Understanding India's Labour Codes
India’s four Labour Codes consolidate 29 central labour laws covering wages, industrial relations, social security, and occupational safety and working conditions. Effective from 21 November 2025, the Codes reshape important aspects of employment administration and employer compliance in India.
The four Labour Codes are:
Code on Wages, 2019
Industrial Relations Code, 2020
Code on Social Security, 2020
Occupational Safety, Health and Working Conditions Code, 2020
Employers should review their wage structures, employment policies, payroll processes, employee records, and statutory obligations against the applicable provisions, Central Rules, and relevant State requirements.
The 4 Labour Codes Every Employer Should Know
India's labour law framework has been consolidated into four codes. Here's a quick breakdown of what each one covers — and what it means for your compliance checklist.
What Do the Labour Codes Mean for Employers?
The Labour Codes touch several areas of an organisation’s employment and payroll operations.
Payroll & Wage Structures
Review wage components, salary structures, deductions, and payroll calculations against applicable wage requirements.
HR Processes
Review hiring, onboarding, employee management, and separation procedures against relevant employment obligations.
Employee Benefits
Assess applicable social security, statutory benefits, eligibility criteria, and contribution requirements.
Workplace Compliance
Assess workplace safety, welfare, working conditions, and other requirements relevant to the establishment.
Employment Documentation
Review appointment letters, employment contracts, HR policies, and employee records for applicable requirements.
Statutory Compliance
Track applicable registrations, returns, records, contributions, and statutory deadlines.
What Foreign Companies Hiring in India Should Know
For international businesses hiring employees in India, employment compliance involves understanding central labour legislation, applicable State requirements, payroll obligations, and employee documentation. The requirements depend on the employing entity, workforce, location, and nature of the business.
- Applicable Indian employment regulations
- Labour Code requirements
- Payroll and statutory deductions
- EPF and ESI applicability
- Salary tax and TDS requirements
- State-specific employment requirements
- Employee contracts and documentation
- Statutory registrations, records, and filings
Managing these requirements internally can require dedicated HR, payroll, and compliance resources. Akross helps international businesses coordinate India employment administration through its EOR service arrangement, with responsibilities defined by the applicable legal structure and service agreement.
How an EOR Supports Labour Compliance
An Employer of Record can support employment administration through an appropriate local employing arrangement. Akross helps coordinate relevant onboarding, payroll administration, employment documentation, and compliance-related processes in India. The responsibilities of each party depend on the applicable legal structure and service agreement.
Labour Code Compliance Checklist
Before hiring and managing employees in India, businesses should review the following areas against the Labour Codes, applicable rules, and relevant State requirements.
Labour Codes & India Payroll Compliance
Labour Code requirements interact with payroll, social security, employee benefits, and applicable State-level obligations. Employers should assess each requirement according to the relevant legislation, eligibility criteria, and employment arrangement.
Frequently Asked Questions
Common questions on India's Labour Codes and what they mean for employers.
What are India's four Labour Codes?
India's Labour Code framework consists of four codes covering wages, industrial relations, social security, and occupational safety, health and working conditions.
When did India's Labour Codes come into effect?
The four Labour Codes were brought into effect from 21 November 2025.
Do foreign companies hiring employees in India need to consider the Labour Codes?
Yes. Any business employing people in India needs to account for Indian employment, payroll, social security, and other statutory requirements under the new framework.
Do the Labour Codes replace all existing employment laws?
The four Codes consolidate and rationalise 29 existing central labour laws into a unified framework. Specific applicability depends on the relevant provisions, rules, and your state jurisdiction, since several states are still finalising their implementation rules.
How can an EOR help with Labour Code compliance?
An EOR provides a local employment structure and manages employment, payroll, statutory, and administrative requirements on your behalf — so you can hire in India without setting up your own employment entity.
What should a company do before hiring its first employee in India?
Assess your employment structure, payroll, social security obligations, tax requirements, state-level registrations, and documentation before onboarding your first employee.