How will India's new labour codes change compliance for foreign employers?

The Code on Wages standardizes the definition of 'wages' across PF, gratuity, and other statutory calculations, and caps allowances and other exclusions at 50% of total remuneration — meaning if a company's current compensation structure allocates less than half to basic pay (common in structures built to minimize PF contributions), it will need to be restructured, which increases the employer's PF and gratuity liability. The Industrial Relations Code changes the process and thresholds for retrenchment and layoffs, including raising the employee-count threshold requiring government permission for layoffs at larger establishments.

The Code on Social Security extends PF and ESI-like coverage to gig and platform workers for the first time, which matters for companies relying on flexible or contract-based workforces in India. The Occupational Safety, Health and Working Conditions Code consolidates and updates workplace safety and working-hours rules, including provisions relevant to establishments employing women in night shifts. Implementation has rolled out unevenly by state, so the practical compliance obligation at any given time depends on which states a company operates in and how far each state has notified its own rules — this is worth checking specifically rather than assuming uniform national implementation.