A Strategic Advisory for Foreign Investors, Global HR Leaders and Boards
On 21 November 2025, India implemented one of the most far-reaching labour reforms in its history the four consolidated Labour Codes, replacing 29 fragmented labour laws. For the first time in decades, India now operates under a modern, nationally harmonised, and globally aligned workforce governance framework.
For foreign companies considering India entry, factory relocation, GCC expansion, or China+1 strategies, this reform fundamentally changes the risk, cost and governance equation
India is no longer merely a low-cost labour market
It is rapidly becoming a rules-based, auditable, ESG-aligned workforce economy
Why This Reform Changes India’s Investment Profile
Historically, foreign investors faced four structural risks in India’s labour environment:
- Fragmented state-wise compliance
- Legacy, outdated employment laws
- Industrial relations uncertainty
- Weak alignment with global governance and ESG standards
The new Labour Codes directly address these concerns by:
- Standardising compliance nationally
- Formalising employment and contractor relationships
- Expanding social security coverage
- Introducing safety, health and governance systems aligned with global norms
The result is not simply regulatory reform it is a shift from labour risk to labour governance.
For global headquarters, this means greater predictability, lower reputational risk, and stronger control over workforce compliance across India.
What the Four Labour Codes Do
Code on Wages
Introduces a National Floor Wage, mandates timely wage payments, and standardises minimum wages across India enabling predictable, transparent payroll systems.
Industrial Relations Code
Creates faster dispute resolution, formalises Fixed-Term Employment (FTE), and simplifies workforce restructuring allowing flexibility with legal certainty.
Code on Social Security
Extends PF, ESIC and benefits to contract, gig and platform workers, with portability across states strengthening ESG and workforce sustainability.
Occupational Safety, Health & Working Conditions (OSHWC) Code
Establishes national safety standards, mandatory health checks, women’s participation in night shifts, and single licensing making Indian workplaces auditable, safe and globally compliant.
What This Really Means for Global CEOs and Boards
While most discussions focus on “compliance”, the real impact of the Labour Codes is far deeper. These reforms force organisations to redesign how they govern pay, people, safety and vendors
- Compensation Models Must Be Rebuilt, Not Tweaked
The requirement that 50% of pay be treated as “wages” triggers cascading impacts on:
- PF contributions
- Gratuity liabilities
- Overtime costs
- Bonus eligibility
Allowance-heavy pay structures collapse under the new framework. Companies must now define fair, transparent and defensible compensation philosophies that can withstand regulatory and investor scrutiny
- HR Policies Are No Longer Sufficient Governance Is Required
Leave, overtime, termination, discipline, working hours and safety policies must be rewritten.
But more importantly, manager behaviour must change.
Documentation, process discipline and audit-readiness now determine compliance not informal management practices.
- Safety Has Become a Board-Level Risk
The OSHWC Code introduces safety committees, certified officers, medical facilities, and compliance audits. Safety is no longer an HR checklist it is a legal, financial and reputational risk category
- Contractor Risk Is Now Principal Employer Risk
If contractors fail on PF, wages or safety, the liability falls on the company. This forces a shift from vendor management to contractor governance.
- Industrial Relations Is Now Rule-Based
Standing Orders, grievance mechanisms and disciplinary action must be documented, transparent and defensible. This creates stability but removes discretion
- Data, Systems and a Single Source of Truth Become Critical
Fragmented spreadsheets across HR, payroll, safety and vendors will not survive audits. Companies now need centralised compliance and workforce governance systems
Why This Matters for Foreign Companies
The Labour Codes make India:
- More predictable
- More auditable
- More ESG-aligned
- More scalable
But they also raise the bar. Companies that adapt quickly will gain cost control, risk reduction and workforce stability. Those that delay will face penalties, disruption, and reputational exposure.
How M+V Altios Supports Global Companies
M+V Altios supports foreign companies to enter, expand and operate in India with full labour, payroll, safety and workforce compliance while maintaining alignment with global governance and ESG standards.
We help organisations:
- Audit and redesign compensation structures
- Implement compliant HR, payroll and contractor models
- Align safety and occupational health with OSHWC standards
- Establish grievance, IR and documentation frameworks
- Enable pan-India compliance with single registration and reporting
Our role is not only to make you compliant but to make your India workforce investment-grade
A Strategic Question for Global Leaders
Are your India operations designed for:
- Regulatory certainty
- Investor scrutiny
- ESG reporting
- Workforce scalability
If not, the new Labour Codes will expose the gaps.
This reform is not just a legal update it is a structural reset of how business is done in India.
M+V Altios is ready to help you navigate it with confidence.
