India’s labour law landscape has been transformed with the consolidation of 29 laws into 4 Labour Codes, the Code on Wages (2019), Code on Social Security (2020), Industrial Relations Code (2020), and the Occupational Safety, Health and Working Conditions Code (2020). These changes, effective from November 21, 2025, redefine HR policies and compliance obligations for employers.
For HR leaders, this is not just a legal update, it’s a strategic reset. Below are the key changes effective in 2026.
Wage Structure
- Basic Pay ≥ 50% of CTC: Employers must ensure that basic pay forms at least half of the total cost-to-company.
- Impact: Higher PF and gratuity contributions, reducing the scope for structuring allowances to minimize statutory liabilities.
HR must redesign salary structures to remain compliant while balancing employee take-home pay.
Working Hours & Overtime
- Daily Hours: 8–12 hours (with consent for extended shifts).
- Weekly Limit: 48 hours.
- Overtime: Paid at double the ordinary wage, requiring employee consent.
Employers must maintain accurate attendance and overtime records to avoid penalties.
Social Security & Benefits
- Gratuity Eligibility: Reduced to 1 year of service (previously 5 years).
- Fixed-Term Employees: Now entitled to gratuity and other benefits.
- Coverage Extended: Benefits now include gig, platform, and unorganized workers.
HR must update policies to include fixed-term and non-traditional workers in benefit schemes.
Industrial Relations & Disputes
- Strike Notice: Mandatory 14-day notice for all establishments.
- Mass Casual Leave: Defined as a strike.
- Layoff Threshold: Prior government permission required only for establishments with 300+ workers (raised from 100).
Employers gain flexibility in workforce management but must comply with stricter strike protocols.
Women’s Employment
- Night Shifts Permitted: Women can work night shifts with mandatory safety measures.
- Grievance Committees: Mandatory representation of women in grievance redressal mechanisms.
HR must implement workplace safety audits and ensure gender representation in compliance committees.
Gig and Platform Workers
- Social Security Coverage: Extended to gig, platform, and unorganized workers.
- Funding: Contributions from aggregators, government, and workers themselves.
Employers in the gig economy must prepare for compliance with PF, ESI, and other social security obligations.
Contract Labour
- Core Activities: Prohibition of contract labour in core activities, except for intermittent or specialized services.
- Registration: Single registration for establishments employing contract labour.
HR must audit workforce deployment to ensure compliance with core vs. non-core activity rules.
FREE HR Compliance Checklist (2026)
- Redesign salary structures to meet the 50% basic pay rule.
- Track working hours and overtime with employee consent.
- Extend gratuity and benefits to fixed-term employees.
- Update policies for gig and platform worker coverage.
- Implement strike notice protocols and monitor mass leave actions.
- Ensure women’s safety measures for night shifts.
- Maintain grievance committees with gender representation.
- Audit contract labour deployment in core activities.
Disclaimer: This blog is for educational purposes only. Labour Code compliance may vary based on state-specific rules and judicial interpretations. For case-specific advice, consult a certified Labour Law Consultant or practicing advocate.