With the implementation of the four Labour Codes, all employment contracts and engagement agreements must now be realigned as follows:
- Mandatory Formalization
- Appointment letters mandatory for all employees, safety measures. in prescribed format.
- Must clearly capture designation, wages and benefits
2. Standardised Wage Structure
- Uniform definition of “Wages” applies.
- 50% Rule: Allowances cannot exceed 50% of total pay; excess becomes “wages”.
- Affects PF, ESI, gratuity and bonus calculations.
- Equal pay and timely wage payment (before 7th of next month).
3. Clear Employment Categorisation
Fixed Term Employees
- Written contract; benefits at par with permanent workers.
- Statutory benefits on a pro-rata basis; gratuity after one year.
4. Working Conditions & Safety
- 8-hour workday, overtime at 2x rate.
- Annual health check-up (40+).
- Leave encashment allowed.
- Women may work at night with consent + safety measures.
- Supremacy of Codes & Dispute Resolution
- Any contract term contradicting the Codes is void.
- Grievance Redressal Committee mandatory for 20+ workers.
- AV/digital media contracts must include a dispute mechanism.
Contract Labour / Staffing
- Contractor responsible for wages and PF/ESI;
- Principal Employer liable if contractor defaults.
- Must reflect licensing status and Aadhaar-based identification.
Employment contracts and engagement agreements must now follow a uniform, compliant structure incorporating standardized wages, mandatory benefits, formal Classification of workers, strengthened safety provisions, and enforceable dispute mechanisms. The new Codes aim to ensure transparency, predictability and improved Labour welfare across all industries.
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