India's Four Labour Codes: Where Things Actually Stand in 2026

Most businesses operating in India have heard some version of the phrase “the new labour codes” more times this year than they’d like. What used to be twenty nine separate central laws, some dating back to the 1930s and 40s, have now been folded into four codes. The Code on Wages, the Industrial Relations Code, the Code on Social Security, and the Occupational Safety, Health and Working Conditions Code. All four were notified as effective law on the twenty first of November 2025, and the old laws they replace, things like the Industrial Disputes Act, the Factories Act, the Minimum Wages Act, and the Provident Funds Act, are technically gone now. But here’s the part that trips a lot of companies up. Just because a code has been notified doesn’t mean every single provision inside it is actually working yet. A lot of it depends on whether the relevant state has caught up with its own rules, which, as this piece gets into, varies wildly depending on where in the country a business is operating.

Here’s a walk through each code, what it actually changes, and then how the rollout looks depending on which city a company is based in.

1.1 The Code on Wages

This one merges four older laws, the Payment of Wages Act, the Minimum Wages Act, the Payment of Bonus Act, and the Equal Remuneration Act, into a single framework covering how people get paid, minimum wage standards, and bonuses.

The biggest practical change here is a new definition of what actually counts as wages. Under the new rule, basic pay, dearness allowance, and retaining allowance all count as wages. Things like house rent allowance, conveyance, overtime, bonus, and provident fund contributions can be excluded, but only up to a point. If those exclusions add up to more than fifty percent of an employee’s total pay, the extra amount gets treated as wages anyway for the purposes of calculating things like gratuity and provident fund. For companies that structured salaries specifically to keep basic pay low, this is forcing a real restructuring exercise.

On implementation, the central government finalised its rules for this code, along with the other three, on the eighth of May 2026. That fifty percent wage rule is already live and companies are expected to act on it now rather than wait for an inspector to point it out.

1.2 The Industrial Relations Code

This code brings together the Trade Unions Act, the Industrial Employment Standing Orders Act, and the old Industrial Disputes Act. It covers how unions get recognised, how standing orders are framed, and how disputes like retrenchment and layoffs get resolved.

One of the bigger shifts is the threshold at which a company needs government permission before it can retrench, lay off, or close down part of its operation. That used to kick in at one hundred workers. Now it’s three hundred, which gives a lot more companies room to manage their workforce without waiting on approval. The code also introduces a formal idea of a negotiating union, which needs support from at least fifty one percent of the workforce to be recognised, or twenty percent if it’s operating as a negotiating council. Fixed term employees also get a meaningful upgrade here. They’re now entitled to the same pay and benefits as permanent staff doing similar work, and they qualify for gratuity after just one year instead of the previous five.

On the dispute resolution side, the code sets up a National Industrial Tribunal for complex or cross state disputes, and it requires every company with twenty or more workers to have a Grievance Redressal Committee for handling individual complaints early on. It’s also gradually pushing the old Labour Court and Industrial Tribunal system toward a new two member tribunal model, with mandatory conciliation before anything gets adjudicated. That transition isn’t happening overnight though. The Kerala High Court actually weighed in this April and confirmed that existing labour tribunals can keep functioning until the new setup is fully ready, so companies shouldn’t assume their pending matters have automatically shifted somewhere else.

1.3 The Code on Social Security

This is probably the broadest of the four. It folds in nine older laws, including the Provident Funds Act, the ESI Act, the Gratuity Act, and the Maternity Benefit Act, and for the first time it brings gig workers, platform workers, and unorganised sector workers under some form of statutory social security coverage.

Provident fund provisions now apply to any establishment with twenty or more employees, and once that threshold is crossed, coverage sticks even if headcount later drops. ESI applies to establishments with ten or more employees, and to hazardous workplaces regardless of headcount. There’s also a transition clause worth knowing about. The old provident fund scheme and ESI rules stay in force for one year from when the code took effect, meaning until the twenty first of November 2026, while new schemes get worked out. Existing exemptions companies already had under the old laws remain valid too, unless they’ve expired or been specifically changed.

A few practical wins for employers here. The deposit needed to appeal an EPFO order has dropped from a range of forty to seventy percent down to twenty five percent, and inquiries into contribution disputes now need to start within five years and finish within two, with a possible one year extension. As for the gig worker piece, the code recognises them as a separate category with their own dedicated social security fund, funded partly by aggregators, but the actual contribution rates and benefit details are still being worked out.

On implementation, final rules were notified alongside the other codes on the eighth of May 2026, but ESI specific provisions haven’t been fully switched on yet because of that one year transition window and a few missing notifications. So in practice, the old ESI framework is still what’s running day to day, even though the underlying act has technically been repealed.

1.4 The Occupational Safety, Health and Working Conditions Code

This one consolidates thirteen older laws, including the Factories Act and the Contract Labour Act, into a single framework covering workplace safety and conditions.

It requires companies to issue proper appointment letters, run safety audits, keep specific registers, and provide training. Any establishment with five hundred or more workers now needs a dedicated Safety Officer, and anything with two hundred fifty or more needs a safety committee. There’s also a new National Occupational Safety and Health Advisory Board being set up to keep safety standards updated over time, and the code now allows women to work night shifts as long as proper safety and security measures are in place.

This code was notified as effective on the same date as the others, the twenty first of November 2025, but just like the rest, how much of it is actually running on the ground depends heavily on whether the relevant state has caught up with its own rules.

1.5 How Implementation Looks Across Different Cities

This is really where things get interesting, because the same law can feel very different depending on which city a company’s office is in.

In Mumbai and Pune, Maharashtra has actually moved fairly quickly. The state published draft rules for the Wages Code and the Industrial Relations Code back in April 2026, with a stakeholder consultation period that ran until mid June. Rules for the Social Security Code and the Safety Code are still pending though, so Maharashtra is ahead on two fronts and behind on two others.

Bengaluru has had a slightly bumpier ride. Karnataka published draft rules for the Social Security and Safety codes back in January 2026, and had earlier notified rules for Wages and Industrial Relations too. But once the central government finalised its own rules in May, Karnataka’s revised state rules for the remaining codes went back into limbo, and companies there are essentially waiting for round two.

Delhi and the wider NCR region, so that’s Delhi itself along with Haryana and parts of Uttar Pradesh, present a mixed picture. Delhi and Haryana both have draft rules out for some or all of the codes, but nothing fully finalised yet. Haryana and UP separately show up on lists of states that have notified final rules for at least one code, so businesses with offices spread across Delhi, Gurugram, and Noida genuinely can’t assume the rules are the same across all three. Each location needs checking individually.

Chennai is running a bit behind, particularly on the Social Security Code. Tamil Nadu has draft rules open for feedback, but it’s been called out specifically as one of the slower movers on the social security side, so companies there should expect a longer wait before that part of the framework is locked in.

Hyderabad is in a similar boat. Telangana has draft rules published for some or all four codes, but nothing finalised yet, which means the underlying law applies but the actual paperwork and registration processes on the ground are still catching up.

Kolkata is the clearest outlier. West Bengal hadn’t published draft rules for any of the four codes as of the most recent updates, which puts companies there in the longest stretch of the transitional period, where the substantive national law technically applies but there’s essentially no state level machinery supporting it yet.

And then there’s Ahmedabad, where Gujarat has actually been one of the frontrunners, having notified final rules across multiple codes and generally moving faster than even Maharashtra or Karnataka.

1.6 What this actually means for businesses

The honest takeaway here is that 2026 is a messy, in between year. The national law is technically live everywhere, but how much of it is actually enforceable on the ground depends entirely on the state, and sometimes even that answer is a bit blurry because different trackers report slightly different statuses depending on when they were last updated. For companies operating across more than one city, which is extremely common, the compliance picture can’t be assumed to look the same in each location. Something that’s fully operational in Ahmedabad might still be sitting in draft form in Kolkata.

The safest approach right now is checking state by state, code by code, rather than treating this as one uniform national rollout. Things are moving fast enough that what’s true this month might shift by the next one.

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Disclaimer: This article is intended for general informational purposes only and does not constitute legal advice or a legal opinion. Laws and judicial interpretations are subject to change. Readers are advised to seek professional legal advice based on their specific circumstances.