Insights · People & organisation

The labour codes are in force. What binds your hospital is a state rule that mostly doesn't exist yet.

Gratuity at one year for fixed-term staff, overtime at twice the rate, and a crèche threshold that most 75-bed hospitals already cross.

India's four labour codes came into force on 21 November 2025

India's four labour codes came into force on 21 November 2025. Draft central rules were pre-published on 30 December 2025 with a comment window that closed in February, and the Industrial Relations (Central) Rules 2026 were notified on 8 May 2026. Rules under all four codes were reported notified that week.

We have not been able to obtain a gazette reference or a press release for the full set, only for the industrial relations rules, so we are attributing that rather than asserting it.

Being in force is not the same as binding you

Labour is a concurrent subject, and hospitals in India have historically been regulated through state Shops and Establishments Acts. State rules under the codes are being framed unevenly: a handful of states and UTs have framed rules under the occupational safety code, and Bihar repealed its Shops and Establishments Act outright with effect from 1 June 2026. We could not establish how many states have notified final rules, and we are not going to guess. Your obligations are your state's, and in most states they are still being written.

What is settled enough to prepare for

Three provisions are confirmed from the labour ministry's own announcement and are worth acting on regardless of where the state rules land.

Appointment letters for everyone. Every employee is to receive a letter specifying job details, wages and social security. In most hospitals the consultants and senior nurses have contracts and the housekeeping, ward and contract staff do not. That is the gap.

Overtime at twice the normal rate. Not one and a half. Against 8-hour days and 48-hour weeks, this is a direct arithmetic problem for nursing rosters built around 12-hour shifts.

Gratuity for fixed-term employees after one year, rather than five. If you run nursing or technician staff on fixed-term contracts, and many hospitals do specifically to avoid the five-year threshold, that structure no longer achieves what it was built to achieve. This is the provision most likely to change a hospital's cost base.

A fourth is worth planning for: a crèche obligation at 50 or more workers, now framed gender-neutrally. Almost any hospital above about 75 beds crosses 50 employees, and hospital workforces are heavily female. We could not confirm the child age limit or any prescribed distance, so treat the threshold as firm and the detail as pending.

Two things being reported loosely

The safety committee threshold. It is widely quoted as 500 workers for any establishment. The sourced breakdown we could find is occupation-specific: 500 for factories, 250 for building and construction, 100 for mines. A hospital is not a factory. Do not assume the 500 figure applies to you until your state's rules say so.

The re-skilling fund. Retrenchment triggers a contribution of 15 days' last-drawn wages per worker. One source describes the employer depositing within 10 days; the ministry describes the amount being credited to the worker within 45 days. Those look like two different obligations rather than a contradiction, but we could not verify that reading against the rules text.

We also found the free annual health examination described both as applying to all employees and as applying to workers over 40 in specified sectors. Which of those binds a hospital is unresolved.

What this means for your hospital

Do the document work now, because none of it is state-dependent and all of it takes months. Issue appointment letters to every employee, including contract and outsourced-equivalent staff. Build the statutory registers, wage records and attendance rolls. Get the employment file in a state where someone could inspect it.

Then model two numbers before your state notifies. What overtime at twice the rate does to your nursing cost at current rosters. And what gratuity accruing from year one does to your provision if every fixed-term employee qualifies.

Both are arithmetic you can do this month. Neither gets easier by waiting for the rule that makes it compulsory.

Sources

Unverified, stated as such: we could not obtain a gazette or PIB reference confirming that rules under all four codes were notified on 8 May 2026, only the industrial relations rules. We could not confirm a prescribed appointment-letter format, the crèche age limit or distance, which establishments the annual health examination binds, or how many states have notified final rules. Nothing on this page should be treated as advice on your specific state position.

Rosters, contracts and registers, before someone else reads them.

We audit employment documentation and duty patterns against the codes, fix what is clearly exposed, and tell you plainly what is still unsettled.

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