India
Code on Wages
Impact date: 21 November 2025 The Code on Wages consolidates four wage-related laws into a single framework, introducing a uniform definition of wages across all four labor codes. It establishes a national floor wage, ensuring states cannot prescribe wages below this level, and requires equal pay for equal work irrespective of gender. The Code also standardizes provisions for the timely payment of wages and prescribes issuance of appointment letters to all employees. By simplifying compliance and reducing ambiguity, it aims to create transparency and fairness in wage practices while promoting ease of doing business.
Employer implications/action needed Employers should assess their payroll systems in view of the new wage definition, which may increase statutory contributions/payments. Employers should further ensure compliance with the national floor wage (one notified), equal pay requirements and timing of the payment of wages ( within two days of exit), as well as reviewing onboarding processes to issue appointment letters to all employees.
Employer risk Non-compliance risks include penalties and disputes over wage calculations. Penalties have been substantially increased and range from INR 50,000 to INR 100,000 and also include imprisonment of up to three months, depending on the nature of offence.
Code on Social Security
Impact date: 21 November 2025 This Code integrates multiple social security laws to create a comprehensive framework covering employees, gig workers, and platform workers. It governs access to provident fund (a mandatory, government-managed retirement savings scheme), maternity benefits, and Employees’ State Insurance Corporation (ESIC) schemes (which provide comprehensive social security and health insurance), ensuring broader protection for employees. In a significant change, the Code also provides for gratuity entitlement to fixed-term employees at the time of cessation of their term even if they do not complete the eligibility tenure of five years. The Code introduces mechanisms for platform companies (aggregators) to contribute towards social security for gig and platform workers, reflecting the evolving nature of work. By consolidating provisions and extending coverage, it aims to provide inclusive social protection and improve compliance efficiency across sectors.
Employer implications/action needed Employers should assess their workforce framework to ensure compliance with expanded coverage.
Employer risk Financial implications include higher employer contributions and administrative adjustments. Failure to comply could lead to penalties and reputational risks. Penalties have been substantially increased and range from INR 50,000 to INR 100,000 and also include imprisonment of up to three years, depending on the nature of offence.
Industrial Relations Code
Impact date: 21 November 2025 The Industrial Relations Code streamlines laws governing trade unions, strikes, and industrial disputes. It introduces recognition criteria for unions, prescribes stricter strike procedures, and formalizes dispute resolution mechanisms. The Code makes it mandatory to have a grievance redressal committee consisting of employer and employee representatives. The decision of the committee shall be made on the basis of the majority view, provided more than half of the members representing the workers have agreed to such a decision. These changes aim to balance flexibility for employers with stronger worker protections, reduce industrial disputes, and foster a more predictable and harmonious work environment.
Employer implications/action needed Companies should review contracts and union agreements to ensure compliance.
Employer risk Risks include operational disruption and increased litigation around union negotiations. A failure to comply can result in penalties of up to INR 100,000 for the first instance, and include imprisonment up to three months, depending on the type of offence. Continued or repeated violations after conviction may attract additional fines and/or criminal sanctions.
Occupational Safety, Health and Working Conditions Code
Impact date: 21 November 2025 This Code consolidates health, safety, and welfare regulations into a unified framework. It mandates regular health check-ups, prescribes working hour limits, and allows women to work in night sifts with prescribed safeguards. The Code also simplifies registration and compliance processes while ensuring adequate facilities for workers. By harmonizing safety standards and promoting welfare measures, it seeks to create safer and healthier workplaces across industries, enhancing employee well-being and operational efficiency. The Code prohibits contract labor in the core activities of their establishment except under specific exemptions.
Employer implications/action needed Employers should update workplace safety policies and workforce models, implement welfare measures, and ensure compliance with statutory standards, and assess engagement on contract labor framework.
Employer risk Risks include penalties for non-compliance and liability for workplace accidents.
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