Reimagining creative work through the new labour codes

On November 21, 2025, India rolled out four new Labour Codes, replacing 29 existing central labour laws. This consolidation marks a landmark shift in the country’s employment framework. It aims to simplify compliance, define wage structures, expand social security, and formalise several long-standing grey areas in workforce management.

What do these changes mean specifically for the advertising and marketing sector – an industry known for its pace, agility, and reliance on project-based and blended workforce models? Will agency leaders need to rethink how work is structured, talent is engaged, and compliance is managed?

Let’s look at it through the four codes.

A new definition of wages

The Code on Wages introduces a uniform definition of wages, requiring that at least 50% of total compensation be treated as basic pay. This directly affects the calculation of provident fund, gratuity, and other statutory benefits.

Historically, many businesses – including agencies – have structured pay to maximise take-home salaries while limiting statutory contributions. That model is no longer viable. Employers must now either increase the total cost to the company or restructure salaries in ways that may reduce net pay.

This shift requires careful balancing. While compliance is non-negotiable, agencies must also retain and motivate talent. Transparent communication and thoughtful payroll redesigns will be critical.

Freelancers, retainers, and fixed-term clarity

The Code on Social Security brings clear definitions to gig workers, platform workers, and fixed-term employees – with major implications for agencies that depend on freelance and retainer talent.

Many professionals operating as freelancers may now meet the criteria for classification as employees based on how their work is structured and managed. This introduces the risk of retrospective obligations and compliance scrutiny.

One viable alternative is fixed-term employment. It allows time-bound, project-specific engagement while ensuring full statutory benefits. Notably, gratuity now becomes payable after just one year of service, which agencies must factor into planning.

This does not reduce flexibility. It brings structure and legal clarity to how it is delivered.

Working hours and planning cycles

The Occupational Safety, Health and Working Conditions (OSH) Code limits the workweek to 48 hours and the daily spread-over to 12 hours, including breaks.

For the creative industry, this requires a shift in work planning. Late-night campaign sprints and extended pitch sessions, though common, must now be tracked and managed within formal boundaries. Overtime remains permitted but must be agreed upon and compensated at twice the regular wage rate.

This is a prompt to strengthen forecasting, build buffers, and reduce dependence on unstructured overwork. With disciplined project planning, agencies can stay compliant without compromising delivery timelines.

Financial readiness and statutory obligations

Two provisions in the Codes impact cash flow and operations.

First, final settlements must be completed within two working days of exit. This accelerates processes that previously took weeks. Coordination across HR, finance, IT, and admin must now happen in near real-time.

Second, leave encashment for unused days above a specified cap must be paid annually. This shifts a long-term liability into a recurring expense, often coinciding with slow payment cycles in Q4.

For smaller agencies, especially, this makes financial planning and system automation essential to staying compliant and cash-flow steady.

Fixed-term employment as a strategic tool 

The Industrial Relations Code formalises fixed-term contracts. Agencies can now hire for specific durations without the obligation to convert to permanent roles. This supports a workforce model that balances continuity with project-specific flexibility. Fixed-term employees receive the same statutory benefits as permanent staff, and the model works well for campaign-based or seasonal hiring.

By blending core teams with fixed-term contributors, agencies can stay agile without informal workarounds. The result is greater transparency for the business and fairer terms for talent.

Moving from reactive compliance to proactive culture

The Labour Codes arrive at a time of broader industry transformation. Clients expect faster, multi-platform execution. Talent preferences are shifting. Emerging technologies are changing creative workflows.

In this context, the Codes are not just a regulatory update. They offer a framework to build more professional and resilient organisations. They standardise how work is structured, reduce ambiguity in engagements, and encourage healthier employer-employee relationships. Compliance, when seen as part of operational design rather than a separate activity, strengthens trust with employees, clients, and partners alike.

As the new regulations come into force, agencies should:

• Audit compensation structures and align them with the new wage definition
• Move freelance and retainer roles into structured contracts, including fixed-term employment
• Improve time tracking and resource planning to stay within regulated work hours
• Use technology for payroll automation, leave tracking, and timely settlements
• Build reserves and plan cash flow for leave encashment and gratuity obligations
• Conduct internal awareness sessions so leaders understand how the new codes affect workflows

HR technology could play a key role here. Platforms that automate payroll, attendance, documentation, and compliance reporting can help agencies implement the Codes more efficiently and reduce manual errors, especially as state-level rules continue to evolve.

A more resilient way to work

The creative industry has long thrived on its energy, adaptability, and commitment to delivering under pressure. That spirit will remain. What must change is how creative work is supported – structurally, financially, and legally.

The Labour Codes are not a limit on creativity. They are an invitation to make creative careers more sustainable and secure. By adapting early and embedding these changes into culture and systems, agencies can build workplaces that attract top talent, meet compliance expectations, and scale with confidence.

Structure does not restrict potential. It helps unlock it – consistently, ethically, and at scale.

-Girish Rowjee, co-founder and CEO, greytHR