Labour Law Compliance in Pakistan – Complete Guide 2026

In 2026, labour compliance has become critical due to:

• Increased labour inspections and audits

• Mandatory digital employee records

• Strict enforcement of minimum wage laws

• Higher penalties for non-compliance

• Growing demand for ethical and compliant businesses

• Requirement for ISO, social compliance, and buyer audits

Non-compliance can lead to fines, business suspension, legal cases, and blacklisting by clients.

Below are the major labour laws businesses must comply with:

1. Factories Act, 1934

Applies to manufacturing units and covers:

• Working hours

• Health and safety

• Cleanliness and ventilation

• Machinery safety

• Welfare facilities

2. Shops and Establishment Ordinance / Act

Applicable to offices, shops, and commercial establishments:

• Office timing regulations

• Weekly holidays

• Overtime rules

• Employment contracts

3. Minimum Wages Act

• Minimum wages notified annually by provincial governments

• Separate wage rates for skilled, semi-skilled, and unskilled workers

• Mandatory compliance for all employers

4. Payment of Wages Act

• Timely salary payment

• Wage deductions rules

• Payslip issuance

5. Employees Old-Age Benefits Institution (EOBI)

• Mandatory registration for eligible organizations

• Monthly contribution for employees

• Pension and old-age benefits

6. Provincial Social Security Ordinance

• Medical and cash benefits for employees

• Registration with provincial social security institutions

7. Industrial & Commercial Employment (Standing Orders)

• Employment terms

• Probation and confirmation

• Termination procedures

• Disciplinary actions

8. Occupational Safety and Health (OSH) Laws

• Workplace safety policies

• Risk assessments

• Safety training

• Emergency preparedness