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Labour Law Compliance Calculator

Find out where your organisation stands on Indian labour law compliance and the top risks you should fix this quarter.

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How compliant is your organisation, really?

Answer 6 quick questions about your workforce, payroll filings, and HR policies. Get an instant compliance score, top 3 risk areas, and a personalised action plan backed by Indian labour law standards.

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1

What best describes your workforce today?

Pick the option that matches your current composition.

👥
All full-time employees
Permanent staff on payroll, directly employed
🔀
Mix of FT & contractors
Combination of permanent and contractual workers
🤝
Contractor / gig-heavy
Majority are contract labour, vendors, or gig workers
2

How many employees does your organisation have?

Headcount triggers different statutory obligations under the 4 Labour Codes (in force from 21 Nov 2025).

Under 10
Most central labour laws not yet triggered
10 – 50
ESIC, POSH, OSH Code welfare obligations apply
51 – 300
Crèche, grievance committee, gratuity, full PF
300+
Full statutory stack incl. Standing Orders, contract labour
3

How does your team handle PF, ESIC and TDS filings?

Choose the scenario closest to your actual process.

⚙️
Fully automated
System calculates, validates & files — minimal manual work
📋
Mostly manual
HR or payroll team uses spreadsheets and reminders
⚠️
We miss deadlines
Some months slip we catch up when notices arrive
4

Which of these policies are documented and shared with employees?

Select all that apply. Tap again to deselect.

Leave Policy (casual, sick, earned)
Overtime & Working Hours
POSH Policy (Sexual Harassment)
Code of Conduct / Handbook
Grievance Redressal Policy
Maternity & Parental Leave
5

How do you handle vendor / contract labour compliance audits?

Choose the statement that best reflects your current approach.

We audit thoroughly
Regular checks of PF, ESIC, wages, documentation
🔍
Basic checks only
Contracts and PAN, but not deep compliance
🤞
We trust vendors
Assume they're compliant, rarely verify
We don't track this
No formal audit or visibility
6

If a labour inspector visited tomorrow what would happen?

Be honest. This is the most useful gut-check.

We're ready
All registers, records, and documents are current
Mostly ready
Most things in order, a few gaps we know about
We'd be scrambling
Need a few days to pull everything together
Not prepared
No clear picture of what we'd need to show
0 out of 100
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Calculating...

⚠️ Your Top Risk Areas

✅ Your Action Plan

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Labour Law Compliance Calculator – Free | Pocket HRMS
29→4
Central labour laws consolidated into 4 new codes
400+
State labour acts across India to track
67%
SMEs faced a compliance notice in a recent fiscal year
₹2.4L+
Average penalty per compliance violation

Assessed Across All 4 Labour Codes

India's four new Labour Codes consolidate 29 central laws into a single compliance framework. This calculator evaluates your exposure across every code.

01
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Code on Wages

Checks your overtime calculation method, wage definition compliance (the 50% rule), minimum wage applicability by state, and payment timeline adherence under the unified wage framework.

03
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OSH Code (Safety & Working Conditions)

Reviews working hours, updated leave entitlement rules (180-day eligibility threshold), workplace safety records, facility requirements, and establishment registration status.

04
🤝

Industrial Relations Code

Assesses standing orders compliance, grievance redressal mechanisms, fixed-term employment handling, and your organisation's overall IR readiness benchmarked to your headcount.

Understanding Your Compliance Risk Score

Your score is a 0–100 composite index across all four Labour Codes. Here's what each range means for your organisation.

Score Risk Level What It Means Recommended Action
80–100 ✓ Low Risk Strong compliance posture. Minor gaps may still exist. Prioritise record-keeping and audit trails.
60–79 ⚠ Moderate Risk Some exposure areas identified across codes. Act on top-flagged items before next payroll cycle.
40–59 ● Moderate-High Risk Multiple gaps across Labour Codes detected. Initiate remediation with payroll and legal team.
0–39 ✕ High Risk Critical non-compliance across one or more codes. Seek legal counsel and initiate a full compliance audit.
🔍
Audit Triggered by 1 Complaint
Under the OSH Code and Code on Wages, a single employee complaint can trigger a full inspection — no advance notice required.
💸
Penalties from ₹10,000 to Several Lakhs
Financial penalties vary by violation type. Persistent PF defaults can attract criminal proceedings against company directors.
🚫
Operational Shutdowns
Repeated safety violations under the OSH Code can result in work stoppages and suspension of operations.
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Reputational & Investor Risk
Non-compliance impacts employee trust, board credibility, due-diligence outcomes, and government contract eligibility.

Labour Law Compliance Is Non-Negotiable in India

India's statutory compliance framework is among the most layered in the world with over 400 state labour acts and thousands of unique compliance obligations. Most organisations believe they are compliant. The problem is the gap between assumption and verification.

  • Risk protectionAvoids penalties, inspections, and legal disputes that stall operations.
  • Employee trustBuilds transparency and fairness, improving morale and retention.
  • Investor confidenceClean compliance records boost valuation and due-diligence outcomes.
  • Operational continuityPrevents shutdowns or delays due to regulatory violations.
  • Brand credibilityDemonstrates responsibility in the Indian market.

The Compliance Mistakes Most Indian Employers Make

These are the six most common gaps flagged by our compliance calculator — and the ones most likely to attract audit scrutiny.

Gap 01

Misapplying the 50% Wage Rule

The Code on Wages mandates basic pay + DA + retaining allowance form at least 50% of total CTC. Many organisations migrated payroll structures without recalculating — leaving PF, gratuity, and bonus calculations incorrect.

Gap 02

Incorrect Overtime Calculation

Overtime must now be calculated on the new unified wage definition — not just basic salary. This is one of the most common miscalculations found across Indian employers of all sizes.

Gap 03

Contractor Coverage Gaps

The Social Security Code extends PF and benefits to fixed-term and certain contract workers. Organisations that haven't reviewed their contractor workforce against the new framework carry significant hidden liability.

Gap 04

Outdated Leave Entitlement

The OSH Code reduces the minimum service period for earned leave eligibility from 240 working days to 180. Leave policies that haven't been updated are technically non-compliant from the date the Code takes effect.

Gap 05

State-Specific Rule Mismatches

Central codes are supplemented by state-specific rules that vary significantly for minimum wages, working hours, and professional tax. A company compliant in Maharashtra may have gaps in Karnataka or Tamil Nadu.

Gap 06

Assuming Your HRMS Is Doing the Work

Technology enforces the rules you configure. If payroll workflows were set up before the Labour Codes were notified, or state-specific rules were never configured, your HRMS may be calculating incorrectly — at scale.

Frequently Asked Questions

Everything HR leaders need to know about India's Labour Law Compliance framework — answered clearly.

India has consolidated 29 central labour laws into four codes: the Code on Wages (2019), the Code on Social Security (2020), the Occupational Safety, Health and Working Conditions Code (2020), and the Industrial Relations Code (2020). These codes restructure how wages are defined, how social security is calculated, how workplace safety is governed, and how employer-employee disputes are managed.
Yes. The new Labour Codes apply to all establishments covered under the respective acts — with thresholds varying by code. The Code on Wages applies to all employers regardless of size, while certain OSH Code provisions apply to establishments above a specified employee count. State-specific rules further determine applicability thresholds for your location and industry.
The Code on Wages mandates that an employee's "wages" — defined as basic pay, dearness allowance, and retaining allowance — must collectively constitute at least 50% of total CTC. This impacts how PF contributions, gratuity, bonus, and other statutory benefits are calculated. Employers with allowance-heavy pay structures must restructure salary breakdowns accordingly.
Penalties vary by violation type. Financial penalties can range from ₹10,000 for minor violations to several lakhs for persistent defaults. In cases involving PF arrears or repeated safety violations, criminal proceedings against company directors are also possible. Non-compliance can also result in operational shutdowns, ongoing audit scrutiny, and loss of government contracts.
The calculator maps your inputs — industry, company size, state, and responses to compliance-specific questions — against the applicable provisions of all four Labour Codes. Each answer is weighted based on its compliance impact, and the composite score reflects your estimated exposure. The output is indicative, not a legal audit, and should be used as a starting point for internal review and remediation.
Pocket HRMS automates statutory compliance at every stage of the payroll cycle — from accurate wage calculation and PF/ESI deductions to on-time filing and digital record-keeping. The software is updated to reflect the latest central and state-level notifications, so your compliance stays current without manual intervention. Features include a built-in compliance calendar, auto-generated statutory registers, and state-specific payroll rules for Maharashtra, Karnataka, Tamil Nadu, Delhi, and more.

Stay 100% Compliant with Pocket HRMS

Labour law compliance isn't a one-time exercise — it's an ongoing operational responsibility. Let Pocket HRMS automate the calculations, track state-specific changes, and keep your business audit-ready year after year.

Auto-calculates PF, ESI & Gratuity Built-in compliance calendar State-specific payroll rules Audit-ready registers & reports Trusted by 10,000+ businesses in India

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