The four Codes and what they replaced
All four took effect on 21 November 2025, replacing 29 central laws. The Central Government published draft rules under each Code on 30 December 2025; states make their own rules for matters in their field. Until a rule under the Codes applies to you, keep using the forms and registers your authority currently accepts.
| Code | Main laws it replaced |
|---|---|
| Code on Wages, 2019 | Minimum Wages Act, Payment of Wages Act, Payment of Bonus Act, Equal Remuneration Act |
| Industrial Relations Code, 2020 | Industrial Disputes Act, Trade Unions Act, Industrial Employment (Standing Orders) Act |
| Code on Social Security, 2020 | EPF & MP Act, ESI Act, Payment of Gratuity Act, Maternity Benefit Act, Employees’ Compensation Act and five others |
| Occupational Safety, Health and Working Conditions Code, 2020 | Factories Act, Contract Labour Act, Inter-State Migrant Workmen Act and ten other laws on working conditions |
The changes an employer has to act on
| Change | What it means | Code |
|---|---|---|
| One definition of wages | Basic + DA + retaining allowance; if excluded allowances exceed 50% of pay, the excess counts as wages. Drives PF, gratuity and bonus. Details | Wages |
| Pay on time | Monthly wages by the 7th of the next month; on exit, the full and final settlement within two working days | Wages |
| Deductions capped | Total deductions in a wage period cannot exceed 50% of wages | Wages |
| National floor wage | The Centre sets a floor, varying by region; no state minimum wage may be below it | Wages |
| Appointment letters | Every employee gets one in the prescribed form | OSH |
| Working hours | 8 hours a day with a spread-over of up to 12 hours; overtime at twice the ordinary rate | OSH |
| Women at night | May work before 6 am and after 7 pm with their consent and the prescribed safeguards | OSH |
| Earned leave | Available after 180 days of work in a year (was 240); leave above the carry-forward limit can be encashed | OSH |
| Gratuity for fixed-term staff | After one year of service, pro rata. Details | Social Security |
| Gig and platform workers | Aggregators contribute to a social security fund for them | Social Security |
| Retrenchment and closure | Government permission needed from 300 workers (was 100); a re-skilling fund of 15 days’ last wages per retrenched worker | IR |
| Standing orders | Required from 300 workers | IR |
| Grievance redressal committee | Required from 20 workers | IR |
| Contract labour | Licensing applies from 50 contract workers in the preceding 12 months | OSH |
| Registration | One electronic registration per establishment across the Codes | OSH |
| Inspections | Inspector-cum-facilitators, with a first chance to correct many lapses before prosecution | All |
A first-quarter checklist
- Re-cut salary structures so wages are at least half of total pay, or budget for higher PF, gratuity and bonus.
- Issue appointment letters to everyone who does not have one.
- Update the leave policy for the 180-day earned-leave threshold and year-end encashment.
- Update exit processing so the full and final settlement is paid within two working days.
- Review fixed-term contracts for gratuity after one year.
- Check headcount against the 20, 50 and 300 thresholds above.
- Watch your state’s rules: they fill in hours, leave and forms for most establishments.
WebHR marks a salary structure whose basic + DA is under 50% of CTC (Finance → Salary Structures), and Finance → Final Settlements shows each settlement’s pay-by date — two working days after the last one, skipping your week off and holidays — marked overdue once it passes unpaid.
References
- PIB — Government makes the four Labour Codes effective (21 November 2025)
- DD News — Four Labour Codes come into force, reforming 29 existing laws
- DLA Piper — Labour Codes: a new era of compliance
- KPMG — draft rules under the four Labour Codes (2026)
- EY — New Labour Codes implemented, 21 November 2025
- Cyril Amarchand Mangaldas — guide to the new Labour Codes
Related
Plain-language guidance for HR teams, not legal advice. Checked against the sources above on 29 September 2026; the notification or your authority’s portal is final. Spotted something out of date? Tell us.