India has enacted a significant overhaul of its labour regulatory framework with the implementation of four consolidated Labour Codes, replacing 29 existing laws. The changes modernise compliance, expand worker protections, and simplify processes in support of the country’s wider ease-of-doing-business agenda. For global payroll and mobility teams, the reforms introduce new compliance obligations, operational adjustments, and implications for compensation structures.
Code on Wages, 2019
The Code consolidates wage-related legislation and introduces a unified definition of “wages” across all four Labour Codes.
Key measures include:
Industrial Relations Code, 2020
The IR Code aims to provide a more stable industrial relations framework while allowing greater workforce flexibility.
Key measures include:
Code on Social Security, 2020
The Code consolidates nine social security laws and expands coverage significantly.
Key measures include:
Occupational Safety, Health and Working Conditions (OSH) Code, 2020
The OSH Code streamlines working condition requirements and introduces digital-first compliance processes.
Key measures include:
Unified Definition of “Wages”
A single wage definition now applies across all Labour Codes, reducing historical ambiguity and affecting calculations for PF, Gratuity, ESI and other statutory benefits.
This may lead to:
Payroll & Finance
HR & Legal
Communication
India’s Labour Codes represent a major consolidation of labour law, introducing unified definitions, streamlined processes and expanded worker protections. Organisations operating in India should reassess payroll structures, compliance exposure and workforce policies to ensure readiness under the new framework.
For further detailed guidance on payroll, employment law and compliance in India, visit our India Global Insights on the activpayroll website.
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