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To support Administration and Facilities team in navigating the New Labour Codes (which consolidated 29 central labour laws into 4 codes), here is a targeted Q&A guide. 

 

PLEASE NOTE: These are still not finalised, we may have to wait until April 2026 for the final outcome.


⚠ Critical Context: As of late 2025, these codes have moved into the implementation phase. For a Facilities M

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To support Administration and Facilities team in navigating the New Labour Codes (which consolidated 29 central labour laws into 4 codes), here is a targeted Q&A guide. 

 

PLEASE NOTE: These are still not finalised, we may have to wait until April 2026 for the final outcome.


⚠ Critical Context: As of late 2025, these codes have moved into the implementation phase. For a Facilities Manager, this is not just a legal update; it is a financial and operational overhaul affecting your security guards, housekeeping staff, and technical maintenance teams.


1. The Code on Wages: Impact on "Take Home" & Budgets


Q1: Our security and housekeeping vendors structure salaries with low Basic Pay and high "Allowances" to keep PF costs low. Is this still allowed?
A: No. Under the new Code on Wages, the definition of "Wages" has changed.

  • The New Rule: Basic Pay + Dearness Allowance (DA) + Retaining Allowance must constitute at least 50% of the Gross Salary (CTC).
  • Impact: If your vendors currently keep Basic Pay at 30-40% of CTC to save on PF contributions, they must increase it to 50%.
  • Budget Consequence: This increases the employer's PF contribution and Gratuity liability. You should expect your manpower vendors to ask for a budget revision of roughly 5-10% to cover these statutory increases.


Q2: We pay overtime (OT) to technical staff during breakdowns. Are there changes to OT calculations?
A: Yes.

  • The Change: Overtime must be paid at twice the normal rate of wages.
  • Crucial Detail: Because "Wages" now implies a higher Basic base (as per the 50% rule above), the value of that "double rate" is significantly higher than before.
  • Action: Review your roster. If you rely heavily on OT for 24/7 coverage, it might now be cheaper to hire an additional "reliever" staff member than to pay the new OT rates.

 

2. The Code on Social Security: Gratuity & Fixed Term Staff


Q3: We hire "Fixed Term" contract staff for specific projects (e.g., a 2-year renovation oversight). Do we owe them Gratuity?
A: Yes, and this is a major shift.

  • Old Rule: Gratuity was payable only after 5 years of continuous service.
  • New Rule: Fixed-Term Employees (FTEs) are eligible for Gratuity on a pro-rata basis, even if they work for less than 5 years (e.g., a 1-year contract = 15 days of salary as Gratuity).
  • Vendor Impact: Your manpower agencies will likely build a "Gratuity accrual" cost into their monthly invoices for all fixed-term staff, not just long-term ones.

Q4: Does this apply to our daily wage casual workers?
A: The codes push for "Universal Social Security." Even gig workers and platform workers are now recognized. While daily wagers on your direct payroll are rare in FM, if your vendor uses "gig" models for one-off cleaning/maintenance, ensure they are registered under the social security portal to avoid liability bouncing back to you.


3. OSH Code (Occupational Safety, Health & Working Conditions): Compliance & Operations


Q5: Our facility operates 24/7. Can we deploy women in night shifts (Housekeeping/Security)?
A: Yes, the OSH Code is progressive here, but with strict conditions.

  • The Rule: Women can work night shifts (7 PM – 6 AM) across all sectors.
  • The Condition: You (and the vendor) must ensure:
  1. Consent: Written consent from the employee.
  2. Safety: Adequate safety measures, lighting, and security.
  3. Transport: Safe transportation from the facility to their doorstep is mandatory.
  • FM Action: If you don't provide a cab drop for night-shift female staff, you cannot roster them.


Q6: We use multiple small contractors (plumbing, gardening). Do they all need a labour license?
A: The threshold has increased.

  • Old Rule: License needed if employing 20+ contract laborers.
  • New Rule: License needed only if employing 50+ contract laborers.
  • Impact: Smaller vendors (20-49 staff) no longer need a specific labour license, which reduces paperwork.

However, you (Principal Employer) must still ensure they provide PF/ESI benefits.


Q7: Many of our housekeeping staff are migrants from other states. Any special rules?
A: Yes. The definition of Inter-State Migrant Worker is expanded.

  • The Benefit: They are entitled to a Journey Allowance (a lump sum fare amount) to visit their hometown once a year.
  •  FM Action: Check if your housekeeping contract includes this payout. If the vendor doesn't pay it, the liability falls on the Principal Employer (your company).


4. General Administration & Liability

 

Q8: Who is liable if the security agency fails to pay PF to the guards?
A: You, the Principal Employer.

  • The Risk: The new codes explicitly empower authorities to recover dues from the Principal Employer if the contractor fails.
  • The Fix: Do not process the vendor's monthly invoice until they submit the Electronic Challan Cum Return (ECR) showing they have already deposited the PF/ESI for the previous month for your specific site employees.


Q9: What is the "Single License" concept I keep hearing about?
A: Previously, vendors needed separate licenses for each state or contract. The OSH Code introduces a Single All-India License for staffing firms.

  • Benefit: It simplifies vendor onboarding for you. If you have a national facility contract (e.g., offices in Delhi, Mumbai, Bangalore), your vendor can potentially operate under one unified license, reducing your compliance audit burden.

 

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