29 Acts repealed
Replaced by four codes on 21 November 2025. Policies citing the old Acts point at law that no longer exists.
Source: Ministry of Labour, Four labour codes, in force 21 Nov 2025
Free PDF checklist
New Labour Codes Readiness Checklist for Indian Employers
The four codes replaced 29 Acts on 21 November 2025. This is what has to be true in your payroll and your paperwork now, with the source against every item, ending in twelve checks on one page.
- Twelve checks, ordered by what costs most
- Every item traced to a source we read
- Includes the Ministry FAQs nobody cites
Instant download. No card needed.
Attendo presents
New Labour Codes Readiness Kit
For Indian employers
12
checks on one page
ATTENDO PRESENTS
What's inside
Eight sections, and one page that matters
43 checkpoints across the eight sections, condensed to twelve at the end. Every one names the rule it comes from.
Sections 1 to 2
What changed, and who it covers
The four codes against the Acts they replaced, then the two thresholds that decide whether any of it applies to a given person.
Section 3
The 50% wages floor
A worked example, plus what goes into the test and what stays out. Overtime and benefits in kind are the two that catch people.
Sections 4 to 5
Leave, exits and changes
Accrual and carry-forward, the two-working-day settlement clock, and the twenty-one day notice a restructure needs.
Sections 6 to 7
Gratuity and paperwork
The fixed-term change and who pays for contract labour, then the documents that have to exist: wage slips, appointment letters, registers, standing orders and leave records showing refused leave separately.
Section 8
Twelve checks, one page
The whole thing condensed, ordered by what costs most to get wrong rather than by which code it came from.
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Evidence, not assertions
Attendo (formerly Petpooja Payroll) runs the wages test every month and keeps the record that proves it.
Why this matters
Most of what you will read is out of date
The codes were passed in 2019 and 2020 and commenced on 21 November 2025. Almost everything written in between describes them as proposals.
That gap matters more than it sounds. A summary written in 2021 could not tell you what the rules made under the codes would say, and the rules are where the operational detail lives. It also could not tell you how the Ministry would answer the questions employers actually had, and the Ministry has since answered a lot of them.
The single change worth understanding properly is the definition of wages. It is now common across all four codes and it carries a floor: if the allowances excluded from it come to more than half of total pay, the excess counts as wages anyway. That resets the provident fund base, the gratuity provision and the leave encashment rate together. Everything else on the checklist is paperwork by comparison.
Three things the Ministry has confirmed are worth knowing because commentary still argues about them. Overtime counts towards that 50% test, so a heavy month can push an employer over a line they clear normally. Benefits in kind count too, including food coupons and mobile recharge. And a more favourable state provision still applies to the employee even though the Code prevails where the two are inconsistent.
This checklist was built from the same sources as the rest of our library, read at origin rather than summarised. The wages definition is applied in our overtime calculation template, the leave rules in the leave encashment calculator, and the notice requirement in the increment letter kit.
Preview
Four codes, one change that costs
Three of the four mostly reorganise law you already followed. One of them changes arithmetic, and that is where the work is.
- Each row shows what the code replaced and the change that lands on what you pay or file.
- The checklist is grouped the same way, so you can work through one code at a time if that suits how your team is organised.
- Every item names its source, down to the section or the FAQ number, so nothing has to be taken on trust.
| Code | It replaced | Governs | Biggest change for you | Checks | Page |
|---|---|---|---|---|---|
| Wages, 2019 | Payment of Wages Act | Wages, payment timing | The 50% floor | 6 | 04 |
| OSH, 2020 | Factories Act | Leave, hours, workers | Carry-forward capped at 30 | 5 | 05 |
| Industrial Relations, 2020 | Industrial Disputes Act | Standing orders, notice | 21 days' notice to restructure | 4 | 06 |
| Social Security, 2020 | EPF, ESI, Gratuity | PF, ESI, gratuity | Fixed-term gratuity at 1 year | 4 | 07 |
| All four | Twelve | 12 | 09 |
Key stats
Three numbers behind the whole change
50% wages floor
The one change that moves money rather than paperwork. It resets the provident fund, gratuity and encashment base.
Source: Code on Wages 2019, s.2(y) proviso; MoLE FAQ, 16 Mar 20261 year for fixed-term gratuity
Down from five. A renewed eleven-month contract is now a gratuity question, not a way around one.
Source: Ministry of Labour, Additional FAQs, 16 Mar 2026, Q14 and Q19
Common mistakes
6 Labour Codes Mistakes Indian Employers Make
Reading a summary written in 2021
Most explainers describe the codes as forthcoming and predate the rules made under them. The rules are where the operational detail lives, and they were notified much later.
Treating the 50% rule as optional
It is not a target, it is a floor with an automatic add-back. Structuring around it stopped working when the codes commenced, and the base it sets feeds provident fund, gratuity and encashment at once.
Forgetting overtime and benefits in kind
Both count towards the test. The Ministry calls the second remuneration in kind, and gives food coupons, ration items and mobile recharge as examples. Perks that never touch a bank transfer still move the calculation.
Assuming state rules are gone
The Code prevails where a state provision is inconsistent, but an employee keeps a state benefit that is more favourable to them. Assuming otherwise underpays people who are entitled to more.
Applying worker rules to everyone
Managers and supervisors over ₹18,000 a month are outside the definition, and under ten workers the OSH Code does not apply at all. Both are worth settling before arguing about the detail.
Leaving fixed-term contracts unreviewed
Gratuity now accrues to a fixed term employee in one year. A renewed eleven-month contract that used to sit outside gratuity is now inside it, and the provision has to reflect that.
Comparison
What the summaries leave you with
A labour codes explainer
Written before they commenced
- Describes the codes as forthcoming
- Headline changes, nothing to action
- Silent on the rules made under them
- No mention of the Ministry's own answers
- Leaves you to work out what applies to you
Free either way
This checklist
Written after, from the sources
- Written for the law as it stands now
- Twelve checks you can work down
- Rules and gazette notifications read directly
- Quotes the FAQs of 16 March 2026 throughout
- Two thresholds up front, so you know what applies
Get the free checklist
Eight sections, twelve checks, every item sourced. Short form, instant download.
FAQ
Common questions
Is this labour codes checklist really free? +
Yes, completely. No card and no trial. The form asks for your name, work email, phone and city, then the file downloads straight away. The Attendo team may follow up about payroll software, and you are free to say no thanks.
When did the new labour codes come into force? +
21 November 2025. Four codes replaced 29 central Acts on that date, including the Factories Act 1948, the Payment of Wages Act 1936, the Industrial Disputes Act 1947 and the Payment of Gratuity Act 1972. Anything in your policies still citing those is pointing at law that no longer exists.
What is the 50% rule under the new labour codes? +
Wages now means basic pay plus dearness allowance plus retaining allowance. If everything excluded from that comes to more than half of total remuneration, the excess is added back and counts as wages anyway. It sets the base for provident fund, gratuity and leave encashment, so it is the change that moves real money rather than paperwork. Overtime and benefits in kind count towards the test.
Do the labour codes override state laws? +
Where a state provision is inconsistent with the Code, the Code prevails. But the Ministry has confirmed that an employee is still entitled to a benefit under state law where it is more favourable to them. So a state that allows more leave still gives more leave, and your state's rules are worth reading rather than assuming the Code replaced them.
Do fixed term employees now get gratuity? +
Yes, after one year under the contract rather than the usual five. The Ministry confirmed this in its FAQs of 16 March 2026. If you use fixed term contracts partly to avoid a five-year gratuity liability, that no longer works, and anyone on a renewed eleven-month contract is worth looking at.
A
About Attendo
Attendo, formerly Petpooja Payroll, is payroll and attendance software used by more than 40,000 businesses in India. It runs the wages test every month and keeps the record that proves it was run. See what it does, or browse all the free HR templates.
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Compliance you can show
The wages test run monthly, and the evidence kept without anyone remembering to.
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