Key Takeaways
- India consolidated 29 central labour laws into four labour codes, which have been brought into force.
- The uniform "wages" definition can change PF, gratuity and salary structures.
- HRMS must support configurable salary components, working hours, leave and new worker categories.
- State rules and notifications matter; consult experts for your organisation.
The Code on Wages, Industrial Relations Code, Social Security Code and Occupational Safety, Health and Working Conditions Code replace many older central labour laws. Employers need payroll systems that can adapt.
Key payroll impacts
- Uniform definition of wages: excluded allowances are generally capped as a share of total remuneration, which can raise the base for PF and gratuity.
- Salary restructuring: many companies review basic pay and allowances.
- Gratuity: provisions for fixed-term employees.
- Social security: frameworks covering gig and platform workers.
- Working hours, overtime and leave rules under the OSH Code and state rules.
What HR software must support
| Requirement | Software capability |
|---|---|
| Wage calculation | Configurable inclusion/exclusion rules |
| Restructuring simulations | Compare old vs new CTC impact |
| Worker categories | Permanent, fixed-term, contract, gig |
| Registers and returns | Digital registers and reports |
| State variations | State-wise rule configuration |
Action plan
- Review salary structures with advisors
- Simulate impact on take-home and employer cost
- Update HRMS rules and payslip formats
- Communicate changes to employees
- Track state rule notifications
See payroll compliance basics.
Disclaimer: This is general information, not legal advice. Consult labour law and payroll professionals.
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Frequently Asked Questions
What are the four labour codes?
The Code on Wages, the Industrial Relations Code, the Code on Social Security and the Occupational Safety, Health and Working Conditions Code.
How do labour codes affect salary?
The uniform wage definition can increase the base for PF and gratuity, which may change take-home pay and employer costs.
Does payroll software need updates for labour codes?
Yes, salary rules, registers and reports may need reconfiguration.
Do state rules matter?
Yes, many provisions depend on state rules and notifications.
