Mandatory HR Policies in India 2026: Labour Code Amendments

Clear HR policies protect your company legally, set employee expectations, and create a fair, consistent workplace. Whether you're a startup with 5 employees or a growing company with 100, having documented policies is essential — and in many cases, legally required in India.

2026 Labour Code Amendments: What Changed

India's four new labour codes — the Code on Wages, Industrial Relations Code, Social Security Code, and Occupational Safety, Health and Working Conditions (OSH) Code — were notified effective 21 November 2025, consolidating 29 existing central labour laws, with central rules taking effect from April 2026. Every policy below needs to be checked against these changes:

• The 50% wage rule — under Section 2(Y) of the Code on Wages, basic pay plus dearness allowance must now be at least 50% of total CTC. Where allowances currently exceed that, the excess is reclassified as "wages," which raises the base used for PF and gratuity — review your payroll salary structure before the next cycle.
• Appointment letters are now mandatory in every sector, including the unorganized sector — a written appointment letter can no longer be optional for any hire.
• Annual health checkups are mandatory for employees above 40 under the OSH Code, extending a requirement that previously applied only to workers in hazardous processes.
• Overtime must be paid at double the normal wage rate across all sectors, not just factories — update your attendance policy and overtime rules to match.

Mandatory HR Policies Under Indian Law

These policies are legally required for companies operating in India:

1. Prevention of Sexual Harassment (POSH) Policy

Under the Sexual Harassment of Women at Workplace Act, 2013, every organization must have a POSH policy and an Internal Complaints Committee (ICC). This applies to all workplaces, regardless of size. The policy must define sexual harassment, outline the complaint process, and detail the composition of the ICC.

2. Equal Opportunity & Anti-Discrimination Policy

Under the Rights of Persons with Disabilities Act, 2016 and constitutional provisions, companies with 20+ employees must have an equal opportunity policy. It should cover non-discrimination in hiring, promotions, and workplace treatment based on gender, religion, caste, disability, or other protected characteristics.

3. Leave Policy

Governed by state-level Shops & Establishments Acts and the Factories Act. Must define earned leave, casual leave, sick leave, and statutory leaves like maternity. Entitlements vary by state.

4. Maternity Benefit Policy

Under the Maternity Benefit Act, 2017, organizations with 10+ employees must provide 26 weeks of paid maternity leave. Companies with 50+ employees must also provide creche facilities.

5. Payment of Wages Policy

Under the Payment of Wages Act and the Code on Wages, 2019, employers must define pay schedules, salary structure, overtime rules, and deduction policies. Wages must be paid before the 7th of each month for companies with fewer than 1,000 employees.

6. Health & Safety Policy

Required under the Occupational Safety, Health and Working Conditions Code, 2020. Must cover workplace safety measures, fire safety, first aid provisions, and emergency procedures.

Recommended HR Policies for Growing Companies

While not legally mandated for all companies, these policies are strongly recommended:

Tips for Creating Effective HR Policies

1. Keep it simple — Write in plain language that every employee can understand
2. Be specific — Vague policies lead to confusion and inconsistent enforcement
3. Stay compliant — Ensure policies align with central and state labour laws
4. Get employee acknowledgment — Have employees sign that they've read and understood each policy
5. Review annually — Update policies when laws change or the company grows
6. Make policies accessible — Use an HRMS to publish and distribute policies digitally
7. Apply consistently — Policies must be enforced uniformly across all levels