Tamil Nadu Labour Compliance for Employers with 100+ Staff: 2026 Guide
This guide explains Tamil Nadu labour compliance for employers with 100 or more staff, including where the Tamil Nadu labour code rules stand today. Tamil Nadu is one of India’s major manufacturing states, with major employers in Chennai, Coimbatore, Hosur and Sriperumbudur. Professional Tax here is levied by local bodies, and Shops Act registration rules changed in 2024.
The four central Labour Codes have been in force since 21 November 2025. Tamil Nadu published draft OSH rules in April 2022. As of 7 November 2026, no final OSH rules have been found; the Tamil Nadu Contract Labour Rules 1975 continue to the extent they are not contrary to the OSH Code (s.143). This guide sets out what an employer with 100 or more staff in Tamil Nadu needs to manage today.
Tamil Nadu Labour Compliance at a Glance
| Area | Position (checked 7 November 2026) |
|---|---|
| Labour Code state rules | Draft OSH rules (2022) |
| Shops and Establishments | 10+ workers: register online in Form Y within 6 months, Rs 100, one-time |
| Professional Tax | Levied by local bodies, half-yearly (Chennai slabs below) |
| Labour Welfare Fund | Rs 20 employee, Rs 40 employer a year |
| Contractor licence | 50+ contract labour (OSH Code) |
Contract Labour Compliance in Tamil Nadu: Principal Employer Duties under the OSH Code
Since 21 November 2025, contract labour across India is governed by the Occupational Safety, Health and Working Conditions Code, 2020 (the OSH Code), which replaced the Contract Labour (Regulation and Abolition) Act, 1970. For an employer with 100 or more staff, the Code changes four things.
| Requirement | What the OSH Code says |
|---|---|
| Establishment registration | Every establishment with 10 or more workers registers electronically within 60 days (s.3). An unregistered establishment cannot employ workers. |
| Contractor licence | Required where a contractor engages 50 or more contract labour (s.45, s.47). One licence is valid for 5 years (s.48). |
| Welfare and wages | The principal employer provides welfare facilities to contract labour (s.53) and pays any wages the contractor fails to pay, recovering them from the contractor (s.55). |
| Core activities | Contract labour is not permitted in core activities, except in three cases set out in s.57. |
Engaging contract labour through a contractor who needed a licence and did not hold one is treated as a contravention by the principal employer (s.54). Contractor licence checks should therefore be part of every vendor onboarding.
Contract labour in Tamil Nadu today
With state OSH rules still in draft, the 1975 Tamil Nadu Contract Labour Rules continue where consistent with the Code. Employers should keep existing registrations and contractor licences current and follow the Code’s principal employer duties.
Professional Tax in Tamil Nadu
Professional Tax is levied by each urban local body for two half-years (April to September and October to March). The employer deducts it from salary and remits it to the local body. Greater Chennai Corporation slabs (half-yearly gross salary):
| Half-yearly salary | PT per half-year |
|---|---|
| Up to Rs 21,000 | Nil |
| Rs 21,001 to Rs 30,000 | Rs 180 |
| Rs 30,001 to Rs 45,000 | Rs 425 |
| Rs 45,001 to Rs 60,000 | Rs 930 |
| Rs 60,001 to Rs 75,000 | Rs 1,025 |
| Above Rs 75,000 | Rs 1,250 |
Other local bodies notify their own rates and dates. Employers with sites across Tamil Nadu should set PT by site location.
Labour Welfare Fund in Tamil Nadu
The yearly contribution is Rs 20 per employee and Rs 40 by the employer, with Rs 20 from the Government. It applies to factories, plantations, motor transport undertakings and establishments with 5 or more persons. Confirm the payment date with the Tamil Nadu Labour Welfare Board each year.
Shops and Establishments in Tamil Nadu
Since 2 July 2024, every establishment with 10 or more workers must register online in Form Y within 6 months of starting, with a fee of Rs 100. The certificate is issued in Form Z and registration is one-time, with amendments on change. The amendments also added welfare duties: drinking water, latrines, a rest and lunch room, and first aid.
| Rule | Position |
|---|---|
| Opening hours | Establishments may stay open all 365 days for 3 years from 24 August 2026, with a weekly off for each employee |
| Women at night | 8 pm to 6 am only with written consent, safety measures and transport |
| Leave | 12 days earned leave after 12 months, accumulating up to 45 days |
| Overtime | Twice the ordinary rate |
Industrial establishments with 20 or more workers are also covered by the Tamil Nadu Permanent Status Act, 1981: a workman who completes 480 days in 24 months becomes permanent.
Tamil Nadu Labour Compliance Checklist for Multi-State Employers
Most employers with 100 or more staff operate in more than one state. The central Codes are common, but registrations, Professional Tax, LWF and shop rules are state by state. A practical control list:
- Map every site and headcount by state, including contract labour on any day of the last 12 months.
- Confirm OSH Code establishment registration for each site with 10 or more workers.
- Keep a register of contractors with licence numbers, validity, states covered and permitted headcount.
- Set Professional Tax and LWF deductions in payroll by work location, not by head office.
- Track each state’s due dates in one calendar: PT is monthly in some states and half-yearly in others.
- Check Shops and Establishments registration or intimation for every office, store and branch.
- Review night-shift approvals and conditions for women employees state by state.
- Recheck each state’s Labour Code rules every quarter: several states are still at the draft stage.
How TMS Supports Large Employers in Tamil Nadu
Team Management Services manages statutory compliance, payroll and contract labour governance for employers across India, including OSH Code registrations, contractor licence audits, Professional Tax and LWF filings, and Shops and Establishments registrations. See our HR services in Tamil Nadu and contract labour compliance services, or speak to our compliance team.
Frequently Asked Questions
Who collects Professional Tax in Tamil Nadu?
The urban local body where the employee works, such as Greater Chennai Corporation. The employer deducts it half-yearly and remits it.
What is the Shops Act registration deadline in Tamil Nadu?
Establishments with 10 or more workers register online in Form Y within 6 months of starting business, with a Rs 100 fee.
Does the Tamil Nadu Permanent Status Act still apply?
Yes. Industrial establishments with 20 or more workers must confer permanent status on workmen who complete 480 days in 24 months.
Related Reading
- Statutory compliance services in Chennai
- Professional Tax rates 2026, state by state
- Labour Code state rules 2026: what each state decides
Sources
- Greater Chennai Corporation: Professional Tax
- Tamil Nadu Labour Welfare Board
- Tamil Nadu Government Gazette (Shops Act amendments, 365-day order)
- Tamil Nadu Labour Department
- Ministry of Labour and Employment: Labour Codes
Last checked: 7 November 2026. Where state rules are still in draft, positions may change when final rules are notified. This guide is general information, not legal advice.