India consolidated 29 labour laws into four Codes. Every company in the country is affected. Most have not started. Here are the twelve issues that carry the highest liability.
Allowances cannot exceed 50% of total remuneration. If they do, the excess gets reclassified as basic wages. PF, gratuity, bonus, and overtime liabilities recalculate overnight. Most companies designed their salary structures before this rule existed. The retrospective exposure is significant.
The Code on Wages mandates equal remuneration for identical or similar work regardless of gender. This extends beyond base salary to every component of compensation. Organisations with legacy pay structures built around subjective criteria face direct statutory exposure.
Fixed term employees now get the same benefits as permanent employees from day one. No probation period loophole, no benefit deferral. Companies using fixed term contracts to manage costs will find the cost advantage has disappeared while the compliance burden has doubled.
Establishments with 300 or more workers need government permission before any retrenchment, closure, or layoff. The old threshold was 100. Companies between 100 and 300 employees just gained freedom they did not have before. Companies above 300 just lost it.
Every industrial establishment with 300 or more workers must have certified standing orders. Model standing orders apply by default if you do not draft your own. Most companies have never read the model standing orders. They govern termination, suspension, grievance, and misconduct procedures. The default terms may not reflect how your organisation actually operates.
Platform and gig workers get social security coverage for the first time. The Central Government will frame schemes for life insurance, disability insurance, health insurance, and maternity benefits. If your business model depends on classifying workers as independent contractors, the legal ground beneath that classification just shifted.
Fixed term employees become eligible for gratuity on a pro rata basis even for contracts shorter than five years. The five year qualifying period that every HR team relied on no longer applies to this category. Budget accordingly.
Every worker gets a unique social security number linked to Aadhaar. Portability of benefits across employers becomes real. This is not just administration. It creates a permanent, traceable employment record that follows every worker across their career.
Employers hiring interstate migrant workers must provide a lump sum journey allowance. The definition of interstate migrant worker has been broadened. Any employee who has moved from one state to another for employment is potentially covered. In a mobile workforce economy, this touches more companies than anyone anticipated.
Women are permitted to work in all establishments during night hours, provided the employer ensures adequate safety, transport, and consent. This is progress. It is also a new compliance checklist. Employers who enable night shifts without meeting every condition carry the liability.
Workers in all industrial establishments must give 60 days notice before striking. During pendency of proceedings before a tribunal, strikes are prohibited. This gives employers time. It also means any procedural misstep in responding to the notice invalidates your defence.
First time offences under all four Codes can now be compounded. This is significant. It means a company facing its first prosecution can settle without a criminal conviction on record. But the window is narrow, the procedure is specific, and missing it converts a compoundable offence into a non compoundable one.
The Labour Codes did not add new laws. They rewired the old ones. Companies that treat this as a routine HR update will discover the difference in a tribunal.