India's new labour codes and what they mean for manpower firms

The four codes, in one line each

Code on Wages: a single definition of wages and a statutory floor wage across all employment. Industrial Relations Code: standing orders, unions and, notably, fixed-term employment. Social Security Code: PF, ESI, gratuity and new coverage for gig and platform workers. OSH Code: safety, working conditions and, importantly for this industry, contract labour and inter-state migrant workers.

The new wage definition

The codes introduce a uniform definition of wages in which allowances are capped so that basic wage (and dearness allowance) is generally at least 50% of total remuneration. For manpower firms this can raise the base on which PF, gratuity and other contributions are calculated, changing both worker take-home and employer cost. Rate cards and cost sheets should be modelled against this definition.

Contract labour moves under the OSH Code

The OSH Code repealed and replaced the Contract Labour (Regulation and Abolition) Act from 21 November 2025. Under it, contract-labour provisions apply at a higher threshold of 50 contract labour (section 45) than the old CLRA's 20, with single, web-based registration, licence and returns (the OSH (Central) Rules, 2026 use the Shram Suvidha portal). The core duties, licensing of contractors, registration of principal employers, registers and principal-employer liability, remain in substance.

Fixed-term employment and social security

The Industrial Relations Code formally recognises fixed-term employment, letting firms hire directly for a fixed period with the same benefits as permanent workers on a pro-rata basis, including gratuity eligibility on shorter service. The Social Security Code extends coverage toward gig, platform and unorganised workers, which over time affects how contract and flexi workforces are covered.

What manpower and staffing firms should do

Practically: re-model wage structures against the new wage definition; track whether your states have notified the rules; be ready for consolidated registration and returns under the OSH Code; and keep contractor licences, registers and social-security contributions clean, because the substance of principal-employer liability carries over. Software that already runs muster, wages, registers and returns from one record makes the transition far less painful.