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Karma Management’s checklist for MSMEs under new labour codes

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  • December 17, 2025
Audits and Governance

Audits and Governance under the New Labour Codes

Managing compliance and governance across all business areas is essential for reducing risks and maintaining ethical practices. From vendor relationships to internal operations, businesses must ensure continuous and consistent adherence to legal, regulatory and industry standards as per the new labour codes, to avoid penalties and reputational damage.

Karma Management’s principle stand on labour audits

As lawful revolution takes place and regulatory demands increase, Karma Management offers an AI automated, flexible and scalable compliance software solution to assist business houses to meet obligations with less manual effort, more insightful process manoeuvring and a computerised auditing system.

Key features of the compliance and audit solution

Automation and audit readiness
Breach to closure workflow

Automated breach reporting, action tracking, rectification and final evaluated audit reporting.

Centralised compliance control

Centralised compliance obligations, consistent evaluation, risk indicators and a unified dashboard.

Analytics and remediation governance

Built-in analytics and workflows from breaches, including defined grace time for remediation.

Audit-ready documentation

Enables audit-ready documentation and supports the full lifecycle of regulatory audit compliance.

Karma Management Global provides expert audits and governance services, helping businesses navigate complex regulations while strengthening operational integrity and compliance.

Compliance checklist for MSMEs

Karma Management endeavours to keep small and medium business clients compliant at all times, giving them time to grow and expand core activities rather than getting bogged down with the intricacies of obligations that must be fulfilled alongside business objectives.

Why a lean checklist matters most for MSMEs

A lean compliance checklist helps SMEs avoid surprise penalties, late filing fees and contract losses. Small and medium enterprises often operate on thin margins where operational cost can pressure cash flow. Compliance clarity reduces rework and keeps responsibilities in control, especially when single individuals wear multiple hats across finance, HR and operations.

Building the core compliance checklist

Competent solution enablers like Karma Management are often desirable for building the core checklist and tackling open-ended compliance risks. This includes legal entity details, registrations, directors and beneficial owners, operating permits, registered address display and abstracts at entrances, documentation standards, code of conduct, data protection and monitoring systems, data protection policy, and third-party vendor compliance.

New Labour Code Compliance Checklist 2025 for MSMEs

Practical checklist blocks
Employee documentation compliance
  • Issue appointment letters to all employees
  • Maintain updated employee records
  • Provide salary slips every month
  • Maintain digital attendance, recommended
Wage and salary structure compliance
  • Ensure basic wages equal to fifty percent of CTC
  • Deduct PF, ESI, PT and LWF as per eligibility
  • Pay overtime at double wages
  • Pay salaries within the prescribed timeline
Working hours and weekly off compliance
  • Maintain forty-eight hour weekly limit
  • Provide mandatory weekly off
  • If women employees are engaged, follow rules for night shifts
Leave, safety and workplace conditions
  • Display statutory labour information at the workplace
  • Maintain basic safety and cleanliness standards
  • Provide ventilation, drinking water and sanitation
  • Maintain leave registers
Contract labour and gig workers compliance
  • If using contract workers, ensure contractor licence validity
  • Maintain records of contractual staff
  • Register gig or platform workers if applicable
Gratuity, bonus, social security and benefits
  • Gratuity for fixed-term employees after one year
  • Ensure maternity benefits for eligible employees
  • Maintain PF and ESI registers
  • Filing of statutory returns
Digital compliance, highly recommended
  • Keep all documents backed up digitally
  • Automate salary slips, attendance and payroll
  • Maintain digital proof of payment
Applicability of POSH, Shops and Child Labour Acts
  • If POSH Act is applicable, an ICC becomes relevant
  • If Shops Act is applicable, registration, registers and returns become relevant
  • If a child between fourteen years to eighteen years is engaged, applicable rules must be followed

Why this matters in 2025

2025 has brought the biggest labour reform in India’s history. The four Labour Codes have officially replaced 29 old laws. For small and medium sized businesses, startups, shops, factories and MSMEs, this means new compliance rules, new documents, new wage structures, new responsibilities and a new vision.

There is no cause for apprehension as long as you are supported by Karma Global, a veteran in this field with over two decades of operations. A dedicated team is positioned to handle compliance activities in a timely, measured and quantifiable manner with accurate delivery of results.

What smooth compliance helps you avoid

Karma Global makes it obvious that every small business must adhere to the new labour codes to run its establishment smoothly without hindrance or obstruction arising from regulatory action.

  • Penalties
  • Fines
  • Legal notices
  • Closure risks
  • Loss of government benefits
  • Warrant and imprisonment

Karma Global believes in abiding by the law and keeping clients and stakeholders compliant through a knowledgeable workforce of over 200 staff members conversant with the newly implemented governance under the labour codes.

For any assistance
Write to our team for audits, governance, payroll and labour code compliance support.
marketing@karmamgmt.com
Disclaimer: This content is an informational overview based on the inputs provided. Applicability may vary by establishment type, workforce composition and state-specific rules.

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