Introduction
The labour law landscape in India is undergoing significant changes as governments at both central and state levels refine regulations to improve workers’ rights and simplify compliance for employers. Checkout the Latest Wage and Bonus Rules in India. For business owners, HR teams, and professionals alike, staying updated is critical — failing to adapt can mean legal penalties, labour unrest, and compliance risks. This post summarises the key recent changes (2024–2025) that every employer should be aware of.
Major Recent Updates
1. Expansion of Minimum Wages (Code on Wages)
- Universal & Uniform Minimum Wages: As per the Code on Wages, 2019 (fully/partially implemented Nov 2025), every employee in the organized and unorganized sector now has a statutory right to minimum wages. States periodically revise minimum wages for unskilled, semi-skilled, and skilled workers to adjust for inflation and location (urban/rural slabs).
- Slabs & Allowances: Now split by geography (urban/rural) and sector. “Wages” now standardly include travel, meal, and housing allowances for the calculation of PF, gratuity, and overtime.
Impact: Update payroll systems immediately, inform staff, and re-calculate statutory contributions.
2. Changes In Working Hours & Overtime Regulations (OSH & Working Conditions Code)
- Working Hours: Some states’ new Shops & Establishments rules allow the extension of the daily cap to 9 hours (for certain sectors under exemptions) and formal weekly hour limits (standardizing at 48 hours/week), with premium overtime rules.
- Record-Keeping/Oversight: Digital attendance & overtime tracking is mandatory for audit and payroll.
Impact: Update attendance systems and policies. Overtime premium or compensatory offs are now strictly enforced.
3. Strengthening Of Social Security Compliance: PF & ESI Updates (Social Security Code)
- ESI Applicability: Threshold for mandatory Employee State Insurance (ESI) coverage has been lowered and wage ceiling raised (many states now up to ₹30,000/month).
- PF/EPF & Gratuity: New definitions standardize that ‘wages’ must comprise at least 50% of total pay, boosting long-term benefits but potentially reducing take-home pay.
- Digital compliance: All PF/ESI and gratuity claims now routed via Shram Suvidha or UAN/ESIC portals for transparency.
- Inclusion of Gig/Platform Workers: New social security cover for gig workers, with mandatory contributions from aggregators.
Impact: Check if your workforce falls under ESI/PF scope; register or update compliance.
4. Stricter Regulations for Contract Workers & Outsourced Staff
- Contract Labour Code: The federal contract labour applicability threshold increased from 20 to 50 workers (except for certain sectors). All-India common licenses valid for 5 years (vs. work-order based).
- Parity & Compliance: Contract workers must get the same minimum wages and key allowances as core employees. All contracts must be documented and digitally renewed.
- Transparency: Outsourcing agencies must maintain biometric attendance and clear PF contributions.
Impact: Ensure all contracts have parity, and digital records. Update contracting practices for compliance.
5. Greater Emphasis on Sexual Harassment Compliance at Workplace (Posh Act):
- Mandatory ICCs: All establishments with 10+ employees must form Internal Complaints Committees (ICCs). Compliance and disclosure requirements have been enhanced (e.g., Board reporting, mandatory training, SHe-Box registration, judicial supervision for non-compliance). Checkout the latest chapters of the POSH compliances in India.
Impact: Constitute ICCs, update and display policy, maintain training records, file annual compliance reports.
Key Takeaways for Employers:
- Payroll & Wages – Update minimum wage slabs; revise allowances, recalculate PF/Gratuity
- Attendance & OT – Ensure digital records for hours, overtime, & compensatory off
- Statutory Registration – Check PF/ESI/benefits applicability; register all eligible workers
- Contract Staff – Review/renegotiate contracts; ensure wage parity, documentation
- Workplace Policy – Form/update ICC, display PoSH policy, document compliance initiatives
How We Help (Our Services at Taxpertise Accounting):
At Taxpertise, we offer end-to-end compliance support — from updating your payroll with new minimum wages, to PF/ESI registration, contract worker audits, and policy documentation. Reach out if you want to stay compliant and focus on growing your business.
The Conclusion
As India moves toward a more transparent, digital, and worker-centric labour ecosystem, employers must stay one step ahead. The recent updates across wages, social security, working hours, contract labour, and workplace safety are not just legal requirements — they represent a shift toward better governance and long-term workforce stability. Businesses that proactively adapt their policies, payroll systems, and compliance frameworks will not only avoid penalties but also build stronger, more productive, and more engaged teams. In the coming years, compliance will be a core pillar of sustainable business growth. Staying informed and seeking expert guidance can help organisations navigate these changes with confidence and clarity.