Labour Codes compliance checklist for employers in India
This Labour Codes compliance checklist for employers in India covers registration, appointment letters, on-time wages, statutory items on the new wage definition, PF and ESI cover for eligible staff, free health check-ups, and timely exits. The Ministry's handbook groups duties into day-one, monthly, annual and event-based tasks.
At a glance
- Day one: register the establishment, display notices, keep basic registers, fix a wage period, start PF and ESI where eligible.
- Monthly: pay wages on time, deposit PF and ESI, issue wage slips.
- Yearly: file the unified annual return, update minimum wages, renew licences, run health check-ups.
- On events: report accidents, issue appointment letters, settle final dues on exit.
Labour Codes compliance checklist for employers
- Registration: 10 or more employees need electronic registration under the OSH Code within 60 days; already-registered establishments intimate details.
- Appointment letters for every employee, including fixed-term staff.
- Wage definition: map each component to wages as defined (50% rule); check gratuity, PF and bonus bases.
- Pay dates: daily, weekly, fortnightly or monthly within the Code's deadlines.
- Records: attendance, wage, overtime and deduction registers kept for five years; wage slips on or before payment.
- PF and ESI: coverage at 20 and 10 employees; recheck new hires (coverage).
- Fixed-term contracts: written, with parity in pay and benefits (guide).
- Health check-ups for eligible workers and welfare facilities.
- Exit process: two working days for wages, gratuity in 30 days (F&F).
- Committees: Grievance Redressal Committee at 20 or more workers; standing orders at 300 or more in industrial establishments.
If you have no Indian entity
A US company without an Indian entity can use an employer of record. See employer of record in India and how to hire in India.
Penalties
First-time fine-only offences can be compounded, and the Social Security Code gives 30 days' notice for compliance before legal action. This is not a safe harbour; follow the Code.
Stay current
Read rules status and state variations.
What the Ministry says changed, in numbers
The Ministry's handbook says 29 central labour Acts were consolidated into four Labour Codes. It gives these comparisons for the draft rules and forms under the codes:
| Item | Before | Under the Labour Codes |
|---|---|---|
| Sections | 1,228 | 480 |
| Rules (draft) | 1,436 | 351 |
| Returns | 31 | One electronic return |
| Forms | 181 | 73 |
| Registers | 84 | 8 |
Compounding of offences and improvement notices are introduced for the first time, which the handbook describes as a facilitative approach to compliance.
Wage payment deadlines
| Wage period | The Code on Wages deadline |
|---|---|
| Daily | At the end of the day |
| Weekly | On the last working day of the week |
| Fortnightly | Before the end of the second day after the fortnight |
| Monthly | Before the expiry of the seventh day of the next month |
| On leaving the job | All dues within two working days (resignation, dismissal or termination) |
Deductions, bonus and records
- Deductions must be authorized under the Code, and the handbook says they must not exceed 50 percent of wages in the wage period.
- Bonus goes to employees within the notified wage limit who worked at least 30 days in the accounting year, at a minimum of 8.33 percent and up to 20 percent of wages earned.
- Attendance, wage, overtime and fines and deductions registers can be kept on paper or electronically and are preserved for 5 years.
- Notices in English, Hindi and the local language must show the minimum rate of wages, normal working hours, wage period, wage payment date and the Inspector-cum-Facilitator.
Common mistakes
- Treating the Code as optional until state rules are final. The Ministry's FAQ says old rules stay in force during the transition only to the extent they are in line with the Codes.
- Mapping pay components to "wages" without the 50 percent test. Overtime allowance forms part of the 50 percent calculation, according to the March 2026 FAQs.
- Missing the two-working-day exit payment.
- Skipping appointment letters for fixed-term staff.
- Forgetting that the handbook primarily covers establishments for which the Central Government is the appropriate government.
More questions employers ask
Do the codes apply to my state?
For many employers the appropriate government is the state. Check your state's notifications and see rules status and state variations.
Who inspects?
The handbook refers to an Inspector-cum-Facilitator. Their name must appear on the notice board.
Sources
- Ministry of Labour and Employment, Compliance Handbook for Employers under the Four Labour Codes (Central Government sphere), https://www.labour.gov.in/static/uploads/2026/02/83978455025732b99b0165def80ab171.pdf, checked 2026-10-31
- The Occupational Safety, Health and Working Conditions Code, 2020 (official text), https://www.labour.gov.in/static/uploads/2025/07/36fcfa5d8e6b9145e282bf7b950d6c47.pdf, checked 2026-10-31
- The Code on Social Security, 2020 (official text), https://www.labour.gov.in/static/uploads/2025/07/b0620548445580767b5c0d18c95c26f7.pdf, checked 2026-10-31
- PIB, India's Labour Reforms: Simplification, Security, and Sustainable Growth (21 Nov 2025), https://www.pib.gov.in/PressReleasePage.aspx?PRID=2192524®=3&lang=2, checked 2026-10-31
- Ministry of Labour and Employment, Compliance Handbook for Employers under the Four Labour Codes (Central Government sphere): https://www.labour.gov.in/static/uploads/2026/02/83978455025732b99b0165def80ab171.pdf (accessed 31 October 2026)
- Ministry of Labour and Employment, Additional FAQs on Labour Codes (as on 16 March 2026): https://www.labour.gov.in/static/uploads/2026/03/a4ccf4c6d97c4f1f36a6d83f8c64213d.pdf (accessed 31 October 2026)
- Press Information Bureau, India's Labour Reforms backgrounder (21 November 2025): https://www.pib.gov.in/PressReleasePage.aspx?PRID=2192524®=3&lang=2 (accessed 31 October 2026)
This is general information, not legal, tax or immigration advice. Rules change and your situation may differ. Consult a licensed attorney or qualified adviser.