Labour Code Compliance Checklist for HR Managers (2026 Guide)

The Labour Code Compliance Checklist for HR Managers (2026 Guide) serves as an essential resource for HR professionals navigating India’s transformed labour landscape. With the implementation of the four new labour codes effective from November 21, 2025, the country has consolidated 29 central labour laws into a unified framework. This shift streamlines compliance, expands protections, and introduces digital processes, but it also demands proactive adaptation from HR teams.

As of 2026, the new labour codes, the Code on Wages 2019, the Code on Social Security 2020, the Industrial Relations Code 2020, and the Occupational Safety, Health and Working Conditions Code 2020 are in force, though central and state rules continue to finalize for full operational clarity. Employers face a transitional phase where existing provisions apply alongside new requirements, emphasizing labour law compliance in India to avoid labour law penalties India such as fines, backdated dues, or blacklisting from government contracts.

This comprehensive guide outlines a practical labour law compliance checklist 2026 tailored for HR managers, covering key areas like payroll, social security, workplace safety, and more. It helps mitigate non-compliance labour laws consequences while promoting best practices for sustainable operations.

Understanding the Four New Labour Codes and Their 2026 Implications

The four new labour codes India represent the most significant reform in decades, reducing fragmented laws, multiple registrations, and returns to simpler, often electronic systems.

• Code on Wages: Focuses on timely payments, uniform wage definitions, minimum wages, bonus, and equal remuneration.
• Code on Social Security: Extends benefits to organized, unorganized, gig workers, social security coverage, and platform workers, including PF, ESI, gratuity, and new schemes.
• Industrial Relations Code: Governs trade unions, standing orders, fixed-term employment, and dispute resolution.
• Occupational Safety, Health and Working Conditions Code: Ensures safe workplaces, regulates hours, leaves, migrant workers, and women’s employment.

These codes introduce uniform wage definitions India, expanded coverage for gig workers and migrants, fixed-term employees benefits, and digital tools like digital registers labour compliance and online filings labour laws.

Labour codes implementation 2026 brings challenges like payroll restructuring but opportunities for simplified compliance via single licenses and electronic returns.

Core Compliance Areas: A Step-by-Step Checklist

1. Wage and Salary Structure Compliance

Under the Code on Wages compliance, adopt the new uniform wage definition. Wages include basic pay, dearness allowance (DA), and retaining allowance, but exclusions (e.g., bonus, overtime) cannot exceed 50% of total remuneration (or a notified percentage). This triggers the 50% basic salary rule, new labour codes or basic + DA at least 50% wages.

• Ensure wage and salary structure compliance India aligns with this to avoid underpayment of PF, ESI, or gratuity.
• Comply with minimum wages compliance in India (state-specific) and the emerging national floor wage.
• Pay overtime at twice the ordinary rate (overtime payment rules labour codes).
• Issue wage slips and maintain records.

Best practice: Conduct a wage audit of new labour codes and restructure payroll for pay equity audit India.

2. PF and ESI Compliance India

PF and ESI compliance new labour codes remain critical under the Social Security Code.

• Register if thresholds met (e.g., 20+ for EPF, 10+ for ESI in some cases).
• Deposit EPF by the 15th and ESI by the 15th of the following month.
• Compute contributions on the new ‘wages’ definition.
• Extend to fixed-term employees and monitor gig workers social security benefits compliance.

Penalties for missing filings include interest, damages, and prosecution.

3. Minimum Wages, Bonus, Gratuity, and Maternity Benefits

• Adhere to minimum wage compliance India 2026, ensuring no employee falls below notified rates.
• Pay bonus under the Payment of Bonus Act provisions (8.33%–20% of wages).
• Calculate gratuity liability accurately, now applicable to gratuity for fixed-term employees after one year.
• Provide maternity benefits compliance India (26 weeks paid leave) and ensure no discrimination.

4. Working Hours, Leave, and Overtime Compliance

The Occupational Safety, Health and Working Conditions Code sets limits: typically 8 hours/day, 48 hours/week, with overtime caps.

• Track working hours compliance India 2026, including weekly off and leave entitlements.
• Allow night shift rules for women India with safety measures (consent, transport, etc.).
• Provide annual health checkups for employees over 40.

Maintain attendance wage overtime registers.

5. POSH Act Compliance and DEI

POSH compliance requirements remain vital (Sexual Harassment of Women at Workplace Act).

• Form Internal Complaints Committee (ICC).
• Conduct awareness sessions and handle complaints promptly.

Incorporate DEI compliance India labour laws, promoting diversity equity inclusion policy India and equal opportunities, including for transgender persons.

6. Contract Labour and Vendor Compliance

Contract labour act compliance holds principal employer accountability.

• Register if employing 50+ contract workers.
• Ensure vendors comply with wages, safety, and benefits.
• Provide parity for fixed-term employment benefits.

7. Social Security for Gig and Migrant Workers

Expanded social security gig workers includes schemes for life, disability, health, and maternity.

• Register platforms/aggregators.
• Facilitate benefits for inter-state migrant workers (appointment letters, protections).

8. Digital Record-Keeping and Filings

Embrace digital record-keeping compliance 2026, digital registers labour compliance, and electronic records labour codes.

• Use Shram Suvidha or similar portals for online filings labour laws.
• Maintain payroll, attendance, and overtime digitally.

9. Monthly, Quarterly, and Annual Compliance Tasks

Follow a statutory compliance calendar:

• Monthly: PF/ESI deposits (15th), TDS on salaries (7th).
• Quarterly: TDS returns (Form 24Q).
• Annual: Bonus payment, gratuity liability, Form 16 issuance, labour returns.

For multi-state operations, track professional tax compliance state-wise and multi-state labour compliance India.

10. Audits, Inspections, and Best Practices

Prepare for risk-based labour inspections and labour inspections India 2026 with HR compliance audit India.

• Conduct internal audits regularly.
• Digitize records and automate via compliance-ready HRMS platforms.
• Automate payroll compliance India and labour processes.

Labour law compliance best practices 2026 include structured calendars, proactive guidance, and expert consultation for HR compliance consulting India.

Consequences of Non-Compliance and How to Avoid Them

Non-compliance labour laws consequences range from financial penalties and interest to imprisonment, business blacklisting, and reputational damage. Backdated dues labour penalties can accumulate quickly.

Mitigate risks by staying updated on labour law updates India evolving 2026, building compliance confidence 2026, and partnering with advisors.

Special Considerations for Small Businesses, Startups, and MSMEs

Labour law compliance for small businesses India and new labour codes small businesses impact include simplified thresholds in some areas, but core obligations like minimum wages and safety apply universally.

Startups benefit from payroll compliance for startups India via automation, reducing manual burdens.

FAQs

What are the 4 labour codes in India?

The four codes are: Code on Wages 2019, Code on Social Security 2020, Industrial Relations Code 2020, and Occupational Safety, Health and Working Conditions Code 2020.

When will labour codes be implemented 2026?

They came into force on November 21, 2025, with full rules and operational aspects rolling out progressively in 2026.

Do fixed-term employees get the same benefits?

Yes, they receive parity in wages, social security, and other benefits as permanent employees, with gratuity after one year.

What is floor wage India?

A national minimum wage floor set by the central government, ensuring no worker earns below a basic living standard.

Who is an inter-state migrant worker?

A worker recruited from one state for employment in another, entitled to protections like appointment letters and welfare.

What is ESIC coverage of new rules?

Expanded pan-India, with contributions on wages; includes commuting accidents.

Do gig workers get social security?

Yes, through government-notified schemes under the Social Security Code, covering health, maternity, and more.

Can women work night shifts in India?

Yes, with safeguards like consent, security, transport, and no discrimination.

What happens if you do not comply with labour codes?

Penalties include fines (up to lakhs), imprisonment, interest on dues, and potential blacklisting.

How much gratuity increases new codes?

No direct increase, but calculation uses the new wages definition, potentially raising liability.

What records must be electronic labour codes?

Payroll, attendance, overtime, wages, and other mandatory registers, shifting to digital formats.

New labour codes impact HR 2026?

They require payroll restructuring, digital adoption, broader coverage, and proactive audits for seamless compliance.

By following this new labour codes HR compliance checklist, HR managers can ensure workplace compliance in India, foster positive employee relations, and position their organizations for growth in a reformed era. Regular updates and professional advice remain key to staying ahead.