CVOCA Gyaan Ganga 42 – New Labour Codes & Latest Amnesty schemes under Labour laws

This Gyaan Ganga presents the labour reforms as an expansion of worker protection and social-security coverage, combined with simplified—but more technology-driven and time-sensitive—employer compliance.

EPF APPLICABILITY

Size Threshold	Mandatory for Organisations with 20 or more workers
Continuity Threshold	Once covered, EPF rules continue to apply even if employee count drops below 20
Salary Threshold	Rs.25000/- w.e.f  17.09.2026(earlier 15000/-)

ESIC APPLICABILITY

Factories	Applies to all non-seasonal factories using power with 10 or more workers, and non power using factories with 20 or more workers (or 10 in many notified areas)
Other Establishments	Covered under Sec 1(5) of ESI Act including shops, hotels, restaurants, cinemas, road transport undertakings, newspaper establishments, and private educational or medical institutions.
Continuity Threshold	Once covered, ESIC rules continue to apply even if employee count drops below 20
Salary Threshold	Rs.21000/-

India’s central government has officially implemented the four new Labour Codes nationwide, effective from November 21, 2025. This marks a major reform, consolidating 29 complex, outdated labour laws into a single, unified framework to simplify compliance and enhance worker protections.The four codes that have come into effect are:

• The Code on Wages, 2019

• The Industrial Relations Code, 2020

• The Code on Social Security, 2020

• The Occupational Safety, Health and Working Conditions Code, 2020

Summary of Changes in code and rules

• Mandatory Appointment Letters: All workers must receive a formal, written appointment letter with 16 points ensuring transparency and job security
• Universal Minimum Wages: The Code on Wages guarantees a statutory right to minimum wages for all workers, replacing the previous system that applied only to specific “scheduled” industries.
• Gig workers or Platform workers: Registration of Gig, Platform workers is made mandatary. Aggregator to pay contribution between 1 to 2% of the Annual turnover of the aggregator. The contribution shall not exceed 5% of the amount paid or payable to such gig and platform workers. 
• Gratuity after One Year: Fixed-term employees are now eligible for gratuity after just one year of service, down from the previous five-year requirement. (Not for permanent employee)
• Preventive Healthcare: Employers must provide a free annual health check-up for all workers above the age of 40 years.

• Simplified Compliance: The codes replace multiple registrations, licenses, and returns with a single, unified system (1 registration, 1 license, 1 return) for ease of doing business.
• Definition of wages and Structure Changes: Single statutory wage definition for all Labour Laws. The code sweeps away the inconsistencies of multiple wage definition. A uniform definition of “wages” mandates that basic pay must constitute at least 50% of the total cost- to-company (CTC).
• Fixed-Term Employment: Companies can hire fixed-term employees with the same benefits as permanent staff, offering increased flexibility while reducing reliance on contract labour.
• Mandatory Safety Committee: In Companies having more than 500 workers’ mandatory requirement of safety committee for work place accountability and report to National OSH Board
• FNF Settlement: Employers must complete your full and final (FNF) settlement within two working days of the last working day of the employee.
• Works Committee : Establishments that employ, or have employed, 100 or more workers  in the preceding 12 months to constitute a Works Committee
• Grievance Redressal Committee – Every industrial establishment employing 20 or more workers must constitute one or more Grievance Redressal Committees to address individual employee grievances
• Layoff and Retrenchment: Companies need government permission for layoffs and retrenchment only if they employ 300 or more workers (raised from 100)
• Creche facility :Companies having more than 50 employees to provide Creche Facility.
• OSH Registration : Registration of Factory and Establishment having 20 or more employees is now mandatory in form 1 on Shram suvidha Potal.
• Female Employee Night Duty: Consent for female employees to be obtained for working from 7.00 pm to 6.00 am
• Contractor : Single License for contractor in more than one states for whole of India
• Gratuity : Gratuity Insurance is mandatory for all establishment. Gratuity shall be settled with 30 days from the date it becomes payable or else simple interest notified by Central govt on long term deposit shall be payable.
• Maternity Benefit: A woman employee is eligible for maternity benefit if she has worked for at least 80 days in the preceding 12 months. Employers must grant 26 weeks of maternity benefit to eligible women employees.  

New Employees Provident Fund Act, 2026

Chapter III of the Code on Social Security, 2020 (sections 14 to 23) has replaced the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and were notified on 29^th June 2026.

Returns and portal duties	Form V, the consolidated return within 15 days from the date of applicability of the SchemeUpload Ownership return in Form VI within 15 days from the date of applicability of the SchemeMonthly upload of new, transferee and existing members on designated portal (para 24)Upload ECR in form VII within 15 days followed by paymentIn case of an ‘IW’ send the consolidated return within 15 daysSubmit Details of Branches and responsible person
Discontinued compliances	Form 2. Form 5/10 & Annual Return in Form 3A & 6A are discontinued.
Contractor and principal employer	The principal employer should ensure registration of establishment and declares all contractors engaged on the EPF portal Principal employer remains responsible for payment of Contact employees.
Damages – recast from annual to monthly rates	Less than two months, 0.25 per centTwo to four months, 0.50 per centBeyond four months, 1 per cent per month
Late Fee	Rs.500 per day for delay in filling any returnFor exempted-establishment returns, a graded fee of Rs.200 and then Rs.500 per day
Interest	interest now runs to the date on which final payment is authorized, irrespective of when the claim was received (

1. Special Provision I: Employees’ Enrolment Campaign, 2026 (Part A), closes 31^st October 2026.

• Any employer may seek coverage and enroll employees who joined between 01.04.2009 and 31.03.2026 and were left out.
• The employee’s past share is waived if it was not deducted; the employer pays its own share with interest under section 127 and administrative charges.
• Damages are a nominal Rs.100.

• Special Provision II: VISHWAS, 2026 (Part B), Six months 29.06.2026, extendable by up to six months.

• Damages for contribution defaults for periods prior to 14.06.2024, whether under section 14B of the repealed Act or section 128 of the Code and at any stage, are recomputed at the reduced para 23(1) rates, on condition that interest under section 7Q or section 127 is fully remitted and an undertaking not to appeal further is given.

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• Special Provision III: AMNESTY, 2026 (Part C), six months extendable on the Central Board’s recommendation.

• Trusts run on income-tax-recognition without a formal exemption notification may be regularized retrospectively, either as Category I (comply as un-exempted from a cut-off date) or Category II (continues as exempted), with audited trust accounts, special or compliance audits and KYC updation.

ESIC – New Wage Definition Under the Code on Social Security, 2020 

Under the old ESI Act framework, ESIC applicability was calculated on gross salary, which included all allowances. Under the Code on Social Security, 2020 (Section 2(88)), the definition of “wages” has been redefined.

Under this definition of wages means basic wages, dearness allowance and retaining allowance, and any other allowances exceeding 50% of total remuneration will be treated as wages. 

NOTE: If allowances exceed 50% of an employee’s total remuneration, the excess is added back to wages for ESI calculation purposes.

In practice, this means, Basic + DA must constitute at least 50% of total remuneration including Overtime. Any allowances beyond 50% of the total remuneration are treated as wages, and ESI is calculated on them.

Coverage extended to Medical and Educational Institutions:

Employees’ State Insurance Corporation (ESIC) issued a circular regarding coverage of educational institutions, medical institutions and other establishments in Maharashtra under the Code on Social Security, 2020.

This publication is intended to create awareness. Please consult your CA or financial advisor before taking any decision.

Team CVOCA