The New Labour Codes are set to bring significant transformations in India's labour laws, impacting businesses, employees, and compliance frameworks. These reforms aim to streamline and simplify existing regulations while ensuring worker welfare. For businesses, adapting to these changes is crucial to avoid legal complications and maintain smooth operations. In this guide, we will explore the key compliance changes under the New Labour Codes and how businesses can stay compliant.

Understanding the New Labour Codes

The Indian government has consolidated 29 existing labour laws into four broad codes:
The Code on Wages, 2019 – Covers wage regulations and aims for uniformity across industries.
The Industrial Relations Code, 2020 – Governs employer-employee relations and dispute resolution.
The Social Security Code, 2020 – Focuses on social security benefits like pensions and insurance.
The Occupational Safety, Health and Working Conditions Code, 2020 – Ensures workplace safety and well-being.

These codes are designed to create a more organized and employer-friendly regulatory environment while improving labour rights.

Key Compliance Changes Businesses Must Know

1. Changes in Wage Structure 

One of the most significant aspects of the New Labour Codes is the revision in wage definitions. Businesses must understand the new wage structure in India, which mandates that at least 50% of an employee’s compensation must be considered as the basic wage. This change affects take-home salaries, provident fund contributions, and gratuity calculations.

2. Social Security and Employee Benefits

The Social Security Code expands social security coverage to gig workers, platform workers, and contract employees. Businesses must now contribute towards their welfare, ensuring benefits like provident funds, maternity leaves, and gratuity are extended to all eligible workers.

3. Working Hours and Overtime Regulations

Under the New Labour Codes, working hours and overtime calculations are restructured. The maximum daily working hours are capped at 12, and weekly working hours remain at 48. Employees working overtime will be entitled to higher wages, ensuring fair compensation.

4. Employer Obligations

Under the Industrial Relations CodeThe Industrial Relations Code introduces new provisions for dispute resolution, layoffs, and termination procedures. Establishments with over 300 workers must seek government approval before layoffs or retrenchments. Businesses should update their policies accordingly to comply with these legal requirements.

How Businesses Can Stay Compliant ?

Conduct a Compliance Audit: - To stay updated with the latest labour law changes, businesses must conduct a comprehensive compliance audit. Identifying gaps in current policies and making necessary updates will help avoid penalties.

Update HR Policies and Employment Contracts: - With the introduction of the New Labour Codes, organizations should revise HR policies, employee contracts, and payroll structures to align with the new regulations. Clear communication with employees regarding wage revisions, working hours, and benefits is essential.

Leverage Digital Compliance Solutions: - Using technology-driven platforms like Digiliance can simplify compliance management. The Digiliance guide to new labour codes provides automated tracking of regulatory changes, ensuring businesses remain legally compliant without manual intervention.

Seek Expert Guidance: - Labour laws are complex, and staying compliant requires continuous monitoring. Employers should visit Digiliance for expert insights on new labour laws, ensuring they receive accurate guidance on adapting to the latest reforms.

Conclusion

The New Labour Codes bring fundamental changes to business operations, wage structures, and employee welfare. Businesses must proactively read the complete guide on India’s labour reforms to ensure compliance and protect both their workforce and their legal standing. Read about the latest labour law changes on Digiliance to stay ahead in compliance management and make informed decisions that benefit both employers and employees alike.