India's Four Labour Codes Are in Force: What Employers and EOR Clients Should Know

The Government of India made the four Labour Codes effective from 21 November 2025, rationalising 29 existing central labour laws into the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020.

Highlights published by PIB

• Appointment letters: mandatory appointment letters for workers
• Wages: minimum wages extended to all employments, a statutory floor wage, and timely payment of wages
• Fixed-term employees: benefits on par with permanent employees, with gratuity eligibility after one year of continuous service
• Social security: EPFO coverage applies to establishments employing 20 or more employees; ESIC coverage extended pan-India, voluntary for establishments with fewer than 10 employees
• Wage definition: allowances exceeding 50% are made part of wages for purposes such as gratuity and provident fund contributions
• Health check-ups: free annual health check-up for employees above a specified age
• Simplified compliance: single registration, single licence and single return across relevant requirements

Transition

PIB states that during the transition, the relevant provisions of the existing labour Acts and their rules, regulations, notifications and schemes continue to remain in force while rules and schemes under the Codes are framed. Employers should therefore track which rules have been notified for their state and sector.

Why it matters for payroll and EOR

• Salary structures may need review in light of the wage definition
• Contracts and appointment letters should be checked against the Codes
• Gratuity, PF and ESIC calculations and provisions should be reviewed with payroll and tax advisors
• Employers using an Employer of Record should confirm with the provider how these changes are being handled

Official sources

• PIB, "Government Makes the Four Labour Codes effective to Simplify and Streamline Labour Laws", 21 November 2025
• PIB, "Social Security for Unorganised Workers", 18 December 2025

Advisory note: Rules, state-level provisions and transition arrangements are still developing. This summary reflects the official sources listed above and is not legal advice. Confirm the current position with qualified counsel and the official sources.