Is a Salary Structure Revision Mandatory for All Employers Under the New Labour Laws?

The four new labour codes take effect on November 21, 2025. Since their announcement, social media has been filled with misconceptions about whether employers must overhaul existing salary structures.

Under the new codes, at least 50% of an employee’s total pay must be classified as basic salary. Currently, many organisations structure only 30%–40% of compensation as basic pay. To comply with the law, such employers may need to adjust their salary components.

However, not all companies are required to revise their structures immediately—and some may not need to make any changes at all. This article explains these nuances in detail.

Is an Immediate Change Mandatory?

While employers must eventually comply with the provisions of the four Labour Codes, experts note that salary structure changes may not take effect right away. A key reason is that labour falls under the concurrent list.

For the new codes to be fully implemented, individual states must issue their own notifications in line with the central government’s guidelines. As a result, even though the Labour Codes are set to take effect on November 21, 2025, complete implementation may take additional time.

Consequences of Non-Compliance with the Labour Codes:

 Failure to comply with the Labour Codes can expose employers to underpayment claims and heightened regulatory scrutiny, including substantial penalties under the new framework.

As a first step, organisations should review their CTC structures and benefit calculations for compliance. Based on this assessment, necessary adjustments can be made to ensure ongoing adherence to the law.

When Can a Company Retain Its Existing Salary Structure?

Companies can retain their existing CTC structures if they already meet the Labour Codes’ requirements, with basic salary comprising at least 50% of the total pay. If the basic component is lower, employers must revise the salary composition to comply with the new rules.