H.L. Kumar & Associates offers specialised advisory for designing and auditing salary structures in line with India’s new Labour Codes, with a focus on practical, legally sound implementation for employers across sectors. The service leverages decades of labour law expertise and deep understanding of wage-related compliances under the Code on Wages and allied codes.
Service overview
This service covers the complete exercise of reviewing, restructuring and validating salary components in line with the Code on Wages and related Labour Codes. It is aimed at HR, payroll, finance and leadership teams that want to update their pay practices proactively and avoid disputes or penalties through…
Detailed review of existing pay breakdowns, flagging non-compliant elements such as housing allowances, travel reimbursements, or performance incentives.
Customized CTC models per employee grade, ensuring the 50% core wage minimum without raising overall payroll budgets.
Projections of statutory impacts on benefits like ESIC, annual bonuses, and termination pay across restructuring scenarios.
Why update salary structures now
The Labour Codes bring together multiple central labour laws and introduce a more uniform approach to wages, social security and related benefits. They also tighten the way “wages” are defined for the purpose of contributions, bonuses and other statutory dues. Leaving legacy salary structures unchanged can result in:
Non‑compliance with the revised legal definition of wages.
Higher payroll costs arising from incorrect component design.
Exposure to inspections, disputes and litigation from employees or authorities.
Scope of work
The “Devising and Audit of the Salary Structure According to the Labour Codes” service is delivered as a structured, end‑to‑end engagement, which may include:
Mapping existing salary components (basic, allowances, incentives, reimbursements, benefits) to the wage definition under the Labour Codes.
Identifying elements that could trigger non‑compliance, such as excessive allowances or structures that do not respect statutory thresholds.
Designing revised CTC and salary break‑ups that balance employee take‑home pay with the employer’s legal and financial obligations.
Aligning appointment letters, HR policies, payroll rules and internal HR/payroll systems with the revised structure.
Supporting internal communication so that employees clearly understand the changes and their impact.
Methodology and deliverables
The approach blends legal analysis with practical business impact assessment. Typical stages include:
Diagnostic review and gap analysis of current pay structures across grades and locations.
Scenario building and cost–benefit analysis of proposed changes on employer cost and employee net pay.
A changeover plan with timelines, documentation updates and process controls to ensure smooth implementation.
Periodic reviews or health checks to incorporate future amendments, state rules and key judicial precedents.
Why work with H.L. Kumar & Associates
The practice is led by seasoned labour law experts who have long experience in advising employers on wage, social security and industrial relations issues. Clients benefit from guidance that is firmly rooted in labour legislation but tailored to real‑world HR and business needs, resulting in salary structures that are both compliant and sustainable over time.
