Compliance

New Labour Codes 2025: What Every Indian SME Must Do Now

New Labour Codes 2025: What Every Indian SME Must Do Now
ADMIN03 Sep 2026Compliance

The four new Labour Codes — the Code on Wages, the Industrial Relations Code, the Social Security Code, and the Occupational Safety, Health and Working Conditions Code — consolidate a tangle of older legislation. Most growing companies are not yet fully compliant.

The change is not cosmetic. Definitions of "wages" shift, which affects PF, gratuity and leave encashment. Thresholds move. Documentation expectations rise. For a company running payroll on a single spreadsheet and one person's memory, that is a lot of exposure building quietly in the background.

What actually changes for an SME

  • A revised definition of wages that can raise your PF and gratuity liabilities
  • New registration and return requirements across the four codes
  • Tighter rules on working hours, leave and contract labour
  • Stronger documentation and record-keeping obligations

What to do now

Start with a compliance position assessment: where are you against each code today, and what is the gap? Then implement the specific changes your headcount, state and industry require — payroll structure, policy updates and filings. This is exactly the kind of quiet risk an HR Audit surfaces before it becomes a notice.

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