New Labour Codes Explained: When Will You Get a Salary Hike & When Can You Be Fired? Government Issues Detailed Checklist

The Ministry of Labour and Employment has issued a comprehensive compliance checklist to help employers meet their legal obligations under India’s four new labour codes as businesses adjust to the unified legal framework.

This handbook clarifies employer duties on timely wages, safety standards, social security contributions, event-based reporting and more, aiming to tighten accountability and reduce disputes during the transition from the older labour laws to the new codes.

Officials say the checklist spells out key requirements that many businesses may already know but now must follow with clear timelines and procedures.

What Are the Four New Labour Codes 2026?

The four labour codes that now govern employer obligations are:

• Code on Wages, 2019 — standardises wage definitions and payment requirements
• Industrial Relations Code, 2020 — covers hiring, layoffs, retrenchments and dispute resolution
• Code on Social Security, 2020 — extends provident fund, gratuity, insurance and maternity benefits
• Occupational Safety, Health and Working Conditions Code, 2020 — handles workplace safety, conditions and welfare

These codes replaced 29 older central labour laws in November 2025 in a major reform aimed at simplifying compliance while protecting worker rights.

New Labour Codes: Core Requirements for Employers

Officials describe the checklist as a practical to-do list for employers to avoid compliance gaps during the transition. It breaks down duties into core, monthly, annual and event-based requirements employers must follow.

Foundational (Start of Business or Joining of a New Employee)

Employers must immediately:

• Register the establishment and obtain necessary licences.
• Create key records on attendance, wages, deductions, and overtime.
• Set wage periods and ensure minimum standards are defined.
• Ensure basic workplace safety standards are in place and health rules are followed.
• Enroll eligible workers in social security schemes like EPFO and ESIC.
• Form work committees and grievance redressal cells.

These steps set the legal framework for day-to-day operations under the new labour regime.

New Labour Codes: Monthly Obligations Employers Must Complete

Every month, businesses must make sure they:

• Pay wages on time to all workers within scheduled pay cycles.
• Deposit social security contributions with the Employees’ Provident Fund Organisation (EPFO) and Employees’ State Insurance Corporation (ESIC).
• Issue wage slips to employees showing details of pay and deductions.

These regular obligations are central to maintaining a compliant employer–employee relationship.

New Labour Codes: Annual Compliance Checklist

Each year, establishments must:

• File a unified annual return that covers all applicable codes.
• Update minimum wage rates where revisions apply.
• Renew licences and permits required under various labour rules.
• Conduct safety audits at workplaces.
• Arrange annual health check-ups for specified workers aged 40 and above.

This annual cycle helps institutionalise safety, fair pay and worker welfare.

New Labour Codes: Event-Based Compliance Requirements

Certain events trigger specific duties that employers must fulfil within defined timeframes:

• Report workplace accidents or disease outbreaks to authorities within 24–72 hours.
• Settle final dues to departing employees within two days and pay gratuity within 30 days.
• Obtain government permission for layoffs, retrenchment or closure in units with more than 300 workers.
• Extend maternity benefits where applicable.
• Issue notices to workers and authorities in cases of lockout or strike.

These event-based requirements ensure that sudden or disruptive incidents are handled legally and transparently.

New Labour Codes: When Will You Get A Raise?

The labour codes do not automatically guarantee annual salary hikes. However, they strengthen wage transparency. Under the Code on Wages, employers must:

• Pay at least the notified minimum wage
• Follow clear wage definitions
• Avoid unlawful deductions

If the government revises minimum wages annually, employers must update pay accordingly. This means workers earning at or near minimum wage levels may see increases when rates change.

Promotions and performance-based raises remain company-driven decisions. However, stricter wage compliance ensures employees receive legally mandated revisions without delay.

New Labour Codes: When Will You Get Fired?

The Industrial Relations Code sets clearer rules for termination, retrenchment and layoffs. Employees can face termination due to:

• Misconduct or disciplinary action
• Business restructuring
• Financial distress

However, employers must follow due process. In establishments with more than 300 workers, companies must obtain government approval before retrenchment, layoffs or closure.

Employers must also:

• Provide notice periods
• Settle final payments quickly
• Pay gratuity within 30 days if eligible

These provisions aim to prevent arbitrary job losses and ensure compensation transparency.

New Labour Codes: Why the Checklist Matters for Employers?

According to government officials, the handbook aims to remove ambiguity that arose during the transition from older labour laws to the consolidated codes. The ministry said it will “act as a to-do list for establishments to ensure that no evasion on compliances happens for lack of clarity due to the transition from the old labour laws to the new labour codes.”

With clear timelines and defined procedures, businesses can plan compliance steps early, reducing the likelihood of litigation or penalties later. The checklist also supports efforts to modernise labour law enforcement, enhance worker protection and streamline legal obligations under one framework rather than a scattered set of dozens of laws.