Four Codes, One Shop Floor: What Operations Teams Need to Review

Implementation and Statutory Context

EY India's alert of November 2025 said that the Government of India made four labour codes effective on 21 November 2025: the Code on Wages, 2019; the Code on Social Security, 2020; the Occupational Safety, Health and Working Conditions Code, 2020; and the Industrial Relations Code, 2020. Together, the alert said, they replace 29 existing central labour laws.

It cautioned that supporting rules under both central and state jurisdictions had not yet been notified at the time of writing, and that the alert was a summary, not the text of the codes, and should not be relied on for specific statutory requirements. We follow the same caution. We do not state thresholds, wage percentages or benefit rules here, because the source we read did not cover them. Check the notified rules and take professional advice.

What EY Told Employers to Review

The alert listed several areas for review. Job descriptions and workforce classifications should be checked against the new definitions of "employee" and "worker."

Hiring models and contracts should be reassessed, including fixed-term arrangements and restrictions on contract labour for core activities. Pay structures and payroll should be analysed for a uniform definition of wages. The financial impact of enhanced employee benefits should be assessed.

HR policies on working hours, leave and retrenchment should be updated. And employers should put in place internal controls, periodic diagnostic reviews and governance.

“Compliance begins with knowing exactly who works on your floor.”

A Shop-Floor View: Our Framework

The following questions turn the review into practical work for an operations team. They are suggestions for discussion with your HR head and adviser, not legal conclusions.

1. Who is on our floor? Make a list of everyone who works in the plant: permanent staff, fixed-term staff, contract workers supplied by agencies, apprentices and trainees. Note how each is engaged and who pays them.

2. What do they do? Match each role to its work. If contract workers perform tasks that are central to your core activity, the new restrictions on contract labour may be relevant. Ask your adviser.

3. How is pay structured? Look at how basic pay, allowances and bonuses are divided. A uniform definition of wages may change what counts for contributions and benefits.

4. What will it cost? Ask finance to model the effect on payroll and benefits under different assumptions, so the cost is not a surprise.

5. What do our policies say? Check working hours, overtime, leave and retrenchment procedures against the new framework once the rules are notified.

6. What are the safety obligations? The occupational safety code is part of the package. Review training records, inspection schedules and incident reporting.

7. Who is responsible? Name an owner for compliance, with a calendar of deadlines.

Contractors, Small Plants, and What We Do Not Know

Many plants rely on staffing agencies. If your agency does not understand the changes, the risk may fall on you as the principal employer. Ask each agency how it is preparing and what it will change in its contracts.

For small manufacturers: A firm with a few dozen workers may find the changes a heavy administrative load. Starting early, with a simple register of all workers and their terms, spreads the effort. Industry associations often host briefings, and sharing a consultant between members can lower the cost.

What we do not know: We have not reviewed state rules, which may differ, or the detailed thresholds in the codes. We cannot tell you which of your arrangements will need to change. That is for your adviser.

Documentation and Workforce Communication

The codes are as much a documentation exercise as a policy shift. Firms with clean records of who works for them, on what terms, and how they are paid will adapt more easily than those that rely on informal arrangements.

Communicating with your workforce: Changes in rules can worry workers, who may fear a loss of pay or security. A short, honest briefing, held in the local language, with a chance to ask questions, prevents rumours. Tell people what you know, what you are still checking and when you will update them.

Involve supervisors, who are usually the first people workers ask. Trust built during a period of change is hard to win back if it is lost, so it is worth spending time on.

Editorial guide based on one professional-services summary; not legal advice. Verify against the notified codes and rules.