Introduction
Labour Codes Compliance Checklist for Indian Companies is an important reference for businesses reviewing their employment and HR compliance in 2026. India’s four Labour Codes came into force on 21 November 2025, consolidating 29 existing central labour laws into four broader frameworks covering wages, industrial relations, social security, and occupational safety and working conditions.
For employers, the transition involves more than simply replacing old labour-law references in HR documents. Companies need to review employment contracts, salary structures, payroll processes, social-security obligations, workplace policies, employee records, safety procedures, and workforce arrangements.
The Ministry of Labour and Employment has also published a Compliance Handbook explaining the employer-compliance framework under the new Labour Codes. The Handbook states that it is primarily a reference for establishments for which the Central Government is the appropriate government, while detailed requirements may depend on the applicable rules.
This Labour Codes Compliance Checklist for Indian Companies provides a practical framework for businesses to review their major employment-law compliance areas in 2026.
Why Labour Codes Compliance Matters in 2026
The Labour Codes bring several areas of employment regulation under a consolidated framework. These include wages, social security, industrial relations, occupational safety, working conditions, appointment letters, and protections for different categories of workers.
The Ministry has stated that the Codes provide for minimum wages and timely payment of wages, broader social-security coverage, appointment letters, annual health examinations in specified circumstances, and provisions relating to gig workers, platform workers and inter-state migrant workers.
For employers, these changes make it important to review existing HR and payroll processes. A company may have complied with its earlier procedures but still need to update its documentation and systems to reflect the requirements applicable under the new framework.
Labour compliance should therefore be treated as an ongoing process involving HR, payroll, legal, finance and management teams.
Labour Codes Compliance Checklist for Indian Companies
1. Review Employee Appointment Letters
Appointment letters should be one of the first areas reviewed by employers. The Labour Codes provide for appointment letters for employees, making formal documentation of employment an important part of compliance.
Companies should examine whether their existing appointment-letter templates accurately describe the employee’s role, remuneration, employment conditions, working arrangements and other applicable terms. HR teams should also ensure that the same standards are followed consistently for new employees and that appropriate records are maintained.
An appointment letter should not be treated merely as an administrative document. It forms an important part of the employment relationship and should be consistent with the company’s policies and applicable labour requirements.
2. Review Salary and Wage Structures
Salary structures should be reviewed carefully under the Labour Codes, particularly in relation to the definition and treatment of wages. Employers should examine how basic pay, allowances and other components are structured and whether the resulting calculations are consistent with applicable statutory requirements.
The Ministry has highlighted the statutory framework for minimum wages and timely payment of wages under the Code on Wages. It has also explained that the treatment of certain allowances exceeding the specified threshold can affect the calculation of wages for statutory purposes.
Companies should therefore assess their existing salary structures rather than making isolated payroll changes. A coordinated review can help identify whether changes to wage components could affect statutory benefits, contributions or other employment-related calculations.
3. Review the Definition of Wages
The common concept of wages under the Labour Codes can have implications for payroll and statutory benefits. Employers should understand how different components of employee remuneration are treated when calculating statutory entitlements.
This is particularly relevant where companies use complex salary structures containing several allowances and benefits. Payroll teams should work with HR and legal teams to determine whether the existing structure continues to produce the required statutory calculations.
A proper wage-structure review can also help companies identify inconsistencies between employment contracts, payroll software and actual salary payments.
4. Review Working Hours and Overtime
Companies should review their working-hour and overtime practices against the requirements applicable to their establishments. The review should consider working schedules, weekly working arrangements, rest periods, attendance records and overtime payments.
The Government’s Labour Code backgrounder describes normal working hours as eight hours per day and 48 hours per week, with overtime subject to applicable requirements and payment at twice the regular rate.
Employers should nevertheless assess the rules applicable to their particular establishment and workforce rather than applying a single approach to every business. Accurate attendance and overtime records are also important because they support payroll accuracy and demonstrate compliance.
5. Review Social Security Compliance
Social-security compliance is another major area for employers. The Code on Social Security introduces a consolidated framework covering areas such as provident fund, employee state insurance, gratuity and social-security protection for different categories of workers.
The Ministry states that EPFO provisions apply to establishments employing 20 or more employees and that ESIC coverage has been expanded under the new framework, subject to the applicable conditions.
Companies should therefore review their registrations, contributions, payroll deductions, employee eligibility and statutory records. Businesses should also monitor applicable notifications and rules because the precise obligations can depend on the establishment, workforce and relevant authority.
6. Review Gratuity Compliance
Gratuity processes should also be reviewed as part of a broader Labour Codes compliance exercise. Employers should ensure that their HR and payroll systems correctly identify eligible employees and maintain the information required to calculate and process gratuity.
Changes in the treatment of wages can also affect statutory benefit calculations. For this reason, gratuity should not be reviewed separately from the company’s broader wage and payroll structure.
Companies should also maintain appropriate records relating to employee service, eligibility and payments so that gratuity obligations can be assessed and settled correctly when required.
7. Review Workplace Health and Safety
Workplace health and safety is a central part of the Occupational Safety, Health and Working Conditions Code. Employers should review whether their existing safety systems, workplace procedures and employee training continue to meet the requirements applicable to their establishment.
The Labour Ministry has highlighted safe and healthy working conditions and annual health check-ups for specified employees among the provisions under the new framework.
Businesses should therefore examine their workplace safety arrangements, accident reporting procedures, emergency systems, health records and employee awareness programmes. The exact requirements may differ depending on the nature of the establishment and the work being performed.
8. Review Women Employee Safety and Working Arrangements
The Labour Codes provide for women to work across establishments, including night work, subject to consent and applicable safety requirements.
Companies that employ women in night shifts or other roles requiring additional workplace arrangements should review their safety procedures, transportation arrangements, security measures and internal policies.
These arrangements should also be consistent with the company’s broader workplace conduct and anti-harassment framework. Employers should ensure that operational flexibility does not come at the expense of employee safety or statutory protections.
9. Review Contract Labour Compliance
Businesses that use contract workers should review their relationships with contractors and workforce providers. Labour compliance responsibilities can extend beyond the company’s direct employees, particularly where contractors supply workers to the establishment.
Companies should examine contractor agreements, wage payments, statutory contributions, worker records, safety requirements and other applicable obligations. They should also establish a process for obtaining and reviewing compliance information from contractors.
A documented contractor-compliance process can help companies identify issues before they become employment disputes or regulatory concerns.
10. Review Inter-State Migrant Worker Compliance
Companies employing workers who move between states should assess whether the workers fall within the applicable framework for inter-state migrant workers. The Labour Ministry has stated that the definition has been expanded to cover certain contractor-employed and self-migrated workers, with provisions relating to travel allowance and portability of benefits.
Employers should therefore understand the composition of their workforce and determine whether additional obligations apply. This is particularly relevant for businesses operating across multiple locations or relying on contractors for workforce deployment.
Accurate employee and worker records can make this assessment easier and can also support compliance reporting.
11. Review Gig and Platform Worker Arrangements
The Code on Social Security recognises gig and platform workers within the broader social-security framework. This is particularly relevant for businesses that operate digital platforms or rely on non-traditional workforce arrangements.
Companies should review how their workforce is structured and whether individuals engaged through platforms, service arrangements or other flexible models fall within any applicable statutory framework. Contractual terminology alone should not be the only basis for determining the legal character of a working relationship.
Businesses in this sector should monitor developments concerning social-security schemes, registrations and other implementation requirements that may affect their workforce.
12. Review Industrial Relations Policies
The Industrial Relations Code affects areas such as grievance handling, disciplinary procedures, standing orders, industrial disputes, retrenchment and other employment-related matters.
Companies should review whether their existing HR policies and disciplinary procedures remain aligned with the applicable framework. Internal processes should clearly explain how employee grievances are received, investigated and resolved.
Where a company is considering disciplinary action, restructuring or termination, the decision-making process should be supported by appropriate documentation and should take account of the statutory and contractual requirements applicable to the employee and establishment.
13. Review Retrenchment and Workforce Restructuring
Businesses considering workforce restructuring should undertake a legal review before implementing retrenchment or other significant employment changes.
The Industrial Relations Code includes provisions relating to retrenchment and provides for a Workers’ Re-Skilling Fund for retrenched workers.
Companies should therefore assess employee classification, applicable notice requirements, compensation, statutory obligations and documentation before implementing restructuring decisions. A planned approach can reduce the risk of procedural errors and employment disputes.
14. Review HR Records and Registers
Accurate employment records are essential for demonstrating compliance. The Labour Ministry’s Compliance Handbook explains the move toward simplified compliance, including rationalisation of forms and registers under the new framework.
Employers should review whether their HR systems maintain accurate information relating to employees, wages, attendance, overtime, leave, statutory contributions and other required records.
The Ministry’s Handbook also describes foundational, monthly, annual and event-based compliance activities, including maintaining attendance and wage records, depositing applicable contributions, issuing wage slips and reporting specified events.
15. Review Labour Compliance Technology
Technology plays an increasingly important role in managing employment compliance. Companies should review whether their HRMS, payroll and attendance systems can support the requirements of the new Labour Codes.
A properly configured system can help maintain employee records, calculate wages, manage attendance, track overtime, process statutory deductions and maintain compliance documentation. Digital systems can also make it easier for companies to identify missing records and upcoming compliance actions.
The Labour Ministry has highlighted technology-enabled compliance and simplified digital processes as part of the new framework.
Common Labour Codes Compliance Risks for Indian Companies
Companies can face compliance issues when old employment contracts, payroll structures or HR policies continue to be used without reviewing their relevance under the new framework. Problems can also arise when statutory contributions are calculated incorrectly, employee records are incomplete or contractor arrangements are not adequately monitored.
Businesses operating across multiple states may face additional complexity because applicable rules and administrative requirements can vary depending on the establishment and the relevant government authority. Companies should therefore avoid assuming that one compliance process will automatically apply to every location.
Another common risk is treating labour compliance as an HR-only responsibility. Effective compliance usually requires coordination between HR, payroll, finance, legal, operations and management teams.
Labour Codes Compliance Checklist for HR Teams
A practical compliance review should begin by examining the company’s employment documentation, wage structures and HR policies. The HR team should then compare these documents with current Labour Code requirements and identify areas requiring amendment.
The next stage should focus on payroll and social-security processes. Employers should review wage calculations, overtime, statutory deductions, EPF, ESIC and gratuity-related processes. They should also verify whether employee records and statutory documentation are complete and consistent.
The company should then review workplace safety, contractor arrangements, employee grievances and industrial-relations procedures. Where the business operates across multiple states or uses different categories of workers, the compliance review should also consider the specific requirements applicable to those establishments and workforce arrangements.
Finally, companies should create a compliance calendar and assign responsibility for ongoing monitoring. This helps ensure that compliance does not stop after the initial Labour Codes review.
2026 Labour Codes Compliance Considerations
The four Labour Codes have been in force since 21 November 2025. At the same time, the Ministry’s own Compliance Handbook explains that detailed requirements may depend on rules notified by the appropriate government and that the Handbook is primarily a reference document for establishments where the Central Government is the appropriate government.
This makes regulatory monitoring particularly important in 2026. Companies should continue reviewing Central and State-level developments and update their HR processes when applicable rules, notifications, schemes or administrative requirements change.
Employers should also ensure that their HR, payroll and legal teams understand the new framework. Regular internal reviews can help identify gaps before they result in disputes, notices or other compliance issues.
How Derecho Consulting Can Help
Derecho Consulting can assist Indian companies in reviewing their employment and labour-law compliance framework. Its support can cover labour-law compliance reviews, employment documentation, HR policies, wage structures, social-security matters, workplace compliance, contractor arrangements and employment-related risk management.
A structured review can help a company understand which areas require immediate attention and which processes should be monitored on an ongoing basis. Legal and compliance support can also help businesses update their documentation and internal processes as the Labour Code framework develops.
For companies with multiple establishments, large workforces or complex employment arrangements, a coordinated labour-compliance review can provide a more structured approach to managing regulatory requirements.
Conclusion
The Labour Codes Compliance Checklist for Indian Companies provides a practical starting point for businesses reviewing their employment compliance in 2026.
The four Labour Codes have consolidated 29 central labour laws into a broader framework covering wages, industrial relations, social security, occupational safety and working conditions.
For employers, compliance should not be limited to updating a few HR documents. Salary structures, payroll systems, employee contracts, social-security processes, workplace safety arrangements, contractor relationships and HR records should all be reviewed.
As implementation continues to develop through applicable rules and administrative processes, companies should maintain a regular compliance-review mechanism. This can help businesses identify gaps, update internal processes and maintain better alignment with India’s evolving labour-law framework.