New Labour Law Updates Impacting Staffing & Workforce Management

1. New Labour Code For New India | Biggest Labour Reforms in Independent India 079-40143131 712 ,Times Square Arcade, Opp- rambaug, Nr Ravija Plaza, Thaltej- shilaj Road, Thaltej, Ahmedabad- 380059 info@adhaan.in https://adhaan.in/

2. Table of Contents 1 Introduction 2 New Labour Code & Old Acts 3 Code on Wages, 2019 4 Industrial Relations Code, 2020 5 Code on Social Security,2020 6 Occupational Safety, Health & Working Conditions Code, 2020 7 Objective of the New Labour Codes 8 Applicability & Coverage 9 Impact on Employers 10 Benefits for Employees 11 Compliance Requirements for Employers 12 Penalties & Non-Compliance Risks 13 Implementation Status & Readiness 14 How We Can Support You

3. Introduction India has entered a new era of workforce regulation. With effect from 21 November 2025, the four consolidated Labour Codes have officially come into force, replacing 29 legacy labour laws with a unified and modern compliance framework. This reform represents one of the most consequential changes to employment regulation in recent decades— and it will have a direct impact on how organisations manage people, payroll, compliance, and risk. For many employers, the earlier labour law regime was challenging to navigate. Multiple Acts, differing definitions, overlapping registrations, and state-specific interpretations often led to compliance gaps despite genuine intent. Businesses spent considerable time and resources interpreting obligations rather than focusing on growth, workforce engagement, and operational efficiency. The new Labour Codes are intended to simplify this environment by bringing clarity, consistency, and broader coverage. By consolidating regulations across wages, industrial relations, social security, and occupational safety and working conditions, the Codes aim to reduce fragmentation while strengthening employee protections. Importantly, they extend formal recognition and benefits to new-age workforce categories such as gig workers, platform workers, and contract labour— areas that were previously governed by limited or outdated provisions.

4. New Labour Code & Old Acts New Labour Code Old Acts Subsumed 1. The Payment of Wages Act, 1936 2. The Minimum Wages Act, 1948 3. The Payment of Bonus Act, 1965 4. The Equal Remuneration Act, 1976 Code on Wages, 2019 1. Trade Unions Act, 1926 2. Industrial Employment Act, 1946 3. Industrial Disputes Act, 1947 Industrial Relations Code, 2020 1. Employees’ Provident Funds Act, 1952 2. Employees’ State Insurance Act, 1948 3. Maternity Benefit Act, 1961 4. Payment of Gratuity Act, 1972 5. Employees’ Compensation Act, 1923 6. Employment Exchanges Act, 1959 7. Cine-Workers Welfare Fund Act, 1981 8. Building & Other Construction Workers’ Welfare Cess Act, 1996 9. The Unorganised Workers’ Social Security Act, 2008 Code on Social Security, 2020 1. Factories Act, 1948 2. Mines Act, 1952 3. Dock Workers Act, 1986 4. Building & Other Construction Workers Act, 1996 5. Contract Labour Act, 1970 6. Inter-State Migrant Workmen Act, 1979 7. Working Journalists & Other Newspaper Employees & Miscellaneous Provisions Act, 1955 8. Motor Transport Workers Act, 1961 9. Sales Promotion Employees Act, 1976 10. Beedi and Cigar Workers Act, 1966 11. Cine-Workers and Cinema Theatre Workers Act, 1981 12. Plantation Labour Act, 1951 13. Working Journalists Act, 195 Occupational Safety, Health and Working Conditions Code, 2020

5. Code on Wages, 2019 The Code on Wages, 2019 was enacted to ensure uniformity, fairness, and transparency in wage-related matters across India. It applies to all employees irrespective of sector, wage ceiling, or type of employment. The Code empowers the Central Government to fix a statutory floor wage to ensure minimum living standards. State Governments must align their minimum wages accordingly. The Code also strengthens provisions for equal pay and timely wage payments. Digitisation of records reduces disputes and improves compliance. Overall, the Code enhances worker welfare while simplifying employer obligations. Applicable to all establishments and employees Statutory floor wage fixed by Central Government Minimum wages based on skill, nature of work, and geography Equal remuneration for men and women Time-bound payment of wages (daily, weekly, fortnightly, or monthly) Simplified bonus eligibility and calculation Mandatory maintenance of digital wage records Penalties for delayed or non-payment of wages

6. Industrial Relations Code, 2020 The Industrial Relations Code, 2020 governs the relationship between employers, workers, and trade unions. It aims to promote industrial harmony while giving flexibility to businesses. The Code simplifies procedures related to hiring, termination, retrenchment, and closure of establishments. It introduces fixed-term employment to support project- based hiring without compromising employee benefits. The Code also streamlines trade union recognition and dispute resolution mechanisms. Its focus is to reduce industrial unrest and ensure quicker resolution of disputes. Covers trade unions, standing orders, and dispute settlement Fixed Term Employment allowed with statutory benefits Standing Orders applicable to establishments with 300+ workers Simplified process for union recognition Notice requirements for strikes and lockouts Compensation rules for retrenchment and layoffs Industrial Tribunals for faster dispute resolution Balance between labour protection and business flexibility

7. Code on Social Security, 2020 The Code on Social Security, 2020 significantly broadens the scope of social security in India. It integrates multiple welfare laws into a single framework to provide income and social protection. For the first time, gig workers, platform workers, and unorganised sector workers are formally recognised. The Code covers benefits such as provident fund, ESIC, gratuity, maternity benefits, and insurance schemes. It promotes portability of benefits across states and employers. Digital registration and Aadhaar-based identification improve access and transparency. Coverage extended to gig and platform workers PF, ESIC, gratuity, maternity & pension benefits included Social Security Boards at Central & State levels Portability of benefits across employment changes Mandatory employer and aggregator contributions Simplified registration through online portals Welfare schemes funded by government and employers Increased accountability through digital compliance

8. Occupational Safety, Health &Working Conditions Code, 2020 The Occupational Safety, Health and Working Conditions Code, 2020 focuses on improving workplace safety, health standards, and employee welfare. It consolidates laws related to factories, mines, docks, construction, and hazardous industries. The Code prescribes working hours, leave entitlements, and welfare facilities. Employers are legally responsible for ensuring safe working environments. The Code also mandates registration and licensing of establishments. Its primary goal is to reduce occupational hazards and promote healthy workplaces. Applicable to factories, construction, mines, and establishments Maximum working hours and overtime provisions Mandatory registration of establishments Annual leave, weekly off, and spread-over rules Employer duty to ensure workplace safety Health check-ups and safety training Welfare facilities like canteens, restrooms, drinking water Strict penalties for safety violations

9. Objective of the New Labour Codes The New Labour Codes were introduced to simplify and modernise India’s labour law framework. Earlier, multiple laws created confusion, duplication, and compliance challenges for employers. The new system consolidates regulations into four comprehensive codes to promote ease of doing business while ensuring worker welfare and protection. These reforms also aim to encourage formal employment and digital compliance. Simplification of labour laws Uniform applicability across India Improved worker protection and welfare Ease of compliance for employers Promotion of formal employment Digital governance and transparency

10. Applicability & Coverage The New Labour Codes apply to a wide range of establishments and workers across sectors. The intent is to ensure inclusive coverage without discrimination based on wage levels, employment type, or sector. Employers must carefully evaluate applicability based on workforce size and nature of business. Factories, offices, IT companies, service sectors MSMEs, startups, and large enterprises Permanent, contract, and fixed-term employees Gig workers and platform workers Organised and unorganised workforce

11. Impact on Employers The new labour laws bring both opportunities and responsibilities for employers. While compliance becomes more structured and uniform, businesses must realign HR, payroll, and operational processes to meet the new requirements. Early preparation helps avoid penalties and operational disruptions. Wage and CTC restructuring required Increased focus on minimum wage compliance Mandatory digital records and filings Establishment registration and licensing Accountability for contractor and gig workers Higher penalties for non-compliance

12. Benefits for Employees The labour reforms significantly strengthen employee rights by ensuring fair wages, social security, and safe working conditions. Workers gain better protection, transparency, and access to welfare benefits, especially those in unorganised and gig sectors. Guaranteed minimum wages Timely payment of wages Social security benefits (PF, ESIC, gratuity) Equal remuneration and non-discrimination Improved workplace safety and welfare Legal dispute resolution mechanisms

13. Compliance Requirements for Employers Compliance under the new labour codes requires proactive planning and documentation. Employers must align internal policies, employment contracts, and payroll systems with the new legal framework. Digital compliance plays a crucial role in meeting statutory obligations. Review and revise wage structures Update appointment letters and HR policies Register establishments on labour portals Maintain digital employee and wage records Ensure PF, ESIC, and gratuity compliance Train HR and payroll teams

14. Penalties & Non-Compliance Risks Non-compliance with the new labour codes can result in significant financial and legal consequences. The laws introduce stricter penalties to ensure accountability and discourage violations. Businesses must take compliance seriously to protect operations and reputation. Monetary penalties and fines Legal proceedings and inspections Business disruptions Loss of employer credibility Reputational damage

15. Implementation Status & Readiness The Labour Codes have been passed by Parliament, and their implementation depends on the notification of rules by Central and State Governments. Employers are advised to prepare in advance to ensure smooth transition once the codes come into force. Central and State rules govern enforcement Implementation may vary state-wise Advance compliance planning is recommended HR and payroll systems should be audit-ready

16. How We Can Support You Our organisation provides end-to-end labour law compliance support to help businesses adapt to the new regulatory environment. We work closely with clients to minimise risk and ensure smooth implementation. Labour law compliance advisory Wage and payroll restructuring HR policy drafting and review Compliance audits and reporting Ongoing regulatory support