# Labour Codes Compliance & Transition

> The Code on Wages, Industrial Relations Code, Code on Social Security and OSH Code replaced 29 labour laws from 21 November 2025. Employers must use the uniform 'wages' definition (excluded allowances can't exceed 50% of remuneration), issue appointment letters, follow the new thresholds for PF, ESIC, factories and contract labour, and move to unified registers, registrations and returns under central and state rules.

Practice: Labour Law & HR Compliance — https://www.industax.com/services/labour-hr/

The biggest practical change is salary structure: where basic pay was kept low, the excess allowance is now added back to wages, raising PF, gratuity and sometimes bonus. We re-model CTC structures so the cost impact is known before payroll runs.

We then update appointment letters, leave and working-hour policies, standing orders where applicable, contractor arrangements and the compliance calendar for your states.

## Key facts

| Item | Detail |
| --- | --- |
| In force | 21 November 2025 |
| Wages rule | Excluded allowances ≤ 50% of total remuneration |
| Appointment letters | Mandatory |
| Fixed-term employees | Same benefits; gratuity after 1 year |
| Standing orders | Establishments with 300+ workers |

## Who needs this

- Employers of all sizes
- HR and payroll teams
- Companies with multi-state workforces

## What's included

- Gap assessment
- Salary structure re-modelling
- Policy and letter updates
- Compliance calendar by state

## Documents

- Salary register and structures
- HR policies and templates
- Existing registrations

## Process

1. **Assess** — Gaps against the four codes mapped.
2. **Fix** — Structures, letters and policies updated.
3. **Run** — Registers, returns and challans on schedule.

## FAQs

### Do the Labour Codes reduce take-home salary?

They can, where basic pay was under 50% of remuneration — PF and gratuity contributions rise because more of the salary counts as wages. Total CTC needn't change, but the mix does.

### Do states have their own rules under the codes?

Yes. Labour is a concurrent subject, so both central and state rules apply. Procedures such as registrations, returns and some thresholds can differ by state.

### What happened to the old registers and returns?

The codes provide for unified electronic registers and returns, replacing the separate formats under older laws.

## Official sources

- Ministry of Labour & Employment — Labour Codes: https://labour.gov.in/

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Canonical page: https://www.industax.com/services/labour-hr/labour-code-compliance
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.