What Should Employers Do Under the New Labour Codes?

A transition checklist lists the work an employer does once because the four Codes replaced the old Acts, in five groups: revising documents, updating registrations, recalculating wage bases, re-testing headcount thresholds and moving registers to the prescribed forms. A compliance checklist lists the work that repeats: paying wages, filing returns, depositing contributions, displaying notices and renewing licences.

The recurring duties continue under the Codes: paying on time, maintaining a register of persons employed and a muster roll, displaying a notice, and making deductions and deposits. Each duty now arises under a Code, and in several cases the form it takes has changed.

Which Labour Code duties apply to a company is decided site by site, and company-level headcount is not the applicable measure for most duties. Build one intake row per site, recording location, activity, employees, workers, contract labour, inter-State migrant workers and any people engaged through an app, then read each threshold against the column for the population it counts.

Kavita is the HR and admin lead at Sundale Foods Pvt Ltd, which has 210 people, about ₹1.40 crore of monthly payroll and three sites: a Hyderabad head office with 44 employees; a Medak factory with 152 people on power-driven lines, most but not all of them workers; and a 14-person Chennai sales branch. One housekeeping-and-packing vendor supplies 26 contract workers to the factory.

Under section 2(1)(v) of the Occupational Safety, Health and Working Conditions Code, 2020 (the OSH Code), a place where any industry, trade, business, manufacturing or occupation is carried on with ten or more workers is an establishment. For Chapter II, which governs registration, the second proviso to that clause provides that a place within sub-clauses (i) to (iii) is an establishment where ten or more employees are employed, whatever the worker count.

Whether the Central or a State Government's rules bind a site is a separate test, and the Form I row and the appointment-letter form both depend on it. Under section 2(3) of the Code on Social Security, 2020 the Central Government is the appropriate Government for an establishment having departments or branches in more than one State, so Sundale is in the Central sphere for that Code. Under section 2(1)(d)(ii) of the OSH Code, the appropriate Government for a factory, and for an establishment not otherwise specified, is the State Government where it is situated, and an Explanation removes doubt for factory safety. Sundale is therefore Central for social security and State for safety, wages and industrial relations, site by site, and which government's rules bind each establishment is settled before any form number is filled in.

The site counts exclude people engaged through an app rather than employed. They are gig and platform workers, for whom the Code on Social Security, 2020 prescribes separate coverage under the gig and platform worker provisions, and none of the OSH thresholds applies to them. Employees and workers are counted in separate columns, and the definitions of employee, worker and workman must be applied separately.

Appointment letters to employees already on the payroll were due by 21 February 2026, three months after commencement. Draft standing orders were due within six months of commencement, by 21 May 2026, but only for an establishment that had 300 or more workers then. Registration particulars for an establishment already registered under an older central labour law are due in Form I by 8 November 2026, six months from the date the Central Rules came into force. The remaining items depend on numerical thresholds rather than fixed transition dates.

Appointment letters, 21 February 2026. Section 6(1)(f) of the OSH Code requires every employer to issue a letter of appointment to every employee on appointment, and adds that where an employee has not been issued one on or before the commencement of the Code, he shall be issued one within three months of that commencement. Commencement was 21 November 2025, so the three months expired on 21 February 2026. The Code itself contains the duty and the three months, so they applied in every State from the same day. The appropriate Government prescribes what the letter must contain, and the form it takes, under section 133(2)(g) of that Code.

Draft standing orders, 21 May 2026. Section 30(1) of the Industrial Relations Code, 2020 gives an employer six months from commencement to prepare draft standing orders and forward them for certification. Chapter IV applies to an industrial establishment with 300 or more workers employed, or employed on any day of the preceding twelve months, under section 28(1). An employer below that number on 21 November 2025 was never subject to that transition period. An employer who crosses 300 later has a fresh six months under section 30(4), running from the date the Chapter becomes applicable to it. Standing orders already in force on commencement continue, and section 30(11) deems them certified under section 30(8), so an employer who already had certified standing orders does not re-certify them.

The Form I update, 8 November 2026. Section 3(8) of the OSH Code deems an establishment already registered under a Central labour law to be registered under the Code, subject to the holder providing the details of registration in the prescribed time and form. Rule 3(6) of the OSH (Central) Rules, 2026 prescribes the form and the time: the registration particulars are updated in Form I within six months from the date the rules come into force. The rules were published on 8 May 2026, so the six months end on 8 November 2026.

Section 3(1)'s sixty days runs from the date the Code becomes applicable to a new establishment, not from the Code's commencement, so it applies to almost no establishment already trading in November 2025. Section 3(4)'s thirty days runs from each change, so the intimation falls due again with every change and belongs on the recurring list.

For Sundale, the appointment letters are late and the Form I update is open; the standing-orders item never applied, because a site of 152 people cannot have 300 workers.

Under the new labour codes HR should review and revise the appointment letter, the employment contract, the fixed-term contract, and every policy that names a repealed Act. Section 6 of the OSH Code requires a letter of appointment for every employee in the prescribed form, so an appointment letter is mandatory for everyone on the payroll. A contract is revised for the legal employer's name, the category of work, and the wage components the payroll uses. A policy is revised by replacing the citation of the repealed Act, and its substance is changed wherever it quoted a threshold that has changed. The evidence for the appointment letter is a signed acknowledgement per person, filed against the payroll register, and each other document has its own. A transition file has to show what changed as well as what is now true, so keep the superseded version of every document with its name, the date it was replaced and who approved the replacement.

Each row's done-test is one yes-or-no question answered by a document, such as whether the acknowledgement count equals the payroll headcount. "Appointment letters issued" states no count, so it does not answer that question.

Section 2(1)(t) of the OSH Code defines an employee as a person employed on wages to do skilled, semi-skilled, unskilled, manual, operational, supervisory, managerial, administrative, technical, clerical or any other work. It excludes an apprentice engaged under the Apprentices Act, 1961. So Kavita's test is 210 acknowledgements against 210 on the payroll register, and it includes the supervisors and managers, and excludes any apprentice.

A fixed-term employee is entitled to gratuity on a pro-rata basis when the fixed term expires after one year of continuous service under that contract, and the trigger is expiry of the term, not resignation. Section 53(1)(d) of the Code on Social Security, 2020 makes termination of the contract period under fixed-term employment a gratuity event, the second proviso to section 53(1) removes the five-year requirement for it, and the second proviso to rule 33(1)(a) of the Social Security (Central) Rules, 2026 prescribes the one year. Sundale is in the Central sphere for that Code, so rule 33 binds it.

Section 43 of the OSH Code entitles women to be employed in all establishments for all types of work and permits night work with consent, subject to conditions prescribed by the appropriate Government; a woman may work at night with her written consent and only where the employer provides the prescribed safeguards. Rule 83 of the OSH (Central) Rules, 2026 sets the Central conditions, and a State may set its own. Name the person who checks consent and the prescribed safeguards for each woman rostered at night.

The one payroll transition item is the re-test of each pay structure against the statutory wage definition in section 2(y) of the Code on Wages, 2019. Section 2(y) sets no rule about CTC and does not make a 50% basic salary mandatory, and running the test does not by itself change any employee's take-home pay. The test is run once per pay structure, not per employee, so Kavita runs it four times for Sundale's four structures, and each run is closed by a dated computation sheet approved by whoever signs payroll.

Section 2(y) includes basic pay, dearness allowance and retaining allowance, then excludes eleven categories. Under the proviso, where the payments under clauses (a) to (i) exceed one-half of all remuneration, or such other percentage as the Central Government notifies, the excess is deemed remuneration and added into wages. Gratuity and termination payments, clauses (j) and (k), are excluded from that calculation.

The figures the re-test produces determine contribution amounts. The wage ceiling for Chapter III of the Code on Social Security, 2020 is ₹25,000 per month from 17 September 2026 under S.O. 5109(E), which supersedes the earlier ₹15,000 notification for that Chapter alone. Recheck membership for employees newly within the ceiling, including eligible contractor employees, and recalculate capped contributions from the effective date. Keep the wage-base computation separate from this ceiling change; the notification changes neither the contribution rates nor Chapter IV's ESI position.

The computation sheet records each structure's name, the headcount on it, the components tested, the add-back result, the effective month, and who prepared and approved it. The proviso is drafted on amounts, so relabelling an allowance does not take its payment out of the add-back. Running the test against cost to company rather than against remuneration under section 2(y) produces a figure that does not answer the section 2(y) test, because CTC includes the employer's own contributions.

An establishment already registered does not register again under the new labour codes: section 3(8) of the OSH Code deems the existing registration valid, and rule 3(6) instead requires the particulars to be updated in Form I, by 8 November 2026. The update needs data from the establishment's own record, the contractor register, the payroll headcount, and the provident fund and employees' State insurance coverage dates. A licence obtained under an earlier central law stays valid for the period it was issued for, and an application afresh is made only when it expires. For the registration, the evidence of completion is the acknowledgement number and the updated certificate; for a licence, it is the licence copy and a dated expiry schedule.

Form I is headed "Application for registration of establishment / Amendment to certificate of registration / Updation of registration particulars of establishments already registered under any other Central Labour Laws", so the same form serves for registration, for amending a certificate and for updating an existing registration. Under rule 3(1) it is filed electronically on the Shram Suvidha portal or a portal designated by the Central Government. The form requires the total employees engaged directly, the total contract employees and the total inter-State migrant workers, so the site intake must be completed before the Form I update.

On the Shram Suvidha portal screens as at May 2026, these Form I fields cannot be edited after filing: PAN, the name as per PAN, the date of birth or incorporation, the ownership type and sector, the activity classification and the provident fund and employees' State insurance coverage dates. The maximum-workers figure can be raised but not reduced below the recorded value. That is the portal's behaviour in May 2026 rather than a rule, and it changes with a portal release. Record the maximum number of workers the establishment will reach, not today's count. A change afterwards is a separate thirty-day intimation under section 3(4) and rule 3(8).

Under rule 3(2), on a complete application a certificate of registration in Form III is issued forthwith and in any case within seven days, and where it is not, the establishment is deemed registered and the certificate is auto-generated. The proviso to section 3(3) makes the registering officer responsible for that failure. The same seven days and the same auto-generation apply to an amended certificate under rule 3(8).

Part I of Chapter XI applies to an establishment employing fifty or more contract labour, or which employed that number on any day of the preceding twelve months, and a manpower-supply contractor at the same number, under section 45(1). The fee table in rule 90(4) states that no licence is required up to 49 contract labour. At 26 contract labour, Sundale's factory is below that number, and Kavita records the count and the date on which she determined it. Section 45(2) excludes an establishment where only intermittent or casual work is performed, and the appropriate Government decides that question finally; under the Explanation, work performed for more than 120 days in the preceding twelve months, or seasonal work performed for more than 60 days in a year, is not of an intermittent character.

Rule 3(4) requires the certificate of registration to be non-transferable and displayed at a conspicuous place inside the premises. Rule 3(7) requires the registration number to be quoted on every document prepared under the rules and in all correspondence with the office concerned, which means changing a letterhead and a template; nothing is filed.

Re-test once the counts of employees, workers, contract labour, women working night shifts and inter-State migrant workers, because the Codes set their thresholds on different populations, and which labour code thresholds apply to a company depends on which of those populations a provision counts. Use the highest number reached on any day in the preceding twelve months where the provision so provides, not today's headcount. Record each count with the date it was taken and the source register, and name in the row itself the events that trigger a recount: a new site, a new State, a new vendor, a seasonal peak, and the twelve-month look-back falling due again.

Suresh is a packing supervisor at the Medak factory on ₹22,000 a month. Section 2(1)(t) of the OSH Code makes him an employee, so he is owed an appointment letter and he is counted in the 210. Section 2(1)(zzl)(iv) excludes from the definition of worker a person employed in a supervisory capacity drawing wages above ₹18,000 a month, so he is not in the factory's worker count while still being counted in its headcount of 152. Managers and administrative staff are excluded by clause (iii) on the same footing.

For Sundale, the contract-labour, Works Committee and standing-orders tests give no; record the reason for each. Section 3(1) of the Industrial Relations Code, 2020 lets the appropriate Government, by general or special order, require an employer with 100 or more workers to constitute a Works Committee, and the duty arises from the order. Section 4(1) makes a Grievance Redressal Committee compulsory at twenty or more workers with no order needed, with equal employer and worker members, not more than ten in all, and women represented in at least their proportion of the workforce. Assess the committee and standing-order requirements, including standing orders at 300 workers, separately from the 300-worker threshold for lay-off, retrenchment and closure.

Whether the Hyderabad office is an industrial establishment depends on two definitions in the Industrial Relations Code, 2020. Section 2(p) defines industry as any systematic activity carried on by co-operation between an employer and worker for the production, supply or distribution of goods or services, and section 2(r) makes an establishment in which any industry is carried on an industrial establishment. A head office that supplies and distributes a food company's goods falls within that definition. So for the office, the result depends on how many of its 44 are workers once managers, administrative staff and supervisors above ₹18,000 are excluded.

Section 59 of the OSH Code applies Part II to an establishment with ten or more inter-State migrant workers employed, or employed on any day of the preceding twelve months. Section 2(1)(zf) covers a person recruited in one State for an establishment in another, and a person who came on his own from one State, obtained employment in an establishment of the destination State or changed establishment within it. Both limbs need wages of not more than ₹18,000 a month or a higher notified amount.

The registers that must be maintained under the new labour codes are the ones employers already keep, and the attendance-cum-muster roll, wage register, overtime register and register of fines and deductions continue in force. Their form and the rules that prescribe it change, since each of the four Central Rules of 8 May 2026 prescribes its own new labour code forms and returns. Where a row's form comes from a State that has not notified its final rules, mark the row blocked rather than done, name the instrument awaited, and give it a review date. To keep the records continuous, close the old register on a stated date, open the new one, and record the closing entry, the date, who authorised the change, the storage location and access control for the electronic set. Whether the registers are electronic or physical is the employer's choice, and the basic wage records are preserved for five years.

The savings clause in each repealing Code is the reason to keep the old records. Section 69(2) of the Code on Wages, 2019 deems anything done under the Payment of Wages Act, the Minimum Wages Act, the Payment of Bonus Act and the Equal Remuneration Act to be done under that Code. Section 143(3) of the Occupational Safety, Health and Working Conditions Code, 2020 does the same for the thirteen Acts it repealed, including the Factories Act, and adds that a rule or regulation made under them stays in force so far as it is not contrary to the Code, until repealed by the Central Government. Section 164(2)(a) of the Code on Social Security, 2020 does the same for the nine social security Acts. For a State-sphere employer whose State has not notified rules, under that part of section 143(3) the State's factory rules and forms remain in force. Under section 59 of the Code on Wages, the burden of proving that dues were paid lies on the employer whenever a claim is filed for non-payment or short payment of wages or bonus, or for an unauthorised deduction, and the employer's registers, old and new, provide the evidence of payment in unpaid-wage claims.

Section 50(2) of the Code on Wages, 2019 fixes the notice board's contents: the abstract of the Code, the category-wise wage rates of employees, the wage period, the day or date and time of payment of wages, and the name and address of the Inspector-cum-Facilitator having jurisdiction. Section 50(4) disapplies the duties in section 50(1) to (3) for an employer only to the extent he employs not more than five persons for agriculture or domestic purpose, and even that employer must produce reasonable proof of payment on demand.

A transition row is finished when a named person can hand an inspector one document that proves it. To make a labour code compliance checklist auditable, give every row the item, the instrument it arises under, the owner by name, the evidence artefact, the done-test, and the date it closed. For the appointment letters, the document that answers the done-test reads "Acknowledgement count equals payroll headcount, 210 against 210, on 12 October 2026".

Sundale's file records one item from each group with its instrument, evidence and status:

Every row has exactly one status: closed, with a date; open, with the date it is due; not applicable, with the reason and the count; or blocked, on a named instrument with a review date. A blocked status records for an inspector why an item remains incomplete, and a not-applicable status needs its count for the same reason.

The file has one folder per group, one sub-folder per site, and a single index listing every row with its evidence path. A successor who opens the index should be able to find any artefact from it without asking anyone where it is.

Where an employer has missed a labour code deadline, issue the document late and record the date. A late appointment letter does not make the missed period compliant, but it ends the period of non-compliance, and the dated acknowledgement is the evidence of the date it ended. For registration particulars filed after the six months, rule 3(3) of the Central Rules provides for a late fee, and the amount is set by a separate government order rather than by the Rules themselves. Put a one-paragraph note in the transition file in front of the evidence, recording what was missed, when it was noticed, what was done and on what date, and who approved the note.

Under section 110(1) of the OSH Code, the Inspector-cum-Facilitator must give an employer an opportunity to comply with the relevant provisions within thirty days of a notice, and where the employer complies within that period, no prosecution proceeding shall be initiated. Section 110(1) excludes an accident, and a violation of the same nature repeated within three years of the first.

Where a contravention has already occurred, section 114(1) lets a penalty or offence be compounded, before or after an enquiry or a prosecution, at fifty per cent of the maximum penalty or seventy-five per cent of the maximum fine. Composition discharges the person and ends the proceedings under section 114(2). The compounding is done by an officer of the appropriate Government as notified by that Government, and the Central Government has notified no compounding officer under section 114, so an employer in a State sphere checks its own State's notifications for a compounding officer. Section 114(5) excludes from composition a second or subsequent penalty or offence within three years of one already compounded or convicted.

Section 6 provides no penalty of its own for not issuing appointment letters, so a late letter falls under the general penalty in section 94 of the OSH Code. That section imposes a monetary penalty on the employer or principal employer, with a further daily amount if the contravention continues after conviction; it carries no term of imprisonment. In practice, the outcome is no action, because the appointment letter had been issued before enforcement action began; a compounded penalty; or a prosecution.

The transition is finished when every row reads closed, not applicable with a count, or blocked with a named instrument and a review date. The transition checklist is then closed, and the recurring compliance checklist and a short watch-list of the rows left blocked replace it. Review the blocked rows monthly until each named State instrument is issued. A standing review cycle is a separate exercise from the transition checklist. Name who holds the transition file afterwards, say where it is kept, and put the index at the front so a successor reads the rows before the artefacts.

A closed row is reopened, rather than a new checklist started, on a new establishment, a new State, a first contractor, a first inter-State migrant worker, and crossing twenty, fifty, one hundred or three hundred workers. Each requires a new establishment intake and threshold assessment.