Introduction

Background: New Labour Codes and the importance of state notifications

The New Labour Codes, enacted by the Indian Parliament, mark a landmark consolidation of 29 central labour laws into four comprehensive statutes: the Code on Wages, Industrial Relations Code, Social Security Code, and Occupational Safety, Health & Working Conditions (OSH) Code. While these Codes set the legal framework at the national level, their operational enforcement depends on state notifications.

State notifications are essential because labour is a concurrent subject under the Indian Constitution, meaning both the Centre and states share legislative competence. Without state-specific notification, certain provisions of the Codes — particularly those concerning employment thresholds, social security contributions, and sectoral applicability — cannot come into force. This dual structure creates a patchwork of enforcement, making it critical for employers, employees, and legal professionals to track which states have officially notified the Codes.

Key considerations include:

• Notification determines the effective date of applicability in each state
• State-specific rules may vary within the framework of the central Codes
• Non-notification or partial notification can lead to temporary legal ambiguity and compliance challenges

Purpose of the article: Tracking implementation across India

This article aims to provide a comprehensive, state-by-state snapshot of how the New Labour Codes are being implemented. The objectives are threefold:

• To identify which states have officially notified the Codes and their timelines
• To examine state-specific variations and rules that may affect compliance
• To assess the implications for employers and employees operating across multiple jurisdictions

By doing so, the article helps HR professionals, legal advisors, and workers understand how and when the new statutory framework impacts them, providing actionable insights for payroll, labour management, and workforce planning.

Overview of State-wise Notification Process

How labour codes are enforced at the state level

Enforcement of the New Labour Codes relies heavily on state notification. Once a state government publishes a notification in its official gazette, the Codes become legally binding within that state’s jurisdiction. Each notification typically specifies:

• Effective date of implementation
• Sectoral applicability, including thresholds for employee numbers
• Rules and schedules tailored to local industry and workforce conditions

State-level enforcement ensures that regional variations in employment patterns, industry practices, and administrative capabilities are accommodated while maintaining consistency with central legislation.

Role of state governments in notification and rules formulation

States play a pivotal role in translating central legislation into actionable rules:

• Drafting state-specific rules under each Code, such as contributions to social security schemes or procedures for layoffs and retrenchment
• Determining sectoral applicability, e.g., which industries must comply immediately versus those with phased implementation
• Setting up state authorities responsible for monitoring compliance, inspections, and grievance redressal

This decentralized approach allows states to maintain flexibility while ensuring uniform minimum standards for wages, social security, and occupational safety.

Timeline differences among states

Implementation timelines differ across states due to variations in administrative readiness, industrial composition, and political priorities. Some states have fully notified all four Codes, enabling immediate compliance, while others have opted for partial notifications, releasing only select Codes or provisions.

Key points on timeline differences:

• Early-adopting states may gain an advantage in investment climate and labour predictability
• States delaying notification create temporary regulatory uncertainty for employers and employees
• Gradual or phased notification allows for capacity building among inspectors, HR teams, and state authorities

The variation in notification timelines highlights the importance of a state-wise compliance strategy for multi-location employers and a clear understanding of rights and obligations for employees.

States That Have Notified the Codes

List of states that have officially notified each of the four codes

Several states in India have proactively notified the New Labour Codes, enabling immediate enforcement within their jurisdictions. Among early adopters, Haryana, Madhya Pradesh, Karnataka, Gujarat, and Maharashtra stand out for issuing notifications covering all four Codes — the Code on Wages, Industrial Relations Code, Social Security Code, and OSH Code.

Other states such as Rajasthan, Punjab, and Tamil Nadu have issued notifications for select Codes, with effective dates staggered to ensure administrative readiness. These notifications include detailed rules on minimum wages, social security contributions, and workplace safety standards.

Key highlights of state-specific rules and provisions

While the central framework is uniform, each state has introduced minor variations to suit local conditions:

• Wage thresholds: Some states have adjusted minimum wage slabs to reflect cost of living and industrial norms
• Social security contributions: States have provided clarity on PF, ESI, and gratuity contributions, sometimes setting ceilings for certain industries
• Inspection and compliance: State authorities have established mechanisms for monitoring workplaces, particularly in manufacturing and service sectors

These provisions ensure that while the Codes are consistent nationally, regional industry practices and workforce composition are accommodated.

Sectoral applicability (formal, informal, gig, contract labour)

State notifications also specify sectoral applicability, which is crucial for employers managing diverse workforces:

• Formal sector: Large-scale employers in manufacturing, IT, and organized services are fully covered
• Informal sector: Coverage varies; some states have phased notifications to allow smaller businesses time to comply
• Gig and contract workers: Several states, including Karnataka and Haryana, have explicitly extended protections, including PF and social security benefits, to contract, gig, and fixed-term employees

This approach promotes inclusive compliance, while allowing states flexibility in rollout schedules.

States Yet to Notify or Partially Notified

States delaying notification and reasons cited

Some states have yet to fully notify the New Labour Codes, citing administrative, technical, or political reasons. Delays are often due to:

• The need to revise state-specific rules for wages, social security, or OSH compliance
• Administrative bottlenecks in updating inspection and enforcement mechanisms
• Concerns regarding impact on small and medium enterprises (SMEs) and the informal sector

Such delays create a temporary regulatory vacuum, complicating compliance for employers operating across multiple states.

Partial notifications: specific codes or provisions notified

Several states have opted for partial notifications, where only select Codes or sections have been implemented. For example:

• Madhya Pradesh has notified the Code on Wages and Social Security Code but is yet to implement the Industrial Relations Code
• Rajasthan has phased in wage rules but delayed OSH compliance provisions
• Certain notifications only apply to formal sector employees, excluding smaller units or informal workers initially

Partial notifications allow states to phase implementation, giving both employers and employees time to adapt.

Potential impact on employers and workers in non-notifying states

Non-notification or partial notification affects compliance and labour planning in several ways:

• Employers must manage multiple payroll structures across states, balancing notified and non-notified provisions
• Workers may experience uneven protection of rights, such as minimum wages, social security benefits, and occupational safety standards
• Legal ambiguities may arise, increasing the risk of disputes or retrospective claims

This fragmented implementation highlights the importance of state-wise monitoring and proactive planning for organisations operating in multiple jurisdictions.

Implications for Employers

Compliance requirements in notified vs non-notified states

For employers, the staggered notification of the New Labour Codes creates a dual compliance environment. In states that have issued full notifications, organisations are legally bound to adhere to all provisions, including wage structuring, social security contributions, and occupational safety regulations.

• Employers in non-notified states may face uncertainty regarding which provisions are enforceable
• Multi-state organisations must track state-specific effective dates to avoid inadvertent violations
• Companies operating across jurisdictions may need parallel compliance strategies, ensuring adherence in notified states while preparing for eventual rollout in others

This requires careful planning and monitoring to prevent operational and legal complications.

Payroll, HR, and legal adjustments needed

The notification of the Codes compels organisations to make systematic adjustments in payroll and HR operations:

• Redesigning salary structures to meet the 50% basic pay threshold and align allowances with statutory definitions
• Updating contracts, HR policies, and internal documentation to reflect state-specific rules
• Implementing compliance tracking and reporting systems to ensure timely adherence to inspections and audits

Such adjustments involve collaboration between HR, legal, and finance teams, and often require technological upgrades for accurate payroll computation.

Risks of non-compliance and enforcement

Non-compliance carries tangible risks, especially in states that have fully notified the Codes:

• Legal penalties for failing to comply with wage, social security, or safety provisions
• Potential litigation from employees, particularly regarding PF, gratuity, or unpaid wages
• Reputational damage, affecting employee trust and investor confidence

Proactive compliance mitigates these risks, while delayed notification in other states should not be interpreted as an exemption, since enforcement can occur retrospectively once the Codes are notified.

Implications for Employees and Labour Market

Worker rights and statutory benefits in notified states

In states that have fully notified the Codes, employees gain access to enhanced legal protections and benefits. These include:

• Guaranteed minimum wages and timely payment provisions
• Social security coverage, including PF, ESI, and gratuity, even for contract and gig workers
• Clear guidelines for layoffs, retrenchment, and workplace safety

This strengthens financial security and labour rights, providing a more predictable employment environment.

Differences in protection between states

The staggered rollout means that protection levels vary across states:

• Employees in notified states enjoy full legal coverage
• Workers in non-notified or partially notified states may face limited benefits or delayed implementation of statutory provisions
• Multi-location organisations must manage uneven rights across workforce units, potentially leading to disparities in take-home pay and social security contributions

Such disparities underscore the importance of awareness and monitoring for both employees and HR teams.

Effects on gig, contractual, and fixed-term workers

The New Labour Codes extend statutory protection to non-permanent workers, but coverage is state-dependent:

• In notified states, gig, contract, and fixed-term employees gain social security benefits, wage protection, and grievance redressal mechanisms
• Non-notified states may delay these protections, creating an uneven playing field
• Companies must track state-wise applicability to ensure equitable treatment and avoid potential disputes

Overall, employees in notified states benefit from greater legal clarity and financial security, while those in non-notified states remain in a transitional phase until the Codes are fully implemented.

Challenges and Observations

Coordination between Centre and States

One of the primary challenges in implementing the New Labour Codes is ensuring smooth coordination between the central government and state authorities. While the Codes provide a uniform legal framework, labour being a concurrent subject requires active engagement from states to notify rules, set thresholds, and operationalise compliance mechanisms.

• Delays in notification often result from administrative bottlenecks or the need for local adaptation
• Differences in enforcement capabilities across states create fragmented compliance landscapes
• Multi-location employers must maintain real-time awareness of notifications to avoid inadvertent violations

Effective coordination is essential for a cohesive labour regulatory environment and to minimize legal ambiguity.

Variations in interpretation and enforcement

Even after notification, states may interpret certain provisions differently, leading to variations in enforcement:

• Some states adopt a strict approach to wage, social security, or occupational safety compliance
• Others may allow phased implementation or exemptions for SMEs or informal sector units
• Interpretation differences can affect labour disputes, payroll planning, and employee relations

Early monitoring of these variations helps employers anticipate compliance requirements and avoid legal risks.

Emerging patterns and lessons from early implementing states

Analysis of early-adopting states provides valuable insights:

• Proactive states tend to achieve smoother transitions, with better HR and payroll readiness
• Transparent communication and training mitigate employee resistance to salary restructuring
• States that balance flexibility with statutory adherence demonstrate higher compliance rates and lower dispute incidences

These patterns indicate that phased, well-documented, and transparent implementation is the most effective approach for both authorities and employers.

Conclusion

Summary of state notifications

As of now, a mix of states has fully, partially, or yet to notify the New Labour Codes. Notifications determine the effective applicability of key provisions, including wages, social security, and occupational safety, and shape the legal and operational landscape for employers and employees.

• Early-adopting states have enabled full compliance and protection for workers
• States with partial or delayed notifications create temporary uncertainty
• Sectoral applicability varies, particularly for informal, gig, and contract workers

What employers and employees should monitor

Both employers and employees need to remain vigilant regarding:

• State-specific notification dates and rules
• Adjustments in payroll, contracts, and HR policies
• Social security obligations, wage compliance, and occupational safety requirements
• Communication from state authorities regarding interpretation or enforcement guidance

Being proactive helps avoid legal complications and ensures workforce protection.

Outlook for full implementation across India

Full implementation of the New Labour Codes will require gradual notification and state-level capacity building. While early-adopting states set a benchmark, it is expected that:

• All states will eventually notify the Codes, ensuring uniform minimum labour standards
• Continuous monitoring and coordination between Centre and states will be critical
• Employers should adopt flexible compliance strategies and maintain open communication with employees

The phased rollout highlights both the opportunities and challenges in India’s evolving labour regulatory framework, providing a roadmap for enhanced worker protection and employer compliance.