What are the four codes?

The Code on Wages, Industrial Relations Code, Social Security Code, and OSH Code.

How does the '50% Wages' rule work?

It ensures that basic pay and other universal allowances make up at least half of the total package.

Will take-home salary decrease?

For many, yes, because higher 'Wages' means higher PF and Gratuity contributions.

Is it already implemented?

The codes have been passed but the implementation date is being finalized by the central and state governments.

How does it affect Gratuity?

Since Wages increase, the gratuity liability for companies will also increase.

Does it help gig workers?

Yes, the Social Security Code extends benefits to gig and platform workers for the first time.

What is the impact on leave rules?

The codes aim to unify leave entitlement and carry-forward rules across different states.

Should I restructure salaries now?

It's best to model the impact now so you can transition quickly once the codes are active.

Are there new penalties?

Yes, the codes introduce higher fines for non-compliance to ensure better enforcement.

How does Kiework help?

Our system is built to handle both the current laws and the new codes, allowing for a seamless switch.

Payroll Compliance

Indian Labor Codes

The Indian Labor Codes are a massive reform project that consolidates 29 central labor laws into four simplified codes: Wages, Industrial Relations, Social Security, and Occupational Safety.

Key Takeaways

Consolidates complex, overlapping legacy laws.
Redefines "Wages" to be at least 50% of total compensation.
Impacts PF, Gratuity, and Take-home salary calculations.
Aims to improve ease of doing business and worker welfare.

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Ameena Abdurahiman

Subject Matter Expert (HR & Compliance)

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Ameena Abdurahiman

Subject Matter Expert (HR & Compliance)

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