New Labour Codes 2026: Comprehensive Compliance Checklist for Employers and MSMEs

PHD Chamber of Commerce and Industry (PHDCCI) commends the Government of India, under the leadership of the Prime Minister and the Ministry of Labour and Employment, for bringing the four Labour Codes into force on 21 November 2025. It is the most comprehensive overhaul of India’s labour laws since Independence.

The reform replaces 29 central laws, many dating from the colonial and early post-Independence era, with four modern Codes.

The Government has also delivered on implementation. Final Central Rules and the Model Standing Orders followed on 8–9 May 2026, and new EPF, EPS and EDLI Schemes took effect on 29 June 2026. Industry now has the clarity it needs to plan, invest and hire.

• For workers: minimum wages, timely payment and social security extended to all, including gig and platform workers for the first time.
• For enterprise: 84 registers cut to 8, 31 returns to one electronic return, and a single registration and licence.
• For the economy: SBI Research projects the formal share of the workforce rising from 60.4% to 75.5%, about 77 lakh additional jobs and a consumption boost of around ₹75,000 crore.

The Codes cut labour law volume by more than half and paperwork by about 90%. A fragmented system of overlapping definitions, inspectors and filings has given way to one coherent framework.

A single, uniform definition of “wages” now applies across all four Codes. This ends decades of litigation over what counts as wages for PF, bonus, gratuity, and compensation, giving employers and workers the same reference point.

Universal protection for every worker

The Codes extend core protections from a minority of the workforce to all of it. This is the reform’s defining social achievement.

• Minimum wages for all: coverage moves from scheduled employments, roughly 30% of workers, to every worker. A Centre-fixed floor wage will bind all States and end a race to the bottom between regions.
• Timely pay without arbitrary deductions: these safeguards earlier applied only up to ₹24,000 a month and now apply at every salary level. 
• Equal remuneration: pay parity irrespective of gender, with transgender workers expressly included.
• Formal appointment letters: every employee now receives one in a prescribed format, giving workers documentary proof of employment.
• Fixed-term employees: full parity in wages and benefits with permanent staff, and gratuity after one year instead of five.

Gig and platform workers: recognised in law for the first time

The Code on Social Security is the first Indian law to define gig workers, platform workers and aggregators and to fund their welfare. Aggregators contribute 1–2% of annual turnover, capped at 5% of payouts to such workers.

This is a forward-looking choice. NITI Aayog projects India’s gig workforce to grow from 77 lakh in 2020–21 to 2.35 crore by 2029–30. The e-Shram portal, which completed five years in August 2026, had 31.89 crore registrations as of 18 August 2026, including about 11.5 lakh platform workers and with women making up 54.28% of registrants. Each worker gets a portable Universal Account Number.

The Codes build on a decade of progress. ILO data show India’s social protection coverage rose from 19% in 2015 to 64.3% in 2025, covering more than 94 crore people and placing India second in the world by beneficiaries.

Ease of doing business and a boost for MSMEs

The Codes balance worker protection with the flexibility enterprises need to grow, hire and compete globally. MSMEs, which account for about 31.1% of GDP, 35.4% of manufacturing output and 48.58% of exports (Economic Survey 2025–26), stand to gain the most.

• One registration, one licence, one return: enterprises no longer deal with multiple departments for the same workforce. Contractors can obtain a single licence valid across States.
• Room to scale: standing-order certification and prior permission for lay-off, retrenchment and closure now apply at 300 workers, up from 100. Growing firms can expand without crossing a regulatory cliff too early.
• Fixed-term employment nationwide: firms can hire for projects and seasonal demand on transparent terms, while workers keep full parity.
• Model Standing Orders, 2026: ready-made templates for manufacturing, mining and services that small units can simply adopt.
• Digital compliance: electronic registers and filings cut costs and errors, especially for firms with lean HR teams.

As of March 2026, more than 7.9 crore enterprises were registered on the Udyam and Udyam Assist platforms, and the sector supports livelihoods for about 32.8 crore people. A simpler labour regime makes formalisation easier for each of them.

Women, safety and dignity at work

The OSH Code replaces 13 laws with one set of standards, and it widens opportunity for women while strengthening safety for all.

• Women on any shift, in any sector: women may work before 6 a.m. and after 7 p.m. with their written consent. Employers must provide safe transport, CCTV, well-lit amenities and comply with the POSH Act.
• Crèche support: establishments with 50 or more employees provide a crèche within 1 km or, where agreed, an allowance of at least ₹500 per child for up to two children.
• Preventive health: free annual health check-ups for workers aged 40 and above.
• Structured safety oversight: joint safety committees in factories with 500+ workers, construction sites with 250+ and mines with 100+, and safety officers in hazardous-process factories from 250 workers.
• Fair overtime: overtime is paid at twice the ordinary rate and capped at 144 hours a quarter, protecting workers from excessive hours.

These provisions support higher female labour force participation, which is central to the vision of Viksit Bharat.

Way forward

The reform is bold in vision, careful in execution and fair to both workers and enterprise. Industry stands ready to make it a success.

Through its Human Relations and Industrial Relations Committee, PHDCCI supports members with a compliance helpdesk, enterprise compliance audits and executive training for HR managers and legal counsel. To build on the momentum, PHDCCI suggests:

• Phased timelines and grace periods for micro and small enterprises adjusting to the new wage structure.
• Harmonised State rules and a single national compliance calendar for multi-State employers.
• Consultative fixation of the floor wage, with adequate lead time for wage-intensive sectors.
• Continued clarificatory FAQs on the wage definition and the treatment of past-service gratuity.

With these steps, the New Labour Codes can become a lasting foundation for higher productivity, decent work and a Viksit Bharat by 2047.