India's four labour codes, the Code on Wages, the Industrial Relations Code, the Code on Social Security and the Occupational Safety, Health and Working Conditions Code, took legal effect on November 21, 2025, consolidating 29 older central statutes (DLA Piper GENIE, 2025). Nine months on, the picture for HR and payroll teams is not a finished rollout. It is a patchwork of central rules that arrived late, state rules that are still incomplete, and payroll cost changes that are landing regardless.
The central rules arrived six months after the law
The codes had legal force from November 2025, but the operational rules that tell employers how to actually comply did not exist yet. The Ministry of Labour and Employment notified the Central Rules under all four codes, the Code on Wages (Central) Rules 2026, the Social Security (Central) Rules 2026, the Industrial Relations (Central) Rules 2026 and the Occupational Safety, Health and Working Conditions (Central) Rules 2026, on May 8, 2026 (KPMG GMS Flash Alert, 2026). That is a five and a half month gap between a law taking effect and the rules that operationalize it being published, a gap payroll and compliance teams spent applying the codes on a best-guess basis.
The PF wage ceiling stayed at 15,000 rupees
One specific number resolved in that period was the wage ceiling for the Employees' Provident Fund. Gazette Notification S.O. 2702(E), published May 29, 2026, fixed the EPF wage ceiling under Chapter III of the Code on Social Security at 15,000 rupees per month, the same level it has held since 2014 (KPMG GMS Flash Alert, 2026; Indialaw, 2026). Employee unions had pushed for a rise to 25,000 rupees. The government held the line, which means the mandatory employer PF contribution still caps near 1,800 rupees a month per employee at the ceiling, even as other parts of the codes push more of an employee's pay into the basic-wage bucket that PF is calculated on.
State rule-making is running at different speeds
The codes give states authority to notify their own rules on top of the central framework, and that process has not moved uniformly. As of mid-2026, Maharashtra and Karnataka had notified rules across all four codes and moved compliance onto state portals, with Maharashtra's Code on Wages and Industrial Relations rules published in the state gazette on April 28, 2026. Delhi had notified rules only under the Wage Code and the Social Security Code, with the Industrial Relations Code and the Occupational Safety Code still pending. West Bengal had not notified rules under any of the four codes as of its state government's own July 2026 statement of intent to implement them (BusinessToday, July 2026; ILMS Academy state tracker, 2026). For any employer with headcount across multiple states, this means the compliance obligation is not one set of rules but as many sets as there are states with workers, and some of those sets do not exist yet.
The 50 percent basic-pay rule is the one already hitting payroll
The change already showing up in payslips is the wage definition itself. Under the Code on Wages, an employee's basic pay plus dearness allowance must equal at least 50 percent of total remuneration, closing off the long-standing practice of structuring CTC with a small basic salary and a large stack of allowances to keep statutory contributions low. Because PF, gratuity and other statutory payments are calculated on basic wages, employers restructuring CTC to meet the 50 percent floor are seeing statutory cost increases in the range of 5 to 15 percent, according to guidance published by employer compliance advisers and confirmed in the Ministry of Labour and Employment's own published FAQ on the codes (Ministry of Labour and Employment FAQ, 2026).
What this means for HR and payroll teams right now
None of this is a future-of-work story. It is a present compliance obligation with an incomplete instruction set. Central rules exist as of May 2026. State rules exist in some states and not others. The wage ceiling that determines PF exposure is fixed. The wage definition that determines what counts as basic pay is already forcing CTC restructuring. Employers operating in more than one state cannot treat this as done, and payroll teams still reconciling CTC structures against the 50 percent rule are working against a moving compliance target rather than a finished one. The practical step is not to wait for full state coverage before acting: the wage definition and the PF ceiling are settled at the central level and apply now, regardless of whether a given state has finished writing its own rules.