift working, attendance and late coming, leave procedures, requirements relating to entry gates and search, temporary stoppages of work and rights and liabilities arising from them, rules on termination of employment and notice, misconduct and disciplinary action, and mechanisms for redressal against unfair treatment.

Employers are required to prepare draft standing orders within six months of the Code becoming applicable, and such drafts must be based on the model standing orders issued under the Code. While drafting, employers may incorporate additional provisions that suit the nature of their establishment, provided these do not conflict with the Code and still cover all matters listed in the First Schedule. Employers must consult the Trade Union or the recognised negotiating representatives of the establishment before submitting the draft standing orders to the certifying officer. If the employer adopts the Central Government model standing orders, such adoption is treated as certification, although the certifying officer may direct amendments if necessary. Employers must submit drafts of any modifications required in the standing order within six months from the date on which the provisions of the Code become applicable. Once certified, standing orders cannot be modified for six months unless the employer and the workers or their representative body reach a mutually agreed modification. After that period, employers, workers, or Trade Unions may apply to the certifying officer for modification of standing orders and must submit copies of the proposed amendments and, where applicable, the certified copy of the agreement supporting such amendment.⁷⁰

4.5. Service Conditions

Employers cannot alter service conditions relating to matters listed in the Third Schedule without prior notice to affected workers. Any proposed change must be communicated in the prescribed manner, and it cannot take effect until twenty-one days from the date the notice is issued. This notice requirement does not apply when the change flows from a settlement or award, where workers are governed by central civil service rules or other notified regulations, in urgent situations requiring adjustments in shift patterns in consultation with the Grievance Redressal Committee, or where the change is mandated by government directions.⁷¹

4.6. Subsistence Allowance During Suspension

During the period where a worker is placed under suspension pending investigation or disciplinary inquiry, the employer is liable to pay him a subsistence allowance, at the rate of fifty percent of the last drawn wages for the first ninety days, and seventy five percent thereafter, as long as any delay in completing the proceedings is not caused by the worker.⁷²

4.7. Wages Pending Judicial Challenge to Reinstatement

In situations where a Tribunal or National Industrial Tribunal orders reinstatement and the employer challenges the award before the High Court or Supreme Court, the employer must continue to pay the worker full last drawn wages, including any admissible maintenance allowance, for the duration of the court proceedings, provided the worker is not employed elsewhere and submits an affidavit confirming the same. If the court determines that the worker was gainfully employed during the period, wages for that duration do not become payable.⁷³

4.8. Strikes and Lockouts

Workers are prohibited from going on strike without following statutory timelines and procedural requirements. A strike is unlawful if undertaken without issuing a notice within sixty days preceding the strike, if initiated within fourteen days of the notice, before the date specified in the notice, during or shortly after conciliation, arbitration, or Tribunal proceedings, or while a settlement or award remains in force on the matters covered. The same timelines and limitations apply to employers proposing a lockout.⁷⁴ Any strike or lockout that violates these procedural safeguards is categorized as illegal, and knowingly spending or applying money to support an illegal strike or lockout is also prohibited.⁷⁵ However, a strike does not become illegal merely because it continues during pending adjudication, if it was valid at the time it commenced, and a lockout declared in response to an illegal strike or a strike declared in response to an illegal lockout is not automatically illegal.⁷⁶

4.9. Lay-Off Compensation

A worker with at least one year of continuous service who is laid off is entitled to layoff compensation equal to fifty percent of basic wages and dearness allowance for all days of lay off, excluding weekly holidays. No compensation is payable beyond forty-five days in twelve months if there is an agreement to that effect, and after that point, the employer is permitted to retrench the worker in accordance with statutory retrenchment provisions, with any prior layoff compensation adjusted against retrenchment dues.⁷⁷ Lay-off compensation provisions do not apply to seasonal establishments or where fewer than fifty workers were employed in the establishment in the preceding calendar month, or where Chapter X applies.⁷⁸

4.10. Muster Roll Requirement

Employers are also required to maintain a muster roll to allow workers who report at the appointed time to mark their attendance.⁷⁹

4.11. Retrenchment

Retrenchment requires compliance with three mandatory safeguards: one month's written notice specifying the reasons for retrenchment or wages instead of such notice, retrenchment compensation equal to fifteen days' average pay for every completed year of continuous service or any notified equivalent, including parts of a year exceeding six months, and intimation to the appropriate government or notified authority in the prescribed manner.⁸⁰ Where workers belong to a category, and retrenchment is unavoidable, the principle of “last in, first out” ordinarily applies unless the employer records reasons for deviating from it.⁸¹ If the employer hires again within one year of retrenchment, retrenched Indian workers must be given the first right of re-employment, with preference over new applicants.⁸²

4.12. Closure

For closure of an undertaking, the employer must provide at least sixty days' written notice to the appropriate government stating the reasons for closure, except where fewer than fifty workers are employed or where the undertaking is engaged in construction activities such as roads, bridges, or dams.⁸³ On closure, workers with at least one year of continuous service are entitled to notice and compensation as if they had been retrenched, unless the closure is due to unavoidable circumstances beyond the employer's control, in which case compensation is capped at three months' average pay. In the mining sector, if closure is caused only due to exhaustion of minerals and workers are provided uninterrupted alternative employment within twenty kilometres at the same remuneration and service terms, compensation under retrenchment provisions does not arise.⁸⁴

4.13. Unfair Labour Practices

The Industrial Relations Code expressly prohibits employers, workers, and trade unions from engaging in any unfair labour practice as listed in the Second Schedule. In the context of employers, unfair practices typically include obstructing or intimidating workers from forming or joining trade unions, taking retaliatory action against union supporters, or granting selective benefits to weaken unionisation efforts. Interference in the functioning of trade unions, including sponsoring employer-controlled unions, showing preferential treatment to one union over another, or discouraging membership through discrimination in promotions, transfers, posting, or disciplinary action, also qualifies as misconduct. Other activities such as dismissing workers in bad faith, transferring them with malice, replacing regular work with contract labour to break a strike, recruiting during a legal strike, refusing to implement settlements or awards, declining to negotiate in good faith with the recognised union, and continuing an illegal lock-out are likewise treated as unfair practices under the Code.⁸⁵

4.14. Offenses and Penalties

The Code prescribes strict penalties for violations of its provisions. For instance, engaging in any unfair labour practice can result in a monetary penalty starting from ten thousand rupees and extending up to two lakh rupees. If the same offence is repeated after conviction, the consequences become significantly harsher, with fines ranging from fifty thousand rupees to five lakh rupees or imprisonment for a term of up to three months or, in some cases, both.⁸⁶

5. Occupational Safety, Health, and Working Conditions Code, 2020

The Occupational Safety, Health and Working Conditions Code, 2020, aims to consolidate and modernise India's labour laws relating to workplace safety, health standards and employee welfare. The Code places primary responsibility on employers to create safe, healthy and humane working environments across factories, mines, docks, construction sites and all other notified establishments. The legislation outlines obligations from the point an establishment is set up, during the course of its operations and even at its closure, ensuring accountability for employee wellbeing throughout the lifecycle of a business.

5.1. Registration, Changes, and Closure Reporting

To begin with, the Code requires that every establishment covered under its scope must register itself with the designated registering officer. Any employer of an establishment that comes into existence after the commencement of the Code must apply for registration electronically within sixty days of applicability. Further, if there are changes in particulars such as ownership or management after registration, these must be intimated electronically to the registering officer within thirty days, following which the registration certificate is amended. Closure of an establishment must also be reported within thirty days, along with certification that all dues have been paid to employees.⁸⁷

5.2. Commencement and Cessation Notice

Before commencing operations, no factory, mine, establishment involving contract labour or building and construction work can start any trade, business or occupation without electronically notifying the prescribed authority in the manner and timeline laid down by the appropriate Government. Cessation of operations must also be reported in the same manner.⁸⁸

5.3. Employer Duties

One of the central pillars of the Code is the duties of employers towards employees. Every employer must ensure that the workplace is free from hazards likely to cause injury or occupational disease and must comply with prescribed occupational safety and health standards. Employers are required to provide annual health examinations to specified categories of workers free of cost, maintain an environment that is safe and without risk to health, ensure proper disposal of hazardous and toxic waste, including e-waste, and issue appointment letters to all employees in the prescribed form. Employers cannot levy charges on workers for safety and health-related measures and must safeguard not only employees but all persons on the premises. In factories, mines, docks, plantations and construction activities, additional responsibilities include maintaining safe machinery and systems of work, safe handling and transport of substances, adequate information and training, safe access and exit routes and welfare arrangements required to maintain a healthy working environment.⁸⁹

5.4. Accident, Dangerous Occurrence, and Occupational Disease Reporting

If an accident results in death or in an injury that prevents the worker from working for forty-eight hours or more, or if the accident falls under the category prescribed by the Government, a notice must be sent to the prescribed authorities within the specified time.⁹⁰ Any dangerous occurrence, even without injury, must also be reported.⁹¹ Where a worker contracts a disease listed in the Third Schedule, employers are required to notify authorities within the prescribed timeline.⁹²

5.5. Workplace Health and Safety Conditions

Employee working conditions and workplace infrastructure play a major role in the Code. The Code also mandates employers to maintain health, safety and working conditions prescribed by the Central Government. These include cleanliness and hygiene, ventilation and temperature control, dust and fume-free environments, safe humidity levels, potable drinking water, prevention of overcrowding, adequate lighting, separate sanitation facilities for male, female and transgender employees, and effective waste treatment systems. More provisions can be prescribed as required.⁹³

5.6. Welfare Facilities

The employers' responsibilities also include providing welfare facilities such as washing rooms, bathing places and locker rooms for male, female and transgender workers separately, storage and drying space for clothing, sitting arrangements for employees who work standing, canteen facilities for establishments with one hundred or more employees, periodic medical examination for mine workers, readily accessible first aid, and any other welfare measure necessary for a decent standard of life. Additional measures could include ambulance rooms in establishments with more than five hundred workers, protective amenities for motor transport workers, rest rooms and lunch rooms in factories and mines employing more than fifty workers, appointment of welfare officers in establishments with two hundred and fifty or more workers and temporary living accommodations for building workers where required. The Code also provides for establishment-based or common crèche facilities for children below six years in organisations employing more than fifty workers.⁹⁴

5.7. Working Hours and Overtime

The Code further regulates working hours. No worker should be made to work for more than eight hours a day, and working hours, including breaks and spread over, are determined by the appropriate Government.⁹⁵ Work is restricted to six days a week,⁹⁶ and overtime is required to be paid at twice the wage rate. Overtime can only be done with the worker's consent and is subject to a limit prescribed by the Government.⁹⁷ Overlapping shifts with more than one relay of workers doing the same work at the same time are prohibited unless a written exemption is granted.⁹⁸

5.8. Notices of Work Periods and Annual Leave

Every establishment must display a notice of work periods showing clear timings each day and inform the Inspector cum Facilitator before any change is made.⁹⁹ Workers are entitled to annual leave with wages if they have worked at least one hundred and eighty days in a calendar year. Leave entitlement is calculated based on days worked and varies for adolescents and mine workers. Unavailed leave can be carried forward subject to a limit of 30 days, but refused leave can be carried forward without limit. The worker is also entitled, on demand, to encash their leave at the end of the calendar year. Furthermore, if the total leave carried forward exceeds thirty days, the worker shall have the right to encash the excess leave.¹⁰⁰

5.9. Records and Registers

Employers are also required to maintain prescribed registers, either electronically or in physical form, in the prescribed manner, containing details of the workers, including the work performed, normal daily working hours, weekly rest days, wages paid along with receipts, leave and leave wages, overtime, attendance, records of dangerous occurrences, and employment of adolescent workers. The employer must also display notices at the workplace in the prescribed form and manner, provide wage slips to workers electronically or otherwise, and submit returns to the Inspector-cum-Facilitator, either electronically or in physical form, as per the prescribed procedures and timelines set by the appropriate Government.¹⁰¹

5.10. Women's Safety

The Code also ensures gender equity as women are entitled to work in all establishments for all types of work and may work between 6 a.m. and 7 p.m. with their consent, subject to safety measures. Where work is considered hazardous for women, employers must first introduce adequate safeguards before employing them.¹⁰²

5.11. Contract Labour

The Code introduces comprehensive protections for contract labour. It applies to establishments and contractors employing fifty or more contract workers¹⁰³. All welfare facilities mentioned under Sections 23 and 24 must also be provided to contract labour by the principal employer.¹⁰⁴ If a contractor required to obtain a licence fails to do so, such engagement of contract labour is automatically deemed illegal.¹⁰⁵ Contractors must pay wages to contract labour within the prescribed period and through bank or electronic transfer, and must inform the principal employer electronically of payments made. If the contractor fails to pay wages or makes short payments, the principal employer becomes liable to pay the full dues and later recover the amount from the contractor.¹⁰⁶ The Code prohibits contract labour in core activities except where the activity is ordinarily outsourced, does not require full-time workers or involves a sudden increase in workload for a temporary period.¹⁰⁷

5.12. Inter-State Migrant Workers

The Code also contains special provisions for interstate migrant workers. It applies to every establishment employing ten or more interstate migrant labourers on any day of the preceding twelve months.¹⁰⁸ Employers or contractors must ensure suitable working conditions in view of the fact that such workers are working outside their home State, report fatal accidents or serious injuries to the authorities of both States and provide interstate migrant workers with the same social security benefits available to other workers in the establishment, including ESIC, EPF and other applicable laws.¹⁰⁹ The employer must also pay interstate migrant workers a yearly lump sum amount for to and fro travel, payable once per year.¹¹⁰

5.13. Offenses and Penalties

Contravention of the provisions of the code can subject the employer or principal employer, as applicable, to a penalty not less than two lakh rupees and up to three lakh rupees. Further, if the violation continues even after conviction, an additional penalty of up to two thousand rupees per day will apply for every day the contravention continues.¹¹¹

6. Conclusion

The implementation of the four labour codes represents a transformative step toward a unified and future-ready regulatory structure for employment in India. While the reforms bring welcome clarity and consolidation, they also create a significant transition phase for businesses. Employers must proactively assess the impact of the changes on their workforce, operational systems, and statutory obligations. Updating employment contracts, HR manuals, payroll systems, workplace safety practices, and record maintenance procedures will be essential to avoid compliance gaps.

As enforcement begins to align with the new regime, organisations that take a structured and timely approach will be better positioned to mitigate risks and manage inspections effectively. The Codes ultimately aim to strike a balance between worker welfare and business efficiency, and with proper implementation, they can contribute to a more productive and secure work environment across sectors.

By understanding the compliance requirements outlined in this article and preparing well in advance, employers can ensure a smooth transition and uphold the spirit of the reform, enabling both regulatory adherence and operational resilience going forward.

Footnotes

1. The Code on Wages, No. 29 of 2019, § 5 (India).

2. Id. § 9.

3. Id. § 6(6).

4. Press Information Bureau, Gov't of India, India's Labour Reforms: Simplification, Security, and Sustainable Growth (Nov. 21, 2025), https://www.pib.gov.in/PressNoteDetails.aspx?ModuleId=3&NoteId=156140&id=156140.

5. The Code on Wages, No. 29 of 2019, § 3 (India).

6. Id. § 11.

7. Id. § 12.

8. Id. § 16.

9. Id. § 15.

10. Id. § 17.

11. Id. § 14.

12. Id. § 18.

13. Id. § 21.

14. Id. § 19.

15. Id. § 26.

16. Id. § 29.

17. Id. § 30.

18. Id. § 37.

19. Id. § 38.

20. Id. § 39.

21. Id. § 50.

22. Id. § 54.

23. Id. § 43.

24. The Code on Social Security, No. 36 of 2020, § 16 (India).

25. Id. § 17.

26. Id. § 21.

27. Id. § 29(4).

28. Id. § 31(4).

29. Id. § 34.

30. Id. § 35.

31. Id. § 36.

32. Id. § 42.

33. Id. § 43.

34. Id. § 53(1).

35. Id. § 53(2).

36. Id. § 52(6).

37. Id. § 56.

38. Id. § 57.

39. Id. § 60.

40. Id. § 62.

41. Id. § 62(6).

42. Id. § 63.

43. Id. § 60.

44. Id. § 64.

45. Id. § 59.

46. Id. § 65.

47. Id. § 66.

48. Id. § 69.

49. Id. § 71.

50. Id. § 67.

51. Id. § 67.

52. Id. § 68.

53. Id. § 73.

54. Id. § 74.

55. Id. § 76.

56. Id. § 77.

57. Id. § 81.

58. Id. § 85.

59. Id. § 86.

60. Id. § 100.

61. Id. § 103.

62. Id. § 123.

63. Id. § 124.

64. Id. § 133.

65. Id. § 134.

66. The Industrial Relations Code, No. 35 of 2020, § 3 (India).

67. Id. § 4.

68. Id. § 6.

69. Id. § 28.

70. Id. § 35.

71. Id. § 40.

72. Id. § 38.

73. Id. § 56.

74. Id. § 62.

75. Id. § 64.

76. Id. § 63.

77. Id. § 67.

78. Id. § 65.

79. Id. § 68.

80. Id. § 70.

81. Id. § 71.

82. Id. § 72.

83. Id. § 74.

84. Id. § 75.

85. Id. § 84.

86. Id. § 86.

87. Occupational Safety, Health and Working Conditions Code, No. 37 of 2020, § 3 (India).

88. Id. § 5.

89. Id. § 6.

90. Id. § 10.

91. Id. § 11.

92. Id. § 12.

93. Id. § 23.

94. Id. § 24.

95. Id. § 25.

96. Id. § 26.

97. Id. § 27.

98. Id. § 29.

99. Id. § 31.

100. Id. § 32.

101. Id. § 33.

102. Id. § 43.

103. Id. § 45.

104. Id. § 53.

105. Id. § 54.

106. Id. § 55.

107. Id. § 57.

108. Id. § 59.

109. Id. § 60.

110. Id. § 61.

111. Id. § 94.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.