Labour Code 2020 Compliance Guide for Employers in India

India's labour law framework is undergoing its most significant overhaul since independence. The Parliament has enacted four Labour Codes that consolidate and replace 29 central labour Acts, some dating back to the 1920s. For every employer operating in India, from a 10-person startup to a multinational corporation, these codes redefine wage structures, social security obligations, workplace safety standards, and industrial dispute procedures.

The four Labour Codes are the Code on Wages, 2019, the Industrial Relations Code, 2020, the Social Security Code, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020. Each code has received Presidential assent, and the Central Government has published draft rules. As of 2026, states are at various stages of finalising their own rules, and a phased rollout is underway.

This guide breaks down every compliance obligation an employer must meet under each code. It covers the specific thresholds, contribution rates, timelines, penalty structures, and registration procedures that HR teams, payroll managers, and business owners need to act on right now.

The 29 Old Laws and Their Replacement by 4 Labour Codes

Before the Labour Code reform, Indian employers navigated 29 separate central Acts, each with its own definitions, thresholds, return filing requirements, and enforcement machinery. A single employer with 500 workers complied with a minimum of 12 to 15 Acts simultaneously. The 4 new codes collapse this into a unified structure.

The consolidation eliminates overlapping definitions. Under the old framework, the term "wages" had 12 different definitions across 12 different Acts. Under the new codes, a single definition of wages applies across all four codes, removing ambiguity and litigation on what constitutes wages for statutory contributions.

Code on Wages, 2019: The New Wage Framework

The Code on Wages, 2019 is the first of the four codes to receive Presidential assent (8 August 2019). It replaces the Payment of Wages Act 1936, the Minimum Wages Act 1948, the Payment of Bonus Act 1965, and the Equal Remuneration Act 1976. The code applies universally to all establishments and employees, with no threshold on the number of workers.

The 50% Rule and Its Impact on Salary Structures

Section 2(y) mandates that basic wages plus dearness allowance must constitute at least 50% of the total remuneration. Here is a practical example:

The restructured salary keeps the gross CTC at ₹50,000 but shifts the component allocation. The employer's EPF contribution rises from ₹1,800 to ₹3,000 per month, and the annual gratuity provision increases by ₹5,769. Every employer must run this calculation across their entire workforce to assess the financial impact.

Universal Minimum Wage Floor

The Code on Wages introduces a national minimum wage floor set by the Central Government. No state government can fix minimum wages below this floor. The floor applies to all employees across all sectors, including agriculture, construction, and domestic work. This is a shift from the old Minimum Wages Act 1948, which applied only to "scheduled employments."

The minimum wage structure is based on geographic zones and skill levels: unskilled, semi-skilled, skilled, and highly skilled. The Central Government reviews the floor wage at least once every 5 years. State governments continue to fix state-specific minimum wages, which must be equal to or higher than the central floor.

Payment Timelines and Methods

Employers must pay wages within specific time limits:

• Monthly wage period: Wages paid by the 7th of the following month
• Weekly, fortnightly, or daily wage period: Wages paid by the 10th of the following month
• Payment methods: Current coin, currency notes, cheque, or bank account credit
• Wage slips: Employers must issue wage slips to every employee at least one working day before the wage payment date

Overtime and Bonus

Overtime wages are calculated at 2 times the normal rate of wages. There is no cap on the number of overtime hours, but the total working hours per week must not exceed the limits prescribed under the OSH Code (48 hours per week for regular work).

Bonus under the Code on Wages is payable at a minimum rate of 8.33% calculated on ₹7,000 per month or the minimum wage fixed by the government, whichever is higher. The maximum bonus is 20%. Eligibility requires earning ₹21,000 per month or less and working at least 30 working days in the accounting year. The bonus must be paid within 8 months of the close of the accounting year.

Equal Remuneration

The Code mandates equal pay for equal work regardless of gender. No employer can discriminate between employees on the ground of gender in matters relating to wages for the same work or work of a similar nature. This provision consolidates the Equal Remuneration Act 1976 into the wage framework. The term "same work or work of a similar nature" means work where the skill, effort, experience, and responsibility required are the same or broadly similar. Employers must maintain a register of workers that records the designation, wages, and gender of every employee. The Inspector-cum-Facilitator can inspect this register during compliance visits.

Non-compliance with equal remuneration provisions attracts a fine of ₹50,000 for the first offence. A repeat offence within 5 years attracts a fine of ₹1 Lakh and potential imprisonment of up to 3 months. Employers should conduct a pay equity audit covering all designations, compare male and female wages for identical roles, and close any unjustified gaps before the first inspection cycle.

Industrial Relations Code, 2020: Employment and Dispute Framework

The Industrial Relations Code, 2020 replaces the Industrial Disputes Act, 1947, the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946. This code governs the relationship between employers and workers, regulates trade unions, defines dispute resolution mechanisms, and sets the rules for hiring, retrenchment, and closure.

Standing Orders: Threshold Raised to 300 Workers

Standing orders define the conditions of employment: working hours, shifts, attendance, leave, termination, misconduct, and grievance procedures. Under the Industrial Employment (Standing Orders) Act 1946, establishments with 100 or more workers were required to frame standing orders. The Industrial Relations Code 2020 raises this threshold to 300 workers.

If an establishment with 300 or more workers does not frame its own standing orders within 6 months of the Code becoming applicable, the model standing orders prescribed by the Central Government apply automatically. Establishments with fewer than 300 workers are not required to have standing orders but can voluntarily adopt them.

Fixed-Term Employment

The Industrial Relations Code introduces a statutory framework for fixed-term employment. Key provisions:

• Fixed-term employees receive the same wages, hours, allowances, and benefits as permanent employees doing the same work
• Social security benefits (EPF, ESI, gratuity) apply equally to fixed-term employees
• Gratuity qualifying period is 4 completed years for fixed-term employees (5 years for regular employees)
• Fixed-term contracts are based on work requirements, not workforce substitution; they cannot be used to replace permanent workers
• Termination at the end of the fixed term does not constitute retrenchment

Strike, Lockout, and Layoff Provisions

Under the old Industrial Disputes Act 1947, the 14-day strike and lockout notice requirement applied only to "public utility services" such as railways, postal services, and water supply. The Industrial Relations Code 2020 extends this requirement to all industrial establishments.

Workers cannot go on strike without giving the employer a 14 calendar day advance written notice. Employers cannot declare a lockout without giving workers a 14 calendar day advance written notice. No strike or lockout is permitted during the pendency of conciliation proceedings before a Conciliation Officer or during the pendency of proceedings before an Industrial Tribunal.

Retrenchment and Closure

The threshold for requiring prior government permission for layoff, retrenchment, or closure has been raised from 100 workers (under the Industrial Disputes Act 1947) to 300 workers under the Industrial Relations Code 2020. Establishments with 300 or more workers must obtain prior approval from the appropriate government before:

• Laying off any worker
• Retrenching any worker
• Closing down the establishment

Retrenched workers receive compensation equal to 15 days average pay for every completed year of continuous service. The employer must also contribute 15 days of the last drawn wages to a reskilling fund within 45 calendar days. The reskilling fund finances training programmes administered by the government.

Dispute Resolution Mechanism

The Industrial Relations Code prescribes a structured four-step dispute resolution process:

1. Bipartite Negotiation: Direct discussion between the employer and the worker or trade union. This is the mandatory first step before any external intervention.
2. Conciliation: If bipartite negotiation fails, either party can refer the dispute to the Conciliation Officer appointed by the government. The Conciliation Officer investigates and promotes a settlement within 42 calendar days.
3. Voluntary Arbitration: If conciliation fails, both parties can mutually agree to refer the dispute to an arbitrator. The arbitrator's award is binding and enforceable like a court decree.
4. Industrial Tribunal: If arbitration is not agreed upon, the dispute is referred to the Industrial Tribunal. The Code merges the earlier two-tier Labour Court and Industrial Tribunal into a single Industrial Tribunal for faster adjudication.

Social Security Code, 2020: EPF, ESI, Gratuity, and Beyond

The Social Security Code, 2020 consolidates 9 existing social security laws into a single code. It covers the Employees' Provident Fund and Miscellaneous Provisions Act 1952, the Employees' State Insurance Act 1948, the Maternity Benefit Act 1961, the Payment of Gratuity Act 1972, the Employees' Compensation Act 1923, the Building and Other Construction Workers' Welfare Cess Act 1996, and three other Acts.

EPF Contributions and Compliance

The Employees' Provident Fund provisions remain at the core of social security compliance. The contribution structure under the Social Security Code 2020:

• Employee contribution: 12% of basic wages + dearness allowance
• Employer contribution: 12% of basic wages + dearness allowance (split as 8.33% to EPS and 3.67% to EPF)
• EDLI contribution: 0.5% from employer (Employees' Deposit Linked Insurance)
• Admin charges: 0.5% from employer
• EPS wage ceiling: ₹15,000 per month; employer EPS contribution on wages above ₹15,000 goes entirely to EPF
• Applicability: Establishments with 20 or more employees
• Filing deadline: Monthly ECR by the 15th of the following month on the EPFO Unified Portal

ESI Coverage and Contributions

The Employees' State Insurance provisions under the Social Security Code 2020 cover health insurance, sickness benefit, maternity benefit, disability benefit, and dependants' benefit for workers earning below the wage ceiling.

• Employee contribution: 0.75% of gross wages (excluding overtime)
• Employer contribution: 3.25% of gross wages (excluding overtime)
• Wage limit for coverage: ₹21,000 per month gross wages; ₹25,000 per month for persons with disability
• Establishment threshold: 10 or more employees in notified areas; 20 or more in other areas
• Filing deadline: Monthly contribution by the 15th of the following month on the ESIC Portal
• Benefits: Full medical care for employee and dependants, 70% of wages as sickness benefit for up to 91 calendar days, 26 weeks maternity benefit

Gratuity Under the Social Security Code

Gratuity is payable to employees on termination, resignation, retirement, or death after completing the qualifying period of continuous service. The key provisions:

• Calculation: 15 days wages x completed years of service (using 26 working days per month)
• Qualifying period: 5 years of continuous service for regular employees; 4 years for fixed-term employees
• Maximum gratuity: ₹20 Lakh
• Applicability: Establishments with 10 or more employees
• Payment timeline: Within 30 calendar days of it becoming payable; delay attracts simple interest at 10% per annum

Maternity Benefit

The Social Security Code 2020 maintains the maternity benefit provisions from the Maternity Benefit (Amendment) Act 2017:

• 26 weeks paid leave for the first two children
• 12 weeks paid leave for the third child onwards
• 12 weeks paid leave for adoptive mothers (from the date the child is handed over)
• 12 weeks paid leave for commissioning mothers
• Crèche facility mandatory for establishments with 50 or more employees
• 4 crèche visits per day allowed during working hours
• Work-from-home option after the maternity leave period, subject to mutual agreement with the employer

Gig Workers and Platform Workers: A First

The Social Security Code 2020 is the first Indian legislation to define and provide social security coverage for gig workers and platform workers.

The Central Government will frame schemes for gig and platform workers covering life insurance, disability insurance, health and maternity benefits, old age protection, crèche facilities, and any other benefit determined by the government. Aggregators (companies operating digital platforms) will contribute 1% to 2% of their annual turnover, subject to a maximum of 5% of the amount paid to platform workers, to the Social Security Fund.

OSH Code, 2020: Workplace Safety and Working Conditions

The Occupational Safety, Health and Working Conditions Code, 2020 replaces 13 central Acts including the Factories Act 1948, the Mines Act 1952, the Contract Labour (Regulation and Abolition) Act 1970, the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act 1979, the Dock Workers (Safety, Health and Welfare) Act 1986, and the Plantation Labour Act 1951.

Applicability Thresholds

The OSH Code applies to:

• Factories: 10 or more workers where manufacturing is carried on with the aid of power; 20 or more workers where manufacturing is carried on without power
• Mines: All mines as defined under the Mines Act 1952
• Plantations: All plantations as defined under the Plantation Labour Act 1951
• Building and construction: All building and construction work
• Contract labour: Establishments employing 50 or more contract workers (up from 20 under the old Act) and contractors employing 50 or more workers

Working Hours, Rest, and Leave

The OSH Code sets the following working condition standards:

• Daily working hours: Not exceeding 8 hours per day
• Weekly working hours: Not exceeding 48 hours per week
• Spread over: Maximum 10.5 hours including rest intervals
• Rest interval: Minimum 30 minutes after 5 continuous hours of work
• Weekly rest: One full day of rest per week
• Annual leave: One day for every 20 days of work in the preceding calendar year
• Overtime: Permitted with the worker's consent, calculated at 2x normal wages under the Code on Wages

Women in Night Shifts

The OSH Code permits women to work in all types of establishments, including during night shifts between 7 PM and 6 AM. This is a departure from the Factories Act 1948, which prohibited women from working in factories during night hours. The conditions for night shift work:

• Written consent from the woman employee is mandatory
• The employer must provide adequate safety measures at the workplace
• Transportation from the workplace to the residence and back must be arranged by the employer
• The State Government can prescribe additional safety and welfare conditions
• The number of women on a night shift must not fall below a prescribed minimum to ensure group safety

Welfare Measures by Establishment Size

Annual Health Checkups and Hazardous Process Safety

Employers engaged in hazardous processes must conduct annual health checkups for all workers at the employer's cost. Workers handling dangerous chemicals, toxic substances, or operating heavy machinery receive health surveillance cards that track their medical history throughout the employment period. The occupier of a factory involving hazardous processes must prepare an on-site emergency plan and disclose information on health hazards to workers and the general public.

Inter-State Migrant Workers and Single National Licence

The OSH Code introduces a single national licence for contractors employing inter-state migrant workers. Under the old Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act 1979, contractors needed separate licences in each state where they deployed workers. The national licence is valid across all states and territories.

Inter-state migrant workers receive a displacement allowance (a lump sum for the travel from their home state to the work state and back), and the employer must provide suitable accommodation at the work site or pay a housing allowance. The employer must also ensure that the migrant workers can exercise their right to vote in elections at their home state through a facilitation mechanism.

Compliance Requirements by Establishment Size

The Labour Codes apply different requirements based on the number of workers employed. Here is a breakdown of the key compliance thresholds:

Use this table to identify exactly which provisions apply to your establishment. A private limited company with 25 employees, for example, must comply with the Code on Wages, register for EPF and ESI, pay gratuity, maintain a grievance redressal committee, and comply with the OSH Code, but does not need standing orders, a canteen, or government permission for retrenchment.

Registration and the Shram Suvidha Portal

The four Labour Codes introduce a single registration system for all employer compliance obligations. The Shram Suvidha Portal serves as the unified digital platform for registration, return filing, inspection scheduling, and grievance management.

Single Registration Process

Under the old system, an employer needed separate registrations under the Factories Act 1948, the Shops and Establishments Act, the Contract Labour Act 1970, the Inter-State Migrant Workers Act 1979, and other Acts. The single registration under the Labour Codes works as follows:

1. Visit shramsuvidha.gov.in and create an employer account
2. Enter establishment details: name, address, PAN, nature of business, date of commencement
3. Provide the number of workers by category: permanent, contract, fixed-term, inter-state migrant
4. Upload supporting documents: Certificate of Incorporation, address proof, PAN card
5. Submit the application and receive a Labour Identification Number (LIN)
6. The LIN serves as your registration number for all four Labour Codes

For newly incorporated companies and LLPs, the EPFO and ESIC allotment is automatically handled via the SPICe+ incorporation form filed with the MCA. The Shram Suvidha registration is an additional step for OSH Code and Industrial Relations Code compliance.

Unified Annual Return

The unified annual return replaces all the individual returns that employers previously filed under each Act. One electronic return on the Shram Suvidha Portal covers:

• Establishment details and worker headcount by category
• Wages paid during the year, broken down by basic + DA and allowances
• Working hours and overtime hours recorded
• Social security contributions deposited (EPF, ESI, gratuity, EDLI)
• Workplace safety incidents, injuries, and fatalities reported
• Compliance with welfare measures (canteen, crèche, first aid, health checkups)

Inspector-cum-Facilitator: The New Enforcement Model

All four Labour Codes replace the traditional labour inspector with an Inspector-cum-Facilitator. This role combines inspection authority with an advisory function.

Web-Based Inspection System

Inspections under the Labour Codes are conducted through a web-based randomised system to eliminate inspector discretion and corruption. Key features:

• Inspection assignments are generated randomly by the Shram Suvidha Portal algorithm
• No inspector can select establishments for inspection based on personal choice
• Inspection reports must be uploaded to the portal within 72 hours of inspection
• Employers receive a copy of the inspection report electronically
• The Inspector-cum-Facilitator must provide compliance advice before issuing any notice
• Repeat inspections of the same establishment within a prescribed period require supervisory approval

Penalty Structure Under the Labour Codes

The Labour Codes introduce a graded penalty structure that distinguishes between first offences and repeat offences, and between minor violations and serious safety breaches. The key principle: first-time offences can be compounded by paying a fine, while repeat offences attract criminal prosecution.

Penalty Comparison: Old Laws vs New Codes

Compounding of Offences

First-time offences under all four codes can be compounded. Compounding means the employer pays a fine and the offence is resolved without criminal prosecution. The compounding amount is 50% of the maximum fine prescribed for the offence. If the same offence is repeated within 5 years of compounding, the employer cannot compound and faces criminal prosecution with potential imprisonment.

Offences involving death or serious bodily injury due to safety violations cannot be compounded. These proceed directly to criminal prosecution.

Implementation Status and Phased Rollout (2026)

As of 2026, the implementation of the four Labour Codes follows a phased approach:

Code on Wages, 2019

The Central Government has notified the Code on Wages (Central) Rules, 2020. Multiple state governments have drafted and published their state-specific rules. The Code is the most advanced in its implementation, and employers should treat its provisions as enforceable. The national minimum wage floor is being finalised by the Central Advisory Board.

Industrial Relations Code, 2020

The draft Industrial Relations (Central) Rules have been published. States including Uttar Pradesh, Madhya Pradesh, Karnataka, and Uttarakhand have published their draft state rules. The Code awaits final notification of state rules and an appointed date for enforcement across all states.

Social Security Code, 2020

The draft Social Security (Central) Rules have been published. The transition plan for migrating existing EPF and ESI registrations to the unified framework is under preparation. The provisions for gig worker and platform worker social security are expected to be operationalised once the Social Security Fund is constituted.

OSH Code, 2020

The draft Occupational Safety, Health and Working Conditions (Central) Rules have been published. The Code requires state governments to notify state-specific rules for factories, mines, and plantations within their jurisdiction. The single national licence for inter-state contractors is expected to be operational once the central portal is integrated with state portals.

Step-by-Step Compliance Checklist for Employers

Use this checklist to track your preparation for full Labour Code compliance:

Wage Structure Compliance (Code on Wages)

1. Audit all current salary structures across the workforce
2. Calculate the current basic + DA as a percentage of total remuneration for each employee
3. Restructure salary components to bring basic + DA to at least 50%
4. Recalculate EPF, ESI, gratuity, and bonus liabilities on the new wage base
5. Issue revised appointment letters to all employees
6. Update the payroll system with the revised salary structure
7. Conduct a pay equity audit across all roles to confirm equal pay for equal work regardless of gender
8. Configure overtime calculation at 2x the normal wage rate

Employment and Industrial Relations Compliance

1. Review all existing employment contracts for compliance with fixed-term employment provisions
2. Draft new appointment letter templates that include the 14-day strike/lockout notice clause
3. If 300+ workers: prepare standing orders or adopt the model standing orders
4. Establish a grievance redressal committee with equal employer-worker representation
5. If 100+ workers: constitute a Works Committee
6. Document the reskilling fund contribution policy for retrenchment cases
7. Map the four-step dispute resolution process into your HR manual

Social Security Compliance

1. Verify EPF registration on the EPFO Unified Portal for establishments with 20+ employees
2. Verify ESI registration on the ESIC Portal for establishments with 10+ employees
3. Enrol all eligible employees who are not yet registered under EPF and ESI
4. Recalculate EPF contributions on the new basic + DA base
5. Update gratuity provisioning in the balance sheet using the new wage definition
6. Review maternity benefit policy: 26 weeks for first two children, 12 weeks for third onwards
7. If 50+ workers: set up or verify crèche facility compliance
8. If you engage gig or platform workers: monitor Central Government scheme notifications

Workplace Safety Compliance (OSH Code)

1. Register on the Shram Suvidha Portal and obtain the LIN
2. Ensure daily working hours do not exceed 8 hours and weekly hours do not exceed 48
3. Schedule annual health checkups for workers in hazardous processes
4. If 50+ workers: confirm crèche facility is operational
5. If 100+ workers: set up a subsidised canteen
6. Obtain written consent from women employees for night shift assignment
7. Prepare first-aid facilities and display emergency procedures
8. If engaging inter-state contract workers: apply for the single national licence
9. File the unified annual return on the Shram Suvidha Portal

Wage Restructuring: Worked Example for a 50-Employee Company

Here is a detailed worked example showing the financial impact of wage restructuring for a company with 50 employees:

*ESI not applicable as gross wages exceed ₹21,000/month.

The annual additional cost for a 50-employee company is close to ₹9.6 Lakh. For a 200-employee company with similar salary profiles, this scales to ₹38.4 Lakh per year. Factor this cost increase into your annual compensation budget and pricing strategy.

For businesses that need help managing the increased accounting and payroll complexity, professional services can handle the restructuring and ongoing compliance filings.

Key Differences: Old Labour Laws vs New Labour Codes

The table below summarises the most impactful changes between the old framework and the new Labour Codes:

Internal Policies to Update Before Implementation

Beyond registration and return filing, employers must update the following internal policies to align with the Labour Codes:

1. Employee Handbook and HR Manual

Revise the employee handbook to include the new wage definition, fixed-term employment terms, the 14-day strike notice provision, and the grievance redressal committee process. Remove references to the old Acts (Industrial Disputes Act 1947, Payment of Wages Act 1936) and replace with the corresponding Labour Code provisions.

2. Leave Policy

Update the leave policy to align with OSH Code provisions: annual leave at 1 day per 20 days worked, maternity leave at 26 weeks for the first two children, and weekly rest of one full day per week. Remove any leave provisions that conflict with the Code.

3. Anti-Discrimination and Pay Equity Policy

Draft or update the anti-discrimination policy to reflect the equal remuneration provisions under the Code on Wages. Document the pay equity audit methodology and retain records for inspector review.

4. Workplace Safety Policy

Update the safety policy with the OSH Code provisions: annual health checkups for hazardous process workers, night shift safety measures for women, canteen and crèche requirements, and the on-site emergency plan for factories with hazardous processes.

5. Retrenchment and Exit Policy

Add the reskilling fund contribution (15 days last drawn wages within 45 calendar days) to the exit policy. Update the retrenchment notice period and compensation calculations. If 300+ workers, include the government permission requirement.

GST and Tax Implications of Wage Restructuring

Wage restructuring under the 50% rule affects not just labour law compliance but also income tax and GST obligations for employers:

Income Tax Impact on Employees

A higher basic + DA component increases the taxable portion of salary for employees, since HRA and other tax-saving allowances are reduced. Employees who previously optimised their tax through higher HRA claims will see a marginal tax increase. Employers should communicate this impact transparently and help employees explore alternative tax-saving instruments under Section 80C, 80D, and the New Tax Regime.

The HRA exemption under Section 10(13A) of the Income Tax Act 1961 is calculated as the lowest of: actual HRA received, 50% of basic + DA for metro cities (40% for non-metro), or actual rent paid minus 10% of basic + DA. When basic + DA increases and HRA decreases, the exemption formula changes. Employees in metro cities with high rents benefit from the higher basic (as it increases the 50% component), but those with lower rents or in non-metro locations face reduced tax savings.

Employer TDS Obligations

With the restructured salary, the TDS calculation changes for every employee. Payroll teams must recalculate the TDS deduction schedule from the month the restructuring takes effect. The employer's overall TDS deposit (Section 192 of the Income Tax Act 1961) to the government increases for employees in higher tax brackets.

The employer must revise Form 12BA (Statement of Perquisites) for each employee at the end of the financial year and issue an updated Form 16 reflecting the restructured components. If mid-year restructuring is done, the payroll system must prorate the old and new structures across the respective months. Arrear calculations, if any, add further complexity to the TDS computation.

GST on Labour Contracts

If your business engages contract labour, the contractor charges GST on the labour supply. The restructured wages flow into the contractor's pricing, potentially increasing the GST-inclusive cost of contract labour. Verify that your contracts include clauses for wage revision pass-through to avoid disputes with contractors.

Manpower supply services attract 18% GST under SAC code 998519. When the underlying wages increase due to the 50% basic + DA requirement, the contractor's invoiced amount rises, and the GST charged on that invoice rises proportionally. Employers can claim Input Tax Credit (ITC) on the GST paid for manpower supply services, provided the services are used for business purposes and proper tax invoices are maintained.

Annual Compliance Calendar Under the Labour Codes

Employers must track recurring compliance deadlines across all four Labour Codes. The following calendar consolidates every major filing, payment, and audit obligation into a single reference:

Missing any of these deadlines triggers penalties under the respective code. EPF late payment attracts interest at 12% per annum plus damages ranging from 5% to 25% of arrears based on the delay period. ESI late payment attracts 12% per annum interest. Maintaining a shared compliance calendar accessible to the HR, payroll, and finance teams is the most effective way to avoid missed deadlines.

External Resources and Government Portals

• EPFO Official Portal -- Employer registration, UAN generation, monthly ECR filing, and PF settlement
• ESIC Official Portal -- Employer registration, IP number generation, monthly contribution filing, and benefit claims
• Ministry of Labour and Employment -- Full text of all four Labour Codes, draft rules, press releases, and implementation updates
• Shram Suvidha Portal -- Single registration, unified annual return, inspection reports, and grievance filing

Summary

India's four Labour Codes represent the most significant reform of the country's labour law framework in decades. The Code on Wages 2019 redefines wages with a 50% basic + DA threshold, establishes a universal minimum wage floor, and mandates equal pay for equal work. The Industrial Relations Code 2020 raises the standing orders threshold to 300 workers, introduces fixed-term employment, and requires 14-day strike/lockout notice for all establishments. The Social Security Code 2020 consolidates EPF, ESI, gratuity, and maternity benefits under one framework and extends coverage to gig and platform workers. The OSH Code 2020 standardises working hours at 8 per day and 48 per week, permits women in night shifts with consent, and introduces the single national licence for inter-state contractors.

The consolidation from 29 Acts to 4 codes reduces the number of separate registrations, returns, and compliance interfaces that employers manage. A single definition of wages eliminates the ambiguity that generated years of litigation under the old laws. The Inspector-cum-Facilitator model shifts enforcement from a punitive-first approach to an advisory-first approach, and the compounding provision for first-time offences gives employers a structured path to correct violations without criminal prosecution.

For employers, the immediate action items are: restructure wages to meet the 50% threshold, register on the Shram Suvidha Portal, update employment contracts, enrol all eligible workers under EPF and ESI, implement workplace safety measures, and prepare for the unified annual return. The compliance setup takes 60 to 90 calendar days. Employers who act now avoid penalties and position their businesses for full compliance when the final state rules are notified.

For professional assistance with wage restructuring, ESI registration, EPF compliance, standing order drafting, and ongoing HR and payroll management, our team provides end-to-end labour law compliance services tailored to your establishment size and industry.