Understanding the compliance challenges faced by employers

Abstract

This research paper investigates the compliance challenges experienced by employers in implementing the New Labour Code 2025 in India. The study, conducted by Ankita, a freelance researcher based in India, employs a quantitative survey approach to gather comprehensive data from 200 employers across diverse sectors and firm sizes. Stratified random sampling was used to ensure representation from manufacturing, IT/services, retail, and construction industries. The findings reveal that only 20% of employers were fully aware of the Labour Code provisions, while 50% were partially aware, 25% minimally aware, and 5% not aware at all. Key compliance issues identified include increased administrative burden, legal interpretation difficulties, and financial constraints, lack of training or guidance, and inadequate digital infrastructure. Sector-wise, manufacturing and construction firms reported higher compliance difficulties, with more employers indicating significant challenges compared to retail and IT/services. Micro and small enterprises were more financially burdened, with more respondents reporting cost-related issues compared to large enterprises. Employers strongly supported remedial measures such as government-led training programs, simplified compliance tools, and sector-specific implementation guidelines. Data was analyzed using Microsoft Excel to identify quantitative patterns. The results suggest a substantial implementation gap that must be addressed through enhanced legal clarity, structured support mechanisms, and sector-specific policy interventions. This research contributes to understanding ground-level compliance realities and offers actionable recommendations for improving the effectiveness of the Labour Code 2025.