India’s New Labour Code 2025: What International Employers Need to Know

India Just Rewrote Its Employment Rules

India merged 29 outdated labour laws into four unified codes. This is the biggest employment law transformation in 70+ years, changing how businesses hire from India legally and manage international payroll India operations.

For companies operating across borders, these changes create both opportunities and compliance requirements you can’t ignore.

The Four New Labour Codes Explained

Code on Wages, 2019

Universal minimum wages: Every worker in every sector now gets minimum wage protection. The government sets a floor wage—states can go higher but never lower.

Clear wage definition: Wages include basic pay, dearness allowance, and retaining allowance. Other allowances (HRA, travel, etc.) are excluded unless they exceed 50% of total pay. This matters for calculating PF, gratuity, and overtime.

Timely payment for all: Earlier, payment protections applied only to workers earning below ₹24,000. Now these protections cover all employees regardless of salary.

Industrial Relations Code, 2020

Higher layoff thresholds: Government permission for layoffs now required only when establishments have 300+ workers (previously 100). This gives smaller businesses more flexibility.

14-day strike notice: Workers must give 14 days notice before striking, allowing time for dialogue.

Fixed-term employment India recognition: Companies can hire fixed-term employees who receive benefits comparable to permanent staff. This wasn’t clearly legal before.

Social Security Code, 2020

Gig worker protection: Platform workers (delivery drivers, freelancers, app-based workers) now qualify for social security. Platforms must contribute 1-2% of annual turnover (capped at 5% of worker payments).

Early gratuity eligibility: Fixed-term employees become eligible for gratuity after one year instead of five.

Unified framework: All workers can now be covered under PF, ESIC, insurance and other schemes, subject to scheme-specific eligibility rules.

Occupational Safety, Health & Working Conditions Code, 2020

India overtime rules: Maximum 48-hour work week (8 hours daily). Overtime requires worker consent and pays minimum 2x regular rate.

Women in night shifts: Women can work night shifts with consent and proper safety measures.

All-India contractor licenses: Valid for five years, reducing bureaucratic burden.

What This Means for International Employers

Hiring Indian Professionals for Cameroon Projects

A construction firm in Douala needed concrete specialists for a coastal project. They hired two Indian engineers on 18-month contracts.

Under Indian employment laws, they needed:

• Formal appointment letters detailing job description, wages, and social security
• Proper wage calculations including allowances
• Fixed-term employment benefits comparable to permanent staff

Working with employment specialists, they structured everything correctly. The project succeeded without legal complications.

Managing Remote Indian Workers

A Yaoundé tech company hired three Indian developers working remotely from India. They faced:

• India overtime rules limiting 48 hours weekly
• International payroll India requirements across jurisdictions
• Tax and social security in both countries

Professional payroll services handled compliance while the company focused on building software.

Key Compliance Requirements

Working Hours & Overtime

Normal hours capped at 8 daily and 48 weekly. Flexible models allow up to 12 hours daily, but weekly limits stay at 48.

Overtime requires worker consent. Pay must be at least double normal rate.

Mandatory Documentation

Every worker needs appointment letters specifying:

• Designation and responsibilities
• Wage breakdown and allowances
• Social security entitlements
• Working hours

Digital record-keeping is now required for transparency and compliance.

Fixed-Term Employment Rights

Fixed-term employees get:

• Same social security as permanent staff
• Gratuity after one year (previously five)
• Equal benefits during contract period

This matters for project-based international hiring.

Gender Equality

No discrimination in recruitment, wages, or employment conditions. Women can work all shifts with consent and safety measures.

Gig Economy Recognition

India’s labour code 2025 formally recognizes platform workers. Delivery drivers, freelancers, and app-based workers now get social security protection.

Platform companies must contribute to worker welfare funds. This affects businesses using Indian freelancers for IT, design, marketing, or consulting work.

Managing International Payroll India Compliance

Cross-border employment creates complex requirements:

Tax obligations: Understanding withholding requirements in both jurisdictions

Social security: Managing contributions under both countries’ systems

Currency and payments: Handling international transfers correctly

Documentation: Maintaining records meeting both countries’ standards

Most businesses find professional payroll services simpler than managing everything internally. Specialists handle compliance while you focus on operations.

Common Compliance Questions

Do India’s labour codes apply to remote workers abroad?

Generally yes, if they’re Indian residents. For international companies hiring Indian remote workers, employment structure determines which regulations apply.

How do I calculate wages correctly?

Include basic pay, dearness allowance, and retaining allowance. Other allowances are excluded unless they exceed 50% of total pay.

What about overtime for project deadlines?

Overtime requires worker consent and minimum 2x pay. You cannot mandate more than 48 hours weekly.

Can I hire fixed-term employees from India?

Yes. They receive benefits comparable to permanent staff and qualify for gratuity after one year.

What social security contributions apply?

Depends on employment structure. Indian residents require contributions under Indian systems. Workers in Cameroon need CNPS contributions. Cross-border situations may require both.

Why Professional Support Matters

International employment involves:

• Multiple jurisdictions and conflicting requirements
• Complex payroll across currencies and tax systems
• Social security in different countries
• Detailed documentation standards

Professional employment services provide:

• Expertise in both countries’ regulations
• Infrastructure for compliant payroll and documentation
• Risk mitigation through proper structuring
• Efficiency so you focus on business growth
• Scalability for expanding international teams

Taking Action

If you’re considering hiring from India or managing international teams:

This week: Review current international employment structures. Check if contracts specify governing law clearly. Verify documentation meets both countries’ requirements.

This month: Consult employment law specialists. Implement proper record-keeping systems. Update contracts reflecting India labour code 2025 changes.

This quarter: Develop clear international hiring policies. Build relationships with compliance professionals. Create scalable systems for growth.

The Strategic Advantage

International hiring done right creates competitive advantages:

• Access specialized expertise unavailable locally
• Cost efficiency compared to European or American alternatives
• Knowledge transfer to local teams
• Global networks through international employees

India’s new labour codes make compliance clearer. Four unified codes replace 29 confusing laws. Understanding these changes helps you hire from India legally while protecting your business.

Ready to Navigate International Employment?

Understanding Indian employment laws is just the beginning. Successfully managing cross-border teams requires expertise, systems, and ongoing compliance.

SAASA B2E specializes in international recruitment and employment solutions for businesses operating across Africa and beyond. We help companies:

✓ Navigate complex labour regulations across jurisdictions

✓ Structure compliant employment for international hires

✓ Manage international payroll India and other countries

✓ Handle documentation and compliance requirements

✓ Access global talent while protecting your business

Whether you need specialized professionals for specific projects or want to build international teams long-term, proper structure matters.

Visit www.saasab2e.com to learn how we help businesses access global talent while maintaining full compliance across all jurisdictions.

Don’t let compliance complexity prevent you from accessing the expertise your business needs. Start with knowledge. Build proper systems. Grow with confidence.

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