Payroll teams have been struggling for decades with a complex & disintegrated labour law landscape. The decision of the Indian government to integrate all the laws into four labour codes demonstrated one of the most significant transformations that payroll functions have undergone in many years.
The implications for payroll, HR & business leaders go beyond legal compliance into structuring of salary, audit preparedness, & handling of statutory costs.
29 Laws to Four Labour Codes
Traditionally, there used to be 29 labour laws under India’s labour framework, each catering to different compliance needs. This made things complicated for payroll outsourcing services in India and HR teams, as they often ended up managing obligations that were overlapping, enhanced compliance challenges, & manual data verification.
The introduction of the labour codes simplified the environment by bringing to the table wage regulation, industrial relations, workplace safety and social security under one consolidated structure.
The 4 new labour codes are:
1. Code on Wages,2019
The wage rules of India used to be fragmented across various laws, but now the Code on Wages, 2019 consolidates all of them under a uniform structure. This code entails minimum wages, timely payment of salary, bonus payments, & equal remuneration in a common legal framework. The code has been in effect since November 21, 2025, providing employers with a fresh perspective for their wage & payroll policies & practices.
The Code replaces & revokes:
- The Payment of Wages Act, 1936
- The Minimum Wages Act, 1948
- The Payment of Bonus Act, 1965
- The Equal Remuneration Act, 1976
Key Provisions:
- Applicable Universally
- Definition of Wages & 50% Rule
- Floor Wages
- Timely Payment Directives
- Deductions & Bonuses
- Gender Equality
- Penalties
2. Industrial Relations Code, 2020
This code is a labour law passed to simplify and consolidate labour laws that oversee trade unions and employment conditions in manufacturing units; it also investigates & helps in industrial dispute settlement. The law came into effect on November 21, 2025.
The Code replaces & revokes:
- Trade Unions Act, 1926
- Industrial Employment (Standing Orders) Act, 1946
- Industrial Disputes Act, 1947
Key Provisions:
- Unified framework combining rules associated with trade unions, working conditions, & industrial disputes.
- Bipartite forums including committees like the Works Committee and Grievance Redressal Committee (GRC)
- Union or Council that entails creation of a framework to identify a union or council responsible for facilitating collective bargaining.
- Lockouts & Strikes are provisions in which advance notice is required to be provided, and workers should refrain from strikes and lockouts in specific circumstances.
- Standing order applicability is to cover industrial establishments with 300 or more workers
- Layoffs, Retrenchment, & Closure involve highlighting applicable compensation for layoffs, retrenchment status, processes, & reemployment needs.
- Fixed-term employment allows fixed-term employment across sectors, ensuring that statutory benefits are provided on par with permanent workers.
- Dispute resolution involves Conciliation Officers, bipartite committees, and Industrial Tribunals
3. Code on Social Security, 2020
Code on Social Security, 2020 brings all the social security rules that were scattered into a unified framework, providing social security benefits across sectors like unorganised, organised, gig, & platform workers.
The Code replaces & revokes:
- Employees’ Compensation Act, 1923
- Employees’ State Insurance Act, 1948
- Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
- Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
- Maternity Benefit Act, 1961
- Payment of Gratuity Act, 1972
- Cine-Workers Welfare Fund Act, 1981
- Building and Other Construction Workers’ Welfare Cess Act, 1996
- Unorganised Workers’ Social Security Act, 2008
Key Provisions:
- The social security coverage is extended to gig & platform workers. It also introduces the definition of gig and platform workers, & aggregators
- Employee Provident Fund (EPF) applies to establishments with more than 20 employees
- Employee State Insurance (ESI) is provided to establishments that are hiring 10 or more employees.
- Proportionate gratuity is provided to fixed-term employees who are eligible
- Maternity benefits include 26 weeks of paid maternity benefits for eligible women employees.
- Construction Cess applies to building and construction work obligations.
- Maintenance of statutory records like registers, returns, and more.
4. Occupational Safety, Health and Working Conditions Code, 2020
The workplace safety rules in India were also disconnected and spread everywhere. These laws were accumulated, and the Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020 was formed. This code specifically covers workplace safety and employee health, working conditions, contract labour, & inter-State migrant workers in an integrated framework, simplifying compliance through registration & licensing provisions.
The Code consolidates the following 13 central labour laws:
- Factories Act, 1948
- Plantations Labour Act, 1951
- Mines Act, 1952
- Working Journalists and Other Newspaper Employees Act, 1955
- Working Journalists (Fixation of Rates of Wages) Act, 1958
- Motor Transport Workers Act, 1961
- Beedi and Cigar Workers Act, 1966
- Contract Labour (Regulation and Abolition) Act, 1970
- Sales Promotion Employees Act, 1976
- Inter-State Migrant Workmen Act, 1979
- Cine-Workers and Cinema Theatre Workers Act, 1981
- Dock Workers (Safety, Health and Welfare) Act, 1986
- Building and Other Construction Workers Act, 1996
Conclusion
The new Labour Codes of India have consolidated 29 laws into four frameworks, and now they require organisations to design robust payroll & compliance systems & smart manpower planning, driving businesses to work with the changing statutory responsibilities confidently.
