Labour Code State Rules: What Employers Must Check in 2026

India’s four Labour Codes are in force, and the Central Rules landed in May 2026. However, the day-to-day detail sits with the states. So labour code state rules now decide much of what your HR team must actually do. This guide explains what the centre has settled, what your state still controls, and how to check your own position.

Key takeaways

• The four Labour Codes took effect on 21 November 2025, and the Central Rules were notified on 8 May 2026.
• States make their own rules, so the picture differs from state to state.
• Core items such as PF, ESI and gratuity have carried over unchanged.
• Registers, forms, leave detail and working hours are where labour code state rules bite.
• Check your state’s labour department directly, because tracker sites often disagree.

What has already changed across India?

First, the basics. The four codes replace 29 older laws. They took legal effect on 21 November 2025, and the Ministry of Labour and Employment notified the Central Rules on 8 May 2026.

So several things now apply nationally, whatever your state says:

• Appointment letters now go to every employee.
• Fixed-term employees get the same benefits as permanent staff, plus gratuity after one year of service.
• The wage definition adds excess allowances back into wages when they go above 50% of total pay.
• Core rates and thresholds carried over. Employer PF stays at 12% of basic wages, ESI still applies below the wage limit, and gratuity keeps its five-year rule for permanent staff.

Our guide to the Labour Codes for foreign employers covers those national changes in more depth.

Why do labour code state rules matter so much?

Labour is a shared subject in India. So the centre sets the framework, while each state writes rules for its own establishments. In practice, your state decides a lot of the detail you actually file and follow.

Consequently, two companies with identical policies can face different duties, simply because they sit in different states. Therefore, a single national checklist is not enough.

Which areas do labour code state rules control?

Broadly, the table below shows where to look for each answer.

Area	Set centrally	Shaped by your state
Wage definition and the 50% rule	Yes	Little room to differ
PF, ESI and gratuity rates	Yes	No
Appointment letter duty	Yes	Format details
Registers, returns and forms	Framework only	Yes, including the actual forms
Leave, holidays and weekly off	Framework only	Yes
Working hours, shifts and overtime	Framework only	Yes, including night shift conditions
Standing orders	The 300-worker threshold is in the Code	Model orders and certification, usually by the state
Professional Tax and Labour Welfare Fund	No	Yes, and rates differ
Inspections and filing portals	Framework only	Yes

In short, pay and benefits are mostly national. Paperwork, timing and working conditions are mostly local.

How do you check the labour code state rules that apply to you?

Meanwhile, states are moving at different speeds. Some have notified rules under all four codes, while others are still at the draft stage. Public trackers often disagree with each other, so verify before you act. Here is a simple process.

1. List your locations. Include every office, plant and registered address, plus any state where staff work from home.
2. Go to the source. Check each state’s labour department website and its official gazette, rather than a summary blog.
3. Check the stage. Draft rules are not binding, while notified rules are. Note the date of each notification.
4. Map the forms. Registers, returns and filing portals change with the rules, so list what each state now wants.
5. Ask your auditor or counsel. Ask for written confirmation on anything that affects pay, hours or exits.
6. Diary a review. Set a quarterly check, because more states are notifying rules through 2026 and 2027.

For central updates, use the Ministry of Labour and Employment site and the Shram Suvidha portal.

What should employers do while labour code state rules settle?

• Fix salary structures first. Because the 50% wage rule applies now, it changes PF and gratuity costs.
• Issue appointment letters to everyone. This is a national duty, not a state one.
• Review fixed-term contracts. Equal benefits and one-year gratuity apply. Our note on fixed-term employment explains the change.
• Keep old registers running. Do not retire a register until your state confirms the replacement.
• Brief your managers. Working hours and leave questions usually reach a manager first, so they need the answers.
• Watch multi-state teams. Remote staff can pull you into a state where you have no office.

If you would rather not track this yourself, our statutory compliance service covers registrations, filings and state-level duties.

Frequently asked questions

Are the Labour Codes in force in India?

Yes. India’s four Labour Codes took legal effect on 21 November 2025, and the Ministry of Labour and Employment notified the Central Rules on 8 May 2026. However, each state also needs to notify its own rules, and states are at different stages, so the practical detail varies by location.

What do labour code state rules actually cover?

State rules cover the operational detail: registers and returns, the forms you file, leave and holidays, working hours, shift and overtime conditions, standing orders and inspections. Pay-related items such as the wage definition, PF, ESI and gratuity are set centrally, so they do not change from state to state.

What happens if my state has not notified its rules yet?

The codes still apply, because they are in force nationally. Until your state notifies new rules, existing state registers and filing practices generally continue. Confirm the position in writing with your auditor or legal adviser, and review it each quarter, since notifications are still being issued.

Do the Labour Codes change PF, ESI or gratuity rates?

No. The core rates and thresholds carried over. Employer Provident Fund remains 12% of basic wages, ESI still applies to employees below the wage limit, and gratuity keeps its five-year service rule for permanent staff. Fixed-term employees, though, now qualify for gratuity after one year.

How TMS can help

TMS has handled Indian statutory compliance for employers since 2006, across multiple states. Our compliance team tracks central and state notifications, runs the filings and keeps your registers current, so your HR team does not have to chase each gazette.

This guide is general information, not legal advice. Rules are still being notified state by state, so confirm your position with your own adviser.