New labour codes to drive wider adoption of fixed-term employment: Report

Mumbai: Nearly 75 per cent of companies expect a rise in structured fixed-term employment as companies respond to the implementation of new labour codes, signalling a shift towards greater workforce formalisation, according to a report.

The shift toward workforce formalisation is becoming increasingly evident, as an overwhelming 75 per cent of respondents anticipate greater adoption of structured fixed-term employment as a strategic response to the new labour codes, HR solutions provider Genius HRTech said in the report.

Also Read: Four Labour Codes implemented in India in one of biggest workforce reforms


This signals a decisive movement toward more formal, compliant, and documented employment arrangements, it added.

In November 2025, the government consolidated and implemented 29 Central labour laws into four comprehensive codes - Wages, Industrial Relations, Social Security, and Occupational Safety, to simplify compliance, modernise regulations, and enhance worker welfare.

The report by Genius HRTech is based on inputs from 1,459 companies during January 2026 across sectors, pan-India.

It further revealed that 40 per cent of respondents stated that their organisations are fully ready to implement the four labour codes when asked about overall readiness.

However, 22 per cent reported being partially ready, while 17 per cent are still in the early preparation stage, and 21 per cent have not yet initiated any implementation efforts, highlighting a significant readiness gap when reforms approach execution, the report added.

Meanwhile, the report found that nearly half (46 per cent) of organisations have not initiated a structured gap analysis across HR, payroll, and compliance systems, and only 18 per cent have completed this exercise.

While 21 per cent are currently in progress and 15 per cent are still planning structured gap analysis, which indicates that systemic readiness may lag behind perceived organisational confidence, the report said.

The Code on Wages is expected to drive the most substantial change as 67 per cent of respondents identified it as having the greatest impact on workforce structures, the report said, adding that wage definition realignment, payroll restructuring, and compliance recalibration are expected to alter cost frameworks.

Also Read: Gratuity after 1 year under new labour codes: What fixed-term employees should know

In alignment with this, 39 per cent of organisations report that their wage structures are fully aligned with revised definitions under the Code on Wages, it stated.

Despite these transitional challenges, long-term sentiment remains optimistic as a majority (60 per cent) viewed the new Labour Codes as a powerful enabler of employment formalisation and compliance in India.

For organisations, this is a strategic transformation that demands proactive realignment of wage structures, social security frameworks and workforce models. Those who act early will emerge stronger, more compliant and more resilient, provided implementation balances governance with practical cost realities, Genius HRTech Chairman and Managing Director RP Yadav said.