What changed
The Codes consolidate 29 central laws. The Code on Wages covers the subjects of the Payment of Wages, Minimum Wages, Payment of Bonus and Equal Remuneration Acts. The Code on Social Security covers provident fund, ESI, gratuity and maternity benefit. The Industrial Relations Code covers industrial disputes, trade unions and standing orders. The OSH Code covers factories, contract labour and other workplace laws.
The Codes use a common definition of “wages”: basic pay, dearness allowance and retaining allowance, with certain items excluded. If the excluded items exceed 50% of total pay, the excess is added back to wages. This affects PF, gratuity, bonus and other calculations. Under the Code on Social Security, the five-year service condition does not apply to gratuity on the expiry of fixed-term employment, and fixed-term employees get gratuity pro rata. The Government’s announcement describes this as gratuity after one year of service.
Draft central rules under the Codes were published for comments on 30 December 2025. The Labour Ministry’s FAQs say that until new rules are notified, existing rules continue to the extent they are consistent with the Codes. Several follow-on notifications have since been issued, such as the bonus limits (August 2026) and the EPF wage ceiling (September 2026).
Under the Code on Wages, minimum wages apply to all employees, not only to scheduled employments, and wages for a monthly wage period must be paid by the 7th of the following month. On removal, dismissal, retrenchment or resignation, the wages due must be paid within two working days (Section 17). The OSH Code requires an appointment letter to every employee, and the Codes provide for registers and returns in electronic form.
Who is affected
All employers and employees.
Effective dates
| Item | Date or period |
|---|---|
| Codes passed by Parliament | 2019 (Code on Wages) and 2020 (other three Codes) |
| In force | 21 November 2025 |
| Draft central rules published | 30 December 2025 |
What to do now
- Recompute “wages” for each salary structure using the 50% add-back.
- Review gratuity provisions for fixed-term employees.
- Update registers, returns and appointment documents as State and central rules are notified.
Penalty or consequence if missed
The Codes replaced most prison terms for first offences with fines. Under Section 54 of the Code on Wages, paying less than the amount due attracts a fine of up to ₹50,000 and other contraventions up to ₹20,000, with imprisonment or a higher fine for a repeat offence within five years; for most other contraventions the Inspector-cum-Facilitator must first give a written direction to comply. Offences not punishable with imprisonment can be compounded under Section 56 for 50% of the maximum fine, on an application by the employer. The other Codes have their own penalty and compounding sections.
Official source
- PIB release, 21 November 2025: the four Labour Codes made effective
- Code on Social Security, 2020 (text)
Effective: 21 Nov 2025 · Note published · Last reviewed
Related on this site
This note summarises a public notification for general information. It is not professional advice and does not cover every condition or exception, and the rule can change again by a later notification. Read the notification itself before acting on it, or consult a qualified professional on your own facts.