Regarding the New Labour Codes notification announced in November 2025, we recently came across another update from ESIC indicating that certain changes related to the implementation have been withdrawn/kept in abeyance.
We wanted to understand how other non-profits or organisations are approaching this at the moment:
Are you making salary structure changes (especially regarding the 50% wage definition for Basic, gratuity implications, etc.)?
Or are you maintaining the status quo until further clarity from EPFO/ESIC and state rules?
Would appreciate hearing how others are navigating this transition. Thanks in advance for your inputs.
The Labour Codes are effective from 21.11.2025 since no transition period was granted by Govt.
The final central rules will get notified in March 2026 likely. As for state rules, 3-5 states have notified final rules for some or all codes while it is work in progress with other states.
There is no announcement from the Ministry of Labour but there is a view that once the final central and state rules are notified, the Ministry may announce that compliance is nonnegotiable from a particular date.
How to act?
The central and state rules will only lay down procedures for the provisions in the Labour Codes. They cannot overrule the provisions in the Codes. Therefore, it will be appropriate to be ready with (i) revision in comp structure in line with the definition of Wages (ii) streamlining the HR categories given that FTE is a new category and contract labour is prohibited in core activity (c) provision of Annual leave (d) being ready to comply with SS benefits like EPF, ESI, Gratuity and Annual Leave based on Wages (e) ascertaining and providing for retrospective liability for gratuity and EL (f) adherence to minimum wages based on Wages which may get announced soon and budgeting in donor proposals (g) obtaining LIN if employee strength is 10 and above (h) obtaining ESI registration seeded under LIN even if no employee is within the ESI threshold.
The above actions would not change based on central and state rules. So, action now is highly recommended. Large and mid-sized NGOs have already assessed and initiated action on above for compliance.