India’s labour landscape entered a new era on November 21, 2025, with the rollout of four consolidated labour codes that simplify, modernize, and expand worker protections across all sectors. For recruiters and staffing agencies, these reforms aren’t just regulatory updates. They mark a huge shift in how hiring, onboarding, and workforce management must be done for India.

Labour codes at a glance

India’s new codes replace 29 legacy laws and set clear, modern standards for all major hiring and HR processes. They are:

• The Code on Wages (2019)
• Industrial Relations Code (2020)
• Code on Social Security (2020)
• Occupational Safety, Health and Working Conditions Code (2020)

This article details key changes introduced by these codes with direct references, aiming to specifically equip recruiters and staffing agencies with actionable insights. This article does not detail all changes introduced in the labour codes.

Highlights of labour code changes for recruiters

1. Formalize hiring and employment documentation

• Issue mandatory appointment letters to all new hires (including gig, fixed-term, contract, and permanent employees) detailing job role, wages, benefits, working hours, and employment classification, mandated under the Industrial Relations Code, 2020 and reinforced by the OSH Code, 2020.

• Clearly define and record worker categories (permanent, fixed-term, gig, platform)—full social security and wages rights apply irrespective of category.

2. Comply with wage and payment norms (Code on Wages, 2019)

• Pay universal minimum wages set by central or state governments.

• Ensure basic pay makes up at least 50% of total remuneration for PF and gratuity calculations.

• Make timely payments (monthly within 7 days after month-end) and provide wage slips (digital or physical). Penalties apply for delays or unauthorized deductions.

3. Extend social security benefits to all eligible workers

• EPFO coverage is extended to all establishments with 20 or more employees regardless of industry, so recruiters must flag PF eligibility for nearly all mid‑ to large‑sized clients and structure CTCs accordingly.

• ESIC now has pan‑India applicability, includes in‑laws and more dependents in the definition of “family”, and becomes mandatory even if a single worker is employed in hazardous work, so recruiters must check client coverage and communicate medical‑benefit eligibility clearly to candidates.

• Gratuity to be calculated and paid to fixed-term workers after 1 year of completion of employment.

4. Manage employment flexibility and restructuring

• Utilize fixed-term employment (FTE) contracts with the same benefits as permanent workers, which are ideal for project-based/seasonal jobs (IR Code, 2020).

• Follow revised regulations allowing layoff, retrenchment, or closure approvals needed only for establishments employing 300 or more employees.

• Contract labour engagement rules now apply only if more than 50 contract workers are employed (raised from 20); obtain and maintain unified all-India licenses.  

5. Leverage digital compliance systems

• Employers must maintain digital registers and records for wages, attendance, contract details, and social security registrations. They are to adopt web‑based inspections, use unified registration and return systems, which simplifies background documentation and makes it easier for recruiters to standardize onboarding data and documentation flows. An integrated ATS, HRMS, and payroll platform like Zoho People Plus helps you maintain records and stay compliant easily.

• Adopt electronic filing for registrations, licenses, and returns for streamlined compliance across all four codes.

Conclusion

By clearly mapping reforms to their originating labour codes, recruiters and staffing agencies can strategically update onboarding, payroll, and HR compliance systems. These statutory mandates are not just legal obligations but avenues to build trust, reduce risks, and modernize workforce management.

For seamless transition, invest in digital compliance tools, comprehensive staff training, and proactive documentation to master these new codes.

Disclaimer: This web page is for educational purposes only and should not be considered legal or professional advice.