Indian labour law, explained for HR teams

01

Three layers to keep in view

Central Acts passed by Parliament set the framework for wages, bonus, social security, industrial relations and working conditions. Four labour codes, passed in 2019 and 2020, came into force on 21 November 2025 and consolidate 29 of these Acts; how each provision operates depends on the central and state rules framed under them. States frame their own rules under central law and also legislate on subjects such as shops and establishments, professional tax and labour welfare funds.

For an HR team, the practical point is that one obligation can have a central source, a state rule and a local registration, and all three may need to line up.

02

What to track

• Which laws apply to each establishment, based on its location, type and headcount.
• Wage definitions used for contributions and bonus, and whether your salary structure is consistent with them.
• Registrations, licences and their renewal dates, by state and by location.
• Registers, returns and notices each law asks you to keep or display.
• Contractor compliance where you engage contract labour.
• Working hours, overtime and leave rules applicable in each state.

03

What to verify before acting

Thresholds, rates and the status of the codes and their rules change by notification, and states move at different times. Before relying on any figure, check the current official notification for the central Act or code and for the state where the employee works, and confirm with your legal adviser where the position is unclear.

Keep a dated note of what you checked and where. If a rule changes, that note shows what your payroll and policies were based on at the time.

Watch for itWhen a code and an older Act appear to say different things, do not assume which one governs your case. Check whether the relevant provisions have been brought into force.