All 4 Labour Codes are now in effect nationwide, replacing 29 old central acts. Here's what changed, what's still rolling out state-by-state, and what it means for your business.
The Codes consolidate decades of overlapping central labour legislation into four unified laws.
Consolidates the Minimum Wages Act, Payment of Wages Act, Payment of Bonus Act, and Equal Remuneration Act. Introduces a uniform "wages" definition and the 50% wage-floor rule.
Consolidates the Trade Unions Act, Industrial Employment (Standing Orders) Act, and Industrial Disputes Act. Covers standing orders, retrenchment, layoffs, and dispute resolution.
Consolidates EPF, ESIC, Gratuity, Maternity Benefit, and Employees' Compensation laws (9 acts total). Extends social security coverage to gig and platform workers.
Consolidates the Factories Act, Contract Labour Act, Inter-State Migrant Workmen Act and 10 other acts covering workplace safety, health, and working conditions.
The headline numbers that actually move the needle for employers — side by side.
| Dimension | Old Framework (29 Laws) | New Framework (4 Codes) |
|---|---|---|
| Number of laws | 29 separate statutes | 4 consolidated codes |
| Wage definition | Different across each law | Uniform — Basic + DA ≥ 50% of total |
| Gig worker coverage | Not covered | Included under Social Security Code |
| Retrenchment permission | Required for 100+ workers | Required for 300+ workers |
| FTE gratuity eligibility | 5 years' continuous service | 1 year for fixed-term employees |
| Record keeping | Physical registers | Mandatory digital records |
| Inspections | Routine inspector visits | Risk-based, algorithm-driven audits |
| Full-and-final settlement | 30–45 days (common practice) | 2 working days (statutory) |
| Factory threshold | 10 (with power) / 20 (without power) | 20 (with power) / 40 (without power) |
| Enforcement model | Prosecution-first | Cure period + compounding option |
All four Labour Codes notified as effective law nationwide. The 29 central labour acts they replace stand repealed.
Central Government notifies final Central Rules for all four Codes — Code on Wages (Central) Rules 2026, Social Security (Central) Rules 2026, OSH&WC (Central) Rules 2026, and Industrial Relations (Central) Rules 2026.
State-level rules are rolling out unevenly. Over 30 states/UTs have notified rules for at least one Code, but there is still no single common commencement date announced by the Centre for all state-dependent provisions.
Maharashtra is among the states furthest along, having notified rules under most of the four Codes, alongside Gujarat and Karnataka. This means Maharashtra-based employers should expect state-level provisions to become fully operative sooner than employers in states that haven't yet notified their rules.
Since exact operative dates for specific provisions continue to be notified and refined, we recommend confirming your current obligations directly with our team rather than relying on any single snapshot in time — including this page.
Not sure if your salary structure already meets the new wage-floor rule under the Code on Wages?
Try the Allowance Heatmap Tool →The Codes redefine several foundational terms — and those new definitions decide who counts as a worker, what counts as wages, and which rules apply where.
Excludes supervisors drawing ₹18,000/month or more (earlier the cut-off was just ₹3,000/month) — a big jump that pulls many mid-level supervisory staff out of "worker" protections.
Now includes resident migrants working in the state as well as migrants brought in by a contractor, where wages are below ₹18,000/month.
Now includes inter-state migrant workers and "out workers" — those who work outside the establishment's premises.
A place of business, trade, or manufacture employing 10 or more workers.
Basic pay + DA + Retention Allowance. Excludes Bonus, HRA, other allowances, PF/Pension, overtime, and Gratuity. If these exclusions exceed 50% of total remuneration, the excess is added back to "wages" for benefits computation.
For contractors working in centrally-governed establishments, compliance now falls under the Central Labour Rules.
Registrations and contractor licences are being consolidated under the OSH Code — fewer overlapping registrations, but new deadlines to track.
Work hours, leave, gratuity, and compensation rules have all shifted — most of them in the employee's favour, which means higher benefit costs for employers.
8 hours a day, 6 days a week. Overtime is payable at twice the regular wage rate (as newly defined). Working on the weekly rest day is now also compensated at double rate.
1 day of leave for every 20 days worked. Minimum 180 days worked in a year required (down from 240). Layoff, maternity, and annual leave count towards eligibility, though not towards entitlement itself. Holidays falling within a leave period don't count as leave.
Maximum carryforward is 30 days; the excess can be encashed at year-end. Leave applied for but not granted can be encashed without limit. All leave entitlement is payable on discharge, dismissal, or superannuation, even if eligibility criteria aren't otherwise met.
PF, ESI, Bonus, Maternity Benefit, and Gratuity are all now calculated on the new definition of wages — expect higher benefit costs across the board.
Fixed-term employees are now eligible for gratuity on a pro-rata basis after a minimum of 1 year's work. Payable within 30 days of the employee's application. Gratuity insurance is now mandatory.
Calculated as 50% of wages multiplied by the relevant age factor. The earlier minimum compensation clauses of ₹1.2 lakh / ₹1.4 lakh under the Employee Compensation Act have been deleted.
These are the operational obligations that fall directly on employers under the new Codes — the ones LEAP helps you stay on top of every month.
Wages must be paid within 7 days of the end of the pay period, for all establishments.
Deductions from monthly salary cannot exceed 50% of wages, as newly defined.
The principal employer is directly accountable for the wages and benefits of all contract labour, and can deduct unpaid wages or contributions from contractor invoices.
A letter of appointment must be issued within 3 months of the Code becoming applicable. An experience certificate must be given to discharged employees within the stipulated days.
Mandatory for factories employing 500 or more workers, hazardous industries with 250 or more workers, construction work with 250 or more workers, and mines employing 100 or more workers.
Must be completed within 2 days of relieving. Wages or benefits may not be reduced for any reason.
Must be provided free of cost to all employees, including contract employees.
Everything above, condensed into one lookup table — what's required, under which Code, how often, and what non-compliance can cost you. Penalty figures are indicative and subject to the final notified rules; confirm specifics with our team before relying on them.
| Compliance Area | Key Requirement | Applicable Code | Frequency | Penalty Range |
|---|---|---|---|---|
| Salary structure | Basic + DA ≥ 50% of total remuneration | Code on Wages | One-time restructuring + ongoing | ₹50,000 first offence |
| Minimum wages | Pay at or above floor wage for all categories | Code on Wages | Ongoing | ₹50,000 (first), ₹1 lakh (repeat) |
| Overtime payment | Twice the normal wage rate for all eligible workers | Code on Wages | Per occurrence | ₹50,000 (first) |
| Equal remuneration | No gender-based wage discrimination | Code on Wages | Ongoing | ₹50,000–₹1 lakh |
| PF contributions | 12% of wages (as newly defined) | Social Security Code | Monthly (15th) | Up to ₹5 lakh |
| ESI contributions | Employer 3.25%, employee 0.75% (if wages ≤ ₹21,000/month) | Social Security Code | Monthly (15th) | Up to ₹5 lakh |
| Gratuity provision | 4.81% of wages; eligible after 5 years (1 year for FTE) | Social Security Code | Annual provision / on separation | Up to ₹1 lakh |
| Maternity benefit | 26 weeks paid leave; crèche for 50+ employees | Social Security Code | Per occurrence | Up to ₹1 lakh |
| Gig worker cess | 1–2% of annual turnover (for aggregators) | Social Security Code | Annual (rates to be notified) | To be specified |
| Trade union recognition | Recognised union for 51%+ membership | Industrial Relations Code | On application | — |
| Standing orders | Mandatory for 300+ worker establishments | Industrial Relations Code | One-time + amendments | ₹1 lakh |
| Retrenchment notice | 90 days + govt. permission for 300+ establishments | Industrial Relations Code | Per occurrence | Up to ₹10 lakh |
| Working hours | Max 8 hrs/day, 48 hrs/week (with exceptions) | OSH Code | Ongoing | ₹2 lakh (first), ₹5 lakh (repeat) |
| Annual health check-up | Free for workers above prescribed age (45 in draft rules) | OSH Code | Annual | ₹2 lakh |
| Digital records | Electronic registers replace physical registers | All Codes | Ongoing | Varies by Code |
| Shram Suvidha registration | Single registration + digital compliance portal | All Codes | One-time + updates | — |
A practical punch-list to work through — this is exactly the kind of gap-check we do for you in the free 1-hour audit.
Book a free 1-hour compliance audit and we'll walk through exactly what's changed for you, including your Maharashtra-specific obligations.