India is fast becoming a strategic hub for global businesses - from tech and manufacturing to customer service and professional services. But with rapid growth comes regulatory evolution. India’s employment law landscape is shifting significantly, particularly with the long-awaited implementation of four labour codes aimed at consolidating and modernising decades-old legislation.

For employers with operations or talent in India, understanding these changes is critical. Missteps around wages, benefits, or worker classification can lead to costly disputes and reputational risk. And as I’ve seen across multiple markets, the companies who thrive are the ones who prepare early, stay compliant, and adapt their HR practices to local realities - not assumptions.

Quick Tips

• Review employment contracts to align with new wage and working hour requirements

• Prepare for digitised compliance and record-keeping mandates

• Anticipate centralised reporting under the new labour codes

• Ensure leave policies comply with state-specific and national reforms

• Revisit your contractor and gig worker arrangements for classification risks

The Four Labour Codes: A New Foundation for Indian Employment Law

The most important legislative shift is the consolidation of 29 central labour laws into four streamlined codes:

• The Code on Wages

• The Industrial Relations Code

• The Occupational Safety, Health and Working Conditions Code

• The Code on Social Security

These reforms aim to simplify and modernise India’s employment laws while promoting transparency and formalisation. For international employers, the changes introduce greater standardisation across states - but also increase obligations around digital compliance, working hours, and wages.

According to L&E Global’s India update, once these codes are fully enacted (expected in 2025), companies will face new expectations around record-keeping, digitised filings, and state-specific rule compliance. Now is the time to audit your internal systems and prepare for these updates.

Wage and Work Hour Reforms: Key Changes You Can’t Ignore

Under the new Code on Wages, the definition of “wages” is being standardised to ensure more consistent employer contributions and entitlements. This could impact take-home pay calculations and overtime eligibility for many Indian employees. Additionally, the codes impose a maximum daily working hour limit of eight hours, with stronger protections for rest and overtime.

Global businesses will need to reassess how they structure pay, benefits, and hours in India. I recently advised a European-based fintech company with a growing presence in Bangalore - we revisited their payroll setup and adjusted bonus structures to comply with the new wage definition. It not only avoided future penalties but also improved employee clarity and trust.

Contractor Classification and Gig Workers: 

An Evolving LandscapeThe Social Security Code includes provisions to extend certain benefits to gig workers and platform workers. While still in its early phases, this marks a shift in how India recognises and regulates non-traditional workforces.

If you’re engaging contractors, freelancers, or gig workers in India, it’s worth checking how those relationships may be classified under the new law. Misclassification risk is rising globally - and India is no exception. 

For one US firm I supported, we transitioned their contractors to fixed-term employee contracts to reduce grey areas and ensure proper contributions to employee provident funds (EPF).

A Real Example: Getting Ahead of the Curve in India

A client in the e-commerce space approached us in early 2024. They had over 150 employees in three Indian cities, with a mix of fixed-term staff, long-term contractors, and gig-style arrangements. With the new codes looming, they wanted certainty.

We ran a full audit - from contract reviews to leave policies and payroll compliance. We then worked with local counsel to align all terms with the incoming codes, introduced digital record-keeping systems, and developed compliance-ready onboarding protocols. Their HR and legal teams now feel confident heading into 2025, with no last-minute surprises.

Final Thoughts

India’s evolving labour framework is an opportunity, not just a risk. These reforms aim to modernise employment practices, increase protections for workers, and give employers clearer frameworks to operate within. But clarity only helps if you act on it.

What’s next for your global people strategy?

If you employ or contract in India, now is the time to prepare. Book a free compliance check-in or HR audit with ThinkGlobal HR to review your India employment practices, align your contracts, and build robust systems for the road ahead. We combine global insight with local expertise - so you can expand with confidence, not concern.