Govt publishes handbook on employer compliance under Labour Codes

Labour Ministry releases a handbook outlining 23 compliance actions for employers under the four Labour Codes, offering clarity ahead of final rules expected by the end of the fiscal year

The Labour and Employment Ministry has released a compliance handbook for employers to understand norms of labour codes and comply with them in a new regime.

 

“Compliance Handbook for Employers Under the Four Labour Codes (Central Government Sphere)” lists 23 actions that employers must fulfil regularly under the Code on Wages, the Industrial Relations Code, the Code on Social Security, and the Occupational Safety, Health, and Working Conditions Code.

 

Actions sought include foundational compliance, such as fixing the wage period and starting social security registrations for eligible workers, as well as monthly compliance actions such as timely payment of wages, issuing wage slips and deducting and depositing Employees’ Provident Fund Organisation and Employees’ State Insurance Corporation contributions.

 

 

The list also mentions periodical or annual compliance needs, such as updating minimum wage if it is revised and annual health examinations for specified employees, besides event-based compliance like issuing appointment letters to every new recruit, and settling final dues within two days of an employee’s exit.

 

“This primarily covers provisions of the codes for the establishments for which the appropriate government is the central government. Further, details will be prescribed in the Rules that the Central government will notify under the respective codes,” said the handbook.

 

It said that provisions under the labour codes shall prevail in case of any discrepancy with the contents of the handbook.

 

The handbook has chapter-wise breakdowns of the four codes and explains certain definitions such as “wages” and “worker” in detail.

 

“The government’s proactive initiative in releasing this Compliance Handbook as a ready reckoner is highly appreciated as it bridges the crucial gap between complex legislation and practical on-ground implementation,” said Balasubramanian A, senior vice-president at TeamLease Services.

 

“By distilling dense legal changes into a clear, time-bound roadmap, from foundational setups to event-based actions, it empowers companies to confidently transition to the new labour codes while significantly minimising the risk of inadvertent compliance errors,” Balasubramanian said.

 

The consultation period for the draft rules of the codes ended last week and the finalised rules are expected to come out before the end of the current financial year, according to a senior official aware of the matter.

 

Apart from seeking clarity on new provisions, industry representatives also reached out to the government during the consultation period, raising concerns over a potential rise in costs under the new labour laws.

 

Higher gratuity payouts, leave encashment and faster settlement of dues to resigning employees are among some of the provisions that companies have been worried about.

 

“Beyond gratuity payouts, provisions relating to increased employer contributions to provident fund, leave encashment, and uniformity in wage definitions are likely to further weigh on profitability. These changes, while progressive from a worker-protection standpoint, require companies to recalibrate their cost structures,” said Hardeep Sachdeva, senior partner at AZB & Partners.