Understanding India's Labour Codes
India’s four Labour Codes consolidate and rationalise 29 existing central labour laws into four comprehensive codes.
The framework covers key areas of the employment lifecycle, including wages, social security, industrial relations, workplace safety, and working conditions.
The four Labour Codes are:
- Code on Wages, 2019
- Industrial Relations Code, 2020
- Code on Social Security, 2020
- Occupational Safety, Health & Working Conditions Code, 2020
For employers, the changes create a more consolidated framework, but they also mean payroll, HR, and compliance processes built around the old laws need a fresh review.
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
Salary structures, wage components, deductions, and payroll calculations may need review under the new wage definition.
HR Processes
Hiring, onboarding, employee management, and separation processes may need updates as rules are finalised at the state level.
Employee Benefits
Social security obligations depend on employee eligibility, headcount, and wage thresholds — worth checking against your current workforce.
Workplace Compliance
Workplace safety, welfare, and working-condition requirements now sit under a single code, but state-level rules still vary.
Employment Documentation
Contracts, policies, and records should reflect the consolidated employment framework.
Statutory Compliance
Regular filings, registrations, notices, records, and statutory payments should be maintained accurately and within applicable deadlines.
What Foreign Companies Hiring in India Should Know
For a foreign company entering the Indian market, employment compliance can be complex.
You may need to navigate:
- Indian employment regulations
- Labour Code requirements
- Payroll and statutory deductions
- EPFO and ESIC requirements
- Salary TDS
- State-specific employment requirements
- Employee documentation
- Statutory registrations and filings
Managing these requirements internally takes local knowledge and ongoing administration most foreign companies don’t have in-house.
This is where an Employer of Record can help.
How an EOR Supports Labour Compliance
An Employer of Record enables a company to employ workers in India through the EOR's local employment infrastructure, while the company manages the employee's day-to-day role and responsibilities. With Akross, compliance support is built into the EOR employment process, including:
Labour Code Compliance Checklist
Before hiring and managing employees in India, businesses should:
Labour Codes & India Payroll Compliance
The Labour Codes are closely connected with payroll and statutory compliance.
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.