Tamil Nadu Labour Law Compliance Guide for Employers, 2026 Edition

The 4 Labour Codes, What Changed (Effective 21 November 2025)

India's four new Labour Codes, the Code on Wages, the Industrial Relations Code, the Code on Social Security, and the Occupational Safety, Health & Working Conditions (OSH) Code: came into force on 21 November 2025, consolidating 29 central labour laws into four.

What this means for Tamil Nadu employers:

• The Codes now sit above many existing Tamil Nadu state laws. Several state acts (Shops & Establishments, Professional Tax administration, Labour Welfare Fund) continue to operate, but increasingly within the framework of the Codes.
• "Wages" is now defined uniformly: basic + DA + retaining allowance must be at least 50% of total remuneration, which changes PF, gratuity and bonus calculations for most salary structures.
• Appointment letters are now mandatory for every employee.
• Important: the Codes have been in force since 21 November 2025. Tamil Nadu has pre-published draft state rules under the Codes (for example the Code on Wages (Tamil Nadu) Rules, 2022), but we have not found final Tamil Nadu rules as of 21 October 2026. Until they are notified, employers should comply with both the existing Tamil Nadu acts and the new Codes, we track both so you stay covered.

Two practical notes. State rules under the four codes are notified state by state; for a worked example of what notified rules change, see our Karnataka Labour Code state rules guide. And if you would rather not run payroll and attendance registers in-house, compare the top payroll outsourcing companies in India, or move to a cloud HRMS with an attendance module that keeps these records current automatically.

Last reviewed: 21 October 2026. Labour Code rules are evolving; we update these guides as new notifications are issued.

Tamil Nadu Labour Code Rules 2026: OSH and Wage Rules

The four Labour Codes apply across India, but each state notifies its own rules under them. For employers in Tamil Nadu, that means checking two things: the central Codes and the Tamil Nadu rules under each Code.

• Code on Wages: state rules on minimum wages, wage payment and bonus.
• OSH Code: state rules on registration, licences, working hours and welfare facilities.
• Industrial Relations Code: state rules on standing orders, layoffs and disputes.
• Social Security Code: state rules on social security schemes and welfare boards.

What to do now: review your payroll, contracts and registers against the Tamil Nadu rules as they are notified, and keep following the existing state acts until they are fully replaced. Manufacturers around Chennai, Hosur and Coimbatore and IT companies in Chennai should check both.

Tamil Nadu-Specific Labour Laws

1. Professional Tax in Tamil Nadu (Greater Chennai Corporation rates)

Important: professional tax in Tamil Nadu is levied by the local body, not by the state. There is no single state-wide Tamil Nadu rate. The slabs below are those of the Greater Chennai Corporation. If your establishment is outside Chennai, confirm the rates with your own municipal corporation, municipality or town panchayat before you deduct, because they differ.

• Maximum annual PT: ₹2,500
• Filing frequency: Half-yearly (unlike most states which are monthly)
• Rates: Greater Chennai Corporation rates in force from the second half of 2024-25.
• Returns: employers deduct PT every half-year (April to September and October to March) and file the half-yearly return with proof of payment before 15 September and 15 February under the urban local body rules. Confirm the exact rates and dates with your own corporation or municipality if you are outside Chennai.

2. Tamil Nadu Labour Welfare Fund (TNLWF)

• Employee contribution: ₹20 a year
• Employer contribution: ₹40 a year per employee (the Government adds ₹20); rates from 2022, G.O. No. 161 of 2 December 2022
• When to pay: once a year, before 31 January, for every employee on the rolls on 31 December. The employer deducts the employee’s share and pays both shares to the Tamil Nadu Labour Welfare Board online (cheques are not accepted since 1 November 2024).

3. Tamil Nadu Shops and Establishments Act, 1947

• Registration within 30 days
• Working hours: 8 hours/day, 48 hours/week
• Overtime at double the rate
• Weekly holiday mandatory
• Leave: 12 days earned, 12 days sick and 12 days casual leave a year (see the table below)
• IT/ITES exemptions available on working hours

Leave and working hours under the Tamil Nadu Shops and Establishments Act

The Tamil Nadu Shops and Establishments Act, 1947 sets the minimum leave and working-hour rules for shops, offices and commercial establishments in Tamil Nadu. Your leave policy can be more generous, never less.

Open all 365 days: Tamil Nadu has extended the permission for all shops and establishments to stay open on all 365 days for three more years from 24 August 2026 (G.O. (Rt.) No. 231, Labour Welfare and Skill Development Department). Conditions include a weekly day off for every employee on rotation, wages and overtime paid into a bank account, and a limit of 10.5 hours a day and 57 hours a week including overtime. Women employees should not work after 8 pm without their written consent, and need transport and safety arrangements if they do.

Sources: Tamil Nadu Shops and Establishments Act, 1947 (India Code); Tamil Nadu Government Gazette Extraordinary No. 356, 24 August 2026.

Central Laws in Tamil Nadu

• EPF: 12% + 12% employer/employee on wages up to ₹25,000 (ceiling from 17 September 2026)
• ESIC: 3.25% + 0.75% for wages up to ₹21,000
• Statutory bonus: 8.33% to 20% (Code on Wages)
• Gratuity: after 5 years of service (Code on Social Security)
• Minimum wages: Tamil Nadu rates by employment and zone

Tamil Nadu Compliance Calendar

Industries Served in Tamil Nadu

• Automotive: Chennai (Detroit of India), Sriperumbudur, Oragadam
• IT & Software: OMR IT Corridor, Tidel Park, SIPCOT IT Park
• Manufacturing: Ambattur, Guindy, Hosur industrial areas
• Textiles: Coimbatore, Tirupur textile clusters
• Healthcare: Chennai's medical tourism corridor

FAQs, Tamil Nadu Labour Compliance

How often is PT filed in Tamil Nadu?

Tamil Nadu professional tax is paid half-yearly, for April to September and October to March. Employers file the half-yearly return before 15 September and 15 February under the urban local body rules; check your corporation or municipality for its exact dates.

What are the TNLWF contribution rates?

Tamil Nadu Labour Welfare Fund is ₹20 a year from the employee and ₹40 a year from the employer, paid once a year before 31 January for every employee on the rolls on 31 December.

Do Chennai IT companies get compliance exemptions?

Tamil Nadu provides working hour and night shift exemptions for IT/ITES companies. However, all statutory contributions (PF, ESIC, PT, TDS) remain mandatory.

What is the minimum wage in Tamil Nadu?

Tamil Nadu sets minimum wages separately for each scheduled employment and zone, with a dearness allowance on top. Check the latest Labour Department notification for your employment and zone, and pay the higher of that rate or your agreed wage.

How does HRTailor handle TN compliance?

HRTailor manages Tamil Nadu's unique half-yearly PT filing, TNLWF contributions, Shops Act compliance, and all central law filings. Our system automatically applies TN-specific rules.

When do the new labour codes apply in Tamil Nadu?

The four Labour Codes have applied across India since 21 November 2025. Each state also notifies its own rules under the Codes, so Tamil Nadu employers must follow both the Codes and the state rules as they are notified. HRTailor tracks every Tamil Nadu notification and updates your compliance as rules change.

What are the Tamil Nadu OSH Rules 2026?

They are Tamil Nadu's state rules under the Occupational Safety, Health and Working Conditions Code. They cover registration, licences, working hours, welfare facilities and safety duties for establishments in Tamil Nadu. Check how they apply to your factories, shops and contract workers, or ask HRTailor to review it for you.