Workforce-heavy companies such as TCS, Larsen & Toubro, Infosys and HCL Technologies reported significant provisioning increases. Analysts say the reforms may raise long-term employee costs while boosting retirement savings.
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The implementation of the new labour codes from November 21, 2025, has required companies to make large, one-time adjustments to their books in the third quarter of FY26 to increase the reserves maintained for employees’ social security benefits.
businessline analysis of the stand-alone results of companies in the Nifty50 index for the third quarter of FY26 shows that these firms have incurred additional expenditure amounting to ₹13,161 crore due to the revised rules.
The adjustment is required because the new labour code stipulates that the basic salary must constitute at least 50 per cent of the overall salary. This impacts the provident fund and other statutory benefits. The other important change is that gratuity must be paid to all fixed-term employees after one continuous year of service, down from five years earlier.
Workforce-Heavy Firms hit
TCS, due to its large workforce, leads the list of companies that have taken the biggest hits. TCS reported, “incremental impact consisting of gratuity of ₹1,816 crore and long-term compensated absences of ₹312 crore,” due to the new code. Larsen & Toubro followed with an increase in employee benefits of ₹1,791 crore. Other IT companies, such as Infosys (₹1,146 crore), HCL Technologies (₹948 crore), and Wipro (₹303 crore), also witnessed a significant increase in employee expenses.
Other companies with high provisioning due to the labour code were InterGlobe Aviation at ₹969 crore, HDFC Bank at ₹800 crore and Maruti Suzuki with ₹594 crore.
No Material Impact
A second group of big employers, including Reliance Industries, SBI, Power Grid, ONGC, NTPC, Coal India, and Eternal, anticipated a negligible financial impact due to the new labour code in Q3 FY26. According to Reliance Industries, “The incremental impact of these changes assessed by the company on the basis of the information available, is not material.”
SBI, on the other hand, indicated that, “based on the broad assessment carried by the management, the Bank continues to comply with the major provisions and any consequential impact arising therefrom will be assessed and appropriately accounted upon such notification.”
Adani Enterprises acknowledged the reforms in its earnings review but did not separately quantify the financial impact. Meanwhile, Axis Bank reported an additional outgo of ₹25 crore, while providing for an estimated future cost of ₹434 crore for the implementation of the new labour code.
According to Neha Jain, of CHOICE International, “India’s four Labour Codes represent the most significant overhaul of the country’s employment framework in decades. While full implementation is still underway, for white-collar heavy sectors, this could raise long-term employee costs by 3–8 per cent, while also increasing retirement savings for employees.”
Published on February 16, 2026
