Kanoon Mitra Solutions
Kanoon Mitra Solutions
Labour Law Compliance · Pan-India
103+ Answered Questions · Kept Current

Labour Law & Payroll Compliance — Frequently Asked Questions

Wages and the 50% rule, EPF, ESI, gratuity, bonus, maternity, leave, retrenchment, POSH, contract labour, and the Income-tax Act, 2025 — answered plainly, grounded in the Ministry of Labour & Employment's own clarifications and the current statute. Can't find your question? Ask Dost, our on-site assistant, in the bottom-right corner.

About Kanoon Mitra Solutions

What services does Kanoon Mitra Solutions offer?

Compliance audits (contractor labour, EPF/ESI, minimum wage), 12 statutory registers, 7 statutory calculators (Gratuity, Bonus, Maternity Benefit, Retrenchment Compensation, EPF, ESIC, Employees' Compensation), personnel documents (Offer Letter through Full & Final Settlement, plus Bulk Onboarding), discipline & Standing Orders documentation, and 166 employer policies mapped across 24 industry types.

Where are your offices located?

We have two offices: Gurugram (Flat No. 104, 47-L, New Colony, Sector 7, Gurugram, Haryana - 122001) and Ludhiana (SCF 4059, 200 Feet Main Road, Dugri, Ludhiana - 141013). We serve clients Pan-India.

How can I contact you?

Call us at +91 98550-25790, +91 98141-14883, or +91 98149-14883, or email kanoonmitrasolutions@gmail.com. You can also use the "Book a Call" form on this page and we'll call you back.

Is this legal advice?

No — this site is a professional working aid, not a substitute for retaining counsel. For advice specific to your establishment, please book a call with our consultants.

How do I book a consultation?

Scroll down to the "Book a Call With Our Consultant" section on this page and share your name, phone number and a bit about what you need — we'll call you back, no obligation. Or just call/email us directly using the contact details above.

Do statutory registers print in the official government format?

Yes — every register we generate is laid out to match the prescribed official format, not a reformatted spreadsheet, so it's ready to print and file as-is.

What personnel documents can you generate?

Offer Letter, Appointment Letter, Joining Form, Experience Certificate, Relieving Letter, and Full & Final Settlement — plus Bulk Onboarding, which turns one uploaded list of new joiners into every pre-joining document for the whole batch at once.

What statutory calculators do you offer?

Gratuity, Bonus, Maternity Benefit, Retrenchment Compensation, EPF, ESIC, and Employees' Compensation calculators — all state-wise minimum/floor wage aware.

Do you help with POSH compliance?

Yes — POSH policy drafting and Internal Complaints Committee (ICC) documentation are part of our Policy & Governance and Discipline & Standing Orders services. Book a call to discuss your establishment's specific requirements.

What is the Compliance Data / Live Rates page?

It's a free-to-browse page with current, human-verified state-wise Minimum Wage, Professional Tax and Labour Welfare Fund rates, plus central Labour Code gazette notifications — updated continuously. Click "Explore Live Compliance Data" on this page to see it.

How much does this cost?

See the "Get Full Access" section on this page for plans, or book a call and we'll scope it to your establishment's size and needs.

What is a contractor labour compliance audit?

A contractor labour compliance audit reviews an establishment's engagement of contract labour against statutory requirements — EPF/ESI payment and coverage, minimum wage payment, licence and registration status, statutory registers, and other obligations under the Contract Labour provisions of the applicable Labour Codes.

The 4 New Labour Codes — General

What are the 4 new Labour Codes in India?

India's labour laws have been consolidated into 4 Codes: the Code on Wages 2019, the Occupational Safety, Health and Working Conditions Code 2020, the Code on Social Security 2020, and the Industrial Relations Code 2020. Together they replace 29 earlier central labour statutes.

What statutory registers must an employer maintain under the new Labour Codes?

Employers must maintain an Employee Register, a Register of Wages/Overtime/Deductions, an Attendance Register cum Muster Roll, a Register of Leave with Wages, a Register of Accidents and Dangerous Occurrences, a Nomination Form, and a Register of Women Employees, among others — the exact set depends on which Code's rules apply to your establishment and its state. We can tell you exactly which ones apply if you book a call with us.

Does minimum wage vary by state in India?

Yes. Minimum wages in India are notified separately by each state government, and revised periodically — often twice a year via Variable Dearness Allowance changes — so the applicable rate depends on the state and the employee's skill category (unskilled, semi-skilled, skilled, highly skilled). See our Compliance Data page for current, human-verified rates.

Will the new labour codes reduce employees' take-home salary?

Often, yes, in the short term — when basic pay has to rise to meet the 50% wage floor, more of the CTC gets redirected into PF and gratuity (long-term retirement benefits) rather than monthly in-hand pay. Employees with historically low basic pay and high allowances (common in IT/services) typically see the biggest shift. It's worth preparing an explanation for your workforce before payroll changes land, not after.

Do the new labour codes apply to remote or work-from-home employees?

Yes — the labour codes apply based on the employment relationship, not the employee's physical work location, so remote and WFH employees are covered the same as anyone working on-site.

Where can an employee file a complaint about labour law non-compliance?

The first stop is usually the relevant state's Labour Department or Labour Commissioner's office — supported by payslips, the appointment letter and any written communication. As an employer, the better move is fixing gaps before they reach that stage — that's exactly what our compliance audits are for.

What's the difference between 'employee' and 'worker' under the new labour codes?

'Employee' is the broader term — it covers everyone hired for wages, including managerial, supervisory and administrative staff, extending statutory wage/safety protections to senior roles that were largely excluded before. 'Worker' is narrower — manual, operational, technical or clerical roles — and specifically excludes people employed mainly in a managerial or administrative capacity, and supervisory staff drawing wages above Rs. 18,000/month (see our FAQ on that threshold specifically). Some entitlements (like certain leave provisions) are written to apply to 'workers' only, so which bucket a role falls into genuinely changes what's owed.

Who counts as an 'employer' under the new labour codes?

Anyone employing workers directly or indirectly — this includes heads of departments, factory managers, independent contractors engaging labour, anyone with ultimate control over an establishment, and (where the employer has died) their legal representative. In a contract labour arrangement, both the contractor and the principal employer can carry employer-type obligations simultaneously for different purposes — see our FAQ on principal employer liability for contractor defaults.

What are the penalties for non-compliance under the new labour codes?

First-time offences under the Code on Wages are generally fine-only, up to Rs. 50,000. If the same offence repeats within 5 years, it escalates to up to 3 months' imprisonment, a fine up to Rs. 1,00,000, or both. Each of the 4 Codes has its own penalty schedule with broadly similar first-offence/repeat-offence escalation, so getting flagged once and fixing it promptly matters a lot more than the standalone fine amount suggests.

What does 'compounding of offences' mean under the labour codes?

A one-time route to resolve a compliance lapse by paying a set amount instead of facing prosecution — 50% of the maximum fine for fine-only offences, or 75% for offences that carry imprisonment — settled with a notified Gazetted Officer. It's available only for the first offence; a second or subsequent offence of the same kind faces the actual penalty provisions, not compounding. Each Code has its own compounding section (Wages Code Sec. 56, Social Security Code Sec. 138, OSH Code Sec. 114, IR Code Sec. 89).

The 50% Wage Rule & National Floor Wage

What is the 50% wage rule under the new labour codes?

Under the Code on Wages, 'wages' (basic pay plus certain allowances) must generally not fall below 50% of an employee's total remuneration — so CTC structures that push most of the pay into excluded allowances typically need rebalancing. This directly affects PF and gratuity, since both are calculated on wages, not total CTC. Book a call if you want your own CTC structure checked against this.

Does overtime count toward the 50% wage floor calculation?

Per the Ministry of Labour & Employment's own clarification (16 March 2026, non-binding), yes — overtime allowance is included in the components counted toward the 50% wage floor, as are employer PF and pension contributions. Gratuity and ESI are excluded from the total remuneration figure, and annual performance-based incentives don't count as wages.

Is there a cap on in-kind wage components like food coupons or ration?

Yes — per the Ministry's clarification, in-kind remuneration (food coupons, ration, mobile recharge, etc.) does count as remuneration, but is capped at 15% of an employee's total wages.

What is the National Floor Wage and has it been notified yet?

Section 9 of the Code on Wages empowers the Central Government to fix a National Floor Wage, after consulting the Central Advisory Board — once notified, no state can set a minimum wage below it. As of this writing it has NOT yet been formally notified as a binding statutory floor; India has instead followed a non-binding 'National Floor Level Minimum Wage' benchmark (₹178/day) that states are only advised, not required, to respect. The Ministry began the formal consultation process in mid-2026. This is worth checking again periodically since it directly resets every state's minimum wage floor once notified.

Overtime & Working Hours

Who is eligible for overtime pay under the new labour codes?

Any employee whose minimum wage is prescribed under the Code qualifies for overtime — this includes supervisory and managerial staff, not just workers in the traditional sense. Overtime is triggered beyond 8 hours a day or 48 hours a week, and is payable at double the normal wage rate.

What is the maximum working hours limit in India?

8 hours a day / 48 hours a week is the standard ceiling under the Factories Act and the OSH Code, with any work beyond that owed overtime. State Shops & Establishments Acts (which govern offices, retail, IT/ITES) largely mirror this, though exact rates and daily caps can vary by state.

What is the overtime pay rate?

Factories Act establishments pay double the ordinary rate (Basic+DA) for hours beyond 9/day or 48/week. Shops & Establishments Acts vary more by state — many mandate 1.5× for commercial/office establishments rather than 2×. Factory overtime is also capped at 50 hours per quarter under Section 64 without special government exemption.

Provident Fund (EPF)

When does an establishment have to register for EPF?

Any factory or establishment employing 20 or more persons must register with EPFO within 30 days of crossing that count, and remains covered even if headcount later drops below 20. On approval you get a 15-digit Establishment Code, used for every future ECR filing and challan payment.

What are the EPF contribution rates for employer and employee?

Employee contributes 12% of Basic + DA. Employer also contributes 12% overall, split as 3.67% to the EPF account and 8.33% to the Employees' Pension Scheme (EPS) — both calculated on the ₹15,000/month wage ceiling by default, or on actual Basic+DA for establishments that opt out of the ceiling. Use our EPF Calculator for a full monthly breakdown.

When can an employee withdraw their PF balance?

Full withdrawal is allowed after 2 months of unemployment (up to 75% after 1 month of unemployment, the remaining 25% after 2 months). Partial withdrawals are permitted earlier for specific purposes — home purchase/construction, medical treatment, wedding, education — each with its own minimum-service and amount conditions. TDS applies on withdrawals above ₹50,000 if taken before completing 5 years of continuous service.

How does UAN transfer work when changing jobs?

An employee's UAN (Universal Account Number) stays the same across employers for life — only the new employer needs to link it to their new PF account, and the old balance can be transferred in rather than withdrawn. We'd generally advise transferring rather than withdrawing on a job change, since withdrawal disrupts compounding and can trigger tax if done before 5 years of continuous service.

What documents does an employee need for EPF/UAN?

Aadhaar, PAN, and an Aadhaar-linked bank account are required for a UAN to be fully KYC-verified (needed for online claims/withdrawals) — plus nomination details (Form 2/equivalent) so the right person is paid in case of death. Our Joining Form and Nomination Form tools capture all of this at onboarding.

Employees' State Insurance (ESI)

Which establishments must register for ESI?

Factories and most classes of establishments (shops, hotels, cinemas, road transport, private educational/medical institutions) employing 10 or more people must register — some states set the threshold at 20 (e.g., Maharashtra, Chandigarh). Coverage applies to employees earning up to ₹21,000/month gross (₹25,000 for employees with disabilities).

What benefits does ESI actually cover?

Cash benefits for sickness, temporary/permanent disablement, dependents' benefit (on death due to employment injury), maternity (up to 26 weeks), funeral expenses, and unemployment allowance under certain schemes — plus free medical treatment for the employee and dependents at ESI hospitals/dispensaries.

What are the ESI contribution rates?

Employee contributes 0.75% of gross wages; employer contributes 3.25% — both on total gross wages, not a capped wage base like EPF. Our ESIC Calculator computes both shares for a given gross salary.

What is the current ESI wage coverage threshold?

The ESI coverage threshold remains Rs. 21,000 per month gross wages, continuing pending further rule revisions under the new Codes.

Gratuity

Who is eligible for gratuity and after how long?

Employees in an establishment with 10+ employees become eligible after 5 years of continuous service (waived entirely in case of death or disablement) — reduced to just 1 year for fixed-term employees under the Code on Social Security. It's payable on retirement, resignation, superannuation, death, or disablement.

How is gratuity calculated?

The standard formula is (Last drawn Basic+DA × 15 × completed years of service) ÷ 26, with service rounded up if it exceeds 6 months into the next year. Our Gratuity Calculator applies this exactly, including the statutory ₹20 lakh ceiling.

Is gratuity taxable?

Gratuity received under the Payment of Gratuity Act is exempt up to ₹20 lakh under Section 10(10) (₹25 lakh for government employees) — and that ₹20 lakh limit is a lifetime aggregate across all employers, not a per-employer allowance. Any amount an employer pays above the exempt limit is taxable as salary income. Employers must pay gratuity within 30 days of it becoming due.

Is gratuity available to fixed-term employees before 5 years of service?

Yes — under the Code on Social Security, fixed-term employees become eligible for gratuity after just 1 year of continuous contract service, unlike the standard 5-year requirement for permanent employees.

Who is liable for a contract labourer's gratuity — the contractor or the principal employer?

The contractor (the worker's direct employer) is liable for gratuity of contract labour, not the principal employer — and it still requires 5 years of continuous service, same as a regular employee. This is a common gap we check for in our contractor labour compliance audits.

Statutory Bonus

Who is entitled to statutory bonus?

Any establishment that has employed 20 or more people on any single day in an accounting year is covered under the Payment of Bonus Act, 1965 — and stays covered in later years even if headcount drops. An employee qualifies if Basic+DA is ≤ ₹21,000/month and they've worked at least 30 days in that accounting year.

How much statutory bonus must be paid?

Minimum 8.33% of eligible wages, maximum 20% — the actual percentage within that range depends on the employer's 'allocable surplus' for the year. The wage figure used is capped at ₹7,000/month or the applicable minimum wage, whichever is higher. Our Bonus Calculator works through this exactly.

By when must statutory bonus be paid?

Within 8 months of the close of the accounting year (e.g., by 30 November for a financial year ending 31 March) under Section 19 of the Payment of Bonus Act — with Form D filed within 30 days of payment. It's a mandatory statutory payment, not a discretionary festival bonus, and can't be substituted by one unless declared as such in writing.

Maternity Benefit

How much maternity leave is an employee entitled to?

26 weeks of paid leave for the first two children (up to 8 weeks can be taken before the expected delivery date, the rest after), and 12 weeks from the third child onwards. Adopting mothers (for a child under 3 months old) and commissioning mothers under surrogacy get 12 weeks.

Who is eligible for maternity benefit?

A woman who has actually worked at least 80 days in the 12 months immediately before her expected delivery date, in an establishment with 10 or more employees, is eligible for full paid maternity benefit. She's also protected from termination during maternity leave and must be reinstated to the same or an equivalent position afterward.

Leave — Earned, Casual & Sick

What's the difference between earned leave, casual leave and sick leave?

Earned Leave (EL) accrues with service (commonly 1 day per 20 days worked after a qualifying period under the OSH Code) and is the only type that can be both carried forward and encashed. Casual Leave (CL, typically 7-12 days/year) and Sick Leave (SL, typically 7-12 days/year) both lapse at year-end in most states and cannot be encashed — sick leave usually needs a medical certificate beyond 2-3 consecutive days.

Can unused leave be carried forward every year?

Only Earned Leave carries forward, generally up to 30 days under the OSH Code framework (some states allow more — Karnataka permits up to 45). Casual and Sick Leave typically lapse at the end of the leave year and don't carry forward at all.

How much leave can an employee carry forward to the next year?

Under the OSH Code, a worker may carry forward up to 30 days of earned leave to the following calendar year, with unlimited carry-forward for leave that was applied for but refused by the employer. One eligibility nuance per the Ministry's own FAQ: a person employed in a supervisory capacity drawing wages above Rs. 18,000/month is excluded from the Code's definition of 'worker' — and the leave-with-wages provisions are written to cover 'workers' specifically. This exclusion is scoped to supervisory roles, not every employee above that wage.

Is leave encashment taxable?

Leave encashment on retirement/resignation is tax-exempt up to ₹25 lakh (a lifetime aggregate across employers) under Section 10(10AA) for non-government employees — only Earned Leave/Privilege Leave can be encashed at all; Casual, Sick, Maternity and compensatory-off leave cannot be encashed under Indian labour law.

Can women employees work night shifts under the new labour codes?

Yes — women can now work night shifts (7 PM to 6 AM) provided they give explicit consent and the employer ensures a safe working environment, including secure transportation and adequate workplace facilities.

What is the eligibility to avail annual leave with wages?

A worker must have actually worked at least 180 days in a calendar year to become eligible for annual leave with wages under the OSH Code, accruing at roughly 1 day of leave for every 20 days worked once that threshold is crossed. This 180-day qualifying condition is separate from the Rs. 18,000 wage-based 'worker' definition question — see that FAQ if you're asking about who counts as a worker in the first place, not how much they've worked.

What does the Rs. 18,000 wage threshold in the labour codes actually mean?

Per the Ministry of Labour & Employment's own FAQ clarifications, a person employed in a supervisory capacity drawing wages above Rs. 18,000/month (or a higher amount the Central Government notifies later) is excluded from the OSH Code's definition of 'worker'. This matters because several statutory entitlements — including the leave-with-wages provisions — are written to apply specifically to 'workers'. It is NOT a general rule that anyone earning above Rs. 18,000 loses these entitlements — the exclusion is scoped specifically to supervisory-capacity roles, not employees generally.

Termination, Retrenchment & Full & Final Settlement

How much notice is required to retrench an employee?

One month's written notice (or pay in lieu) applies generally. On top of that, establishments with 50-299 workers must serve notice on the appropriate government before any lay-off, retrenchment or closure; establishments with 300+ workers need prior government permission, not just notice — a materially stricter threshold than the old 100-worker cutoff for the permission requirement.

How is retrenchment compensation calculated?

15 days' average pay for every completed year of continuous service, under Section 25F — our Retrenchment Compensation Calculator works through the exact figure for a given salary and tenure.

How quickly must full and final settlement be paid?

Within 2 working days of removal, dismissal, retrenchment or resignation, per the Code on Wages — a sharp tightening from the informal 30-45 day timelines many employers historically used. Our Full & Final Settlement tool is built to help hit this.

Can an employee challenge their termination?

Yes — an application challenging termination can be filed before the Labour Court, generally within 3 years from the date of the termination order. Retrenched workers also get preferential re-employment rights if the employer resumes hiring for the same category of work within a year, and (absent an agreement otherwise) the most recently hired employees in that category are the ones retrenched first.

What is lay-off compensation and who is eligible for it?

A worker with at least 1 year of continuous service who is laid off (as distinct from retrenched) is entitled to compensation equal to 50% of Basic+DA for every day of lay-off, excluding weekly holidays. If the lay-off runs beyond 45 days in a 12-month period, compensation for the period after those first 45 days only continues if there's a specific agreement between employer and worker providing for it.

What is the Worker Re-skilling Fund?

A new obligation under the Industrial Relations Code: when an employer retrenches a worker, they must transfer an amount equal to 15 days of that worker's last-drawn wages — within 10 days of the retrenchment — to a designated account maintained by the Labour Commissioner, along with the worker's bank details. That amount is then meant to reach the retrenched worker's own account (within 45 days) to support re-skilling, on top of (not instead of) the standard retrenchment compensation.

How are industrial disputes resolved now that Labour Courts have been abolished?

The Industrial Relations Code abolished separate Labour Courts and Courts of Inquiry, consolidating adjudication into a single two-member Industrial Tribunal system — one Judicial Member and one Administrative Member per bench — intended to speed up and streamline what used to be a multi-forum process. Both individual and collective industrial disputes now go through this reconstituted Tribunal structure.

Contract Labour

When does a principal employer need to register for contract labour?

Under the existing Contract Labour (Regulation & Abolition) Act, any establishment engaging 20 or more contract workers must register (Form V), and each contractor supplying that workforce must separately hold a licence (Form IV). The OSH Code eventually raises the principal-employer threshold to 50 and introduces a single pan-India contractor licence, but most states haven't yet notified OSH Code rules, so the existing CLRA framework still applies in practice.

Is the principal employer liable if a contractor doesn't pay wages properly?

Yes — the principal employer is directly responsible if a contractor defaults on wage payments or statutory dues (EPF/ESI), and must verify the contractor actually holds a valid licence and has a clean compliance track record before engaging them. This is exactly what our Contractor Labour Audit tool is built to check.

POSH — Prevention of Sexual Harassment

What is required to set up an Internal Complaints Committee?

Every establishment with 10 or more employees must constitute an ICC: a Presiding Officer (a senior woman employee), at least 2 employee members, and one member from an NGO/association familiar with sexual harassment issues — with at least half the total members being women. Not having one at all, if you cross the 10-employee threshold, is itself a violation.

What is the timeline for a POSH complaint?

A complaint must generally be filed within 3 months of the incident (extendable by another 3 months for sufficient reason), and the ICC must complete its inquiry within 90 days of the complaint being filed. Our POSH Complaint Case File tool tracks these statutory timelines through the whole process.

Industrial Relations — Strikes, Unions & Fixed-Term Employment

Does the Industrial Relations Code ban strikes?

No — the right to strike remains intact under the IR Code. What's required is a mandatory notice period (generally 14 days) before going on strike in certain establishments, not a ban. Trade union registration rights are also retained, with negotiating unions/councils getting stronger statutory backing for collective bargaining than before.

Are fixed-term employees entitled to the same benefits as permanent employees?

Yes — fixed-term employees are entitled to parity in wages, hours of work and statutory social security benefits with permanent employees doing similar work, plus pro-rata gratuity regardless of how long they've served (not the standard 5-year requirement). The point of the fixed-term category is a defined contract duration, not reduced entitlements.

What is a fixed-term employee under the new labour codes?

A fixed-term employee is hired for a defined contract period with written terms and a specified end date, rather than open-ended permanent employment — and is entitled to the same statutory benefits (including gratuity after 1 year, as above) as a permanent employee on a pro-rata basis.

Does a fixed-term employee get retrenchment compensation when their contract simply ends?

No — a fixed-term contract reaching its agreed end date and simply not being renewed is not treated as retrenchment, so no retrenchment compensation is owed for that non-renewal itself. Terminating the contract early, before its agreed end date, is a different situation and follows whatever notice/compensation terms are in the employment agreement, plus the Code's ordinary protections once the employee has completed any applicable qualifying period.

Appointment Letters & Documentation

Is an appointment letter legally mandatory now?

Yes — the OSH Code makes a formal appointment letter mandatory for every employee or worker, across all industries, closing a gap where it used to only be required in specific 'scheduled' employments. Our Appointment Letter and Bulk Onboarding tools cover this.

Professional Tax & Labour Welfare Fund

Does every state have Professional Tax and Labour Welfare Fund?

No — both vary significantly by state. Professional Tax is levied by around half of India's states (a few, like Punjab, levy a similarly-structured State Development Tax instead); Labour Welfare Fund is currently operative in around 16 states/UTs including Maharashtra, Karnataka, Gujarat, Tamil Nadu, Haryana, Punjab and Delhi, with contribution amounts as small fixed rupee figures rather than a percentage. See our Compliance Data page for current state-wise rates.

Equal Remuneration

What does the Equal Remuneration Act require?

Equal pay for men and women performing the same or similar work, and no discrimination based on sex in recruitment, transfers, training or promotion. 'Similar work' means comparable skill, effort and responsibility, not identical job titles.

Income Tax Act, 2025 & TDS on Salary

What is the Income-tax Act, 2025?

It's the Act that replaced the Income-tax Act, 1961 in its entirety, effective 1 April 2026 (Tax Year 2026-27 onward). It restructures the law into 536 sections across 23 chapters and 16 schedules (down from 800+ sections), and replaces the old 'Previous Year/Assessment Year' concept with a single 'Tax Year'. Tax rates and slabs themselves are largely unchanged — it's mainly a renumbering and simplification exercise. We use our TDS Calculator and Form 16 Generator tools to keep salary computations current with it.

What is Section 392 of the new Income-tax Act?

Section 392 of the Income-tax Act, 2025 is where salary TDS now lives — it corresponds to the erstwhile Section 192 (and 192A) of the 1961 Act. The underlying computation (slabs, standard deduction, rebate) is unchanged; only the section reference has moved.

By when must Form 16 be issued to employees?

Form 16 is typically due by 15 June following the end of the financial year (e.g., for FY 2025-26, by 15 June 2026) — check the current CBDT circular each year since exact dates can shift slightly. Our Form 16 Generator produces Part B (the computation statement) and Form 12BA; Part A (the TDS deposit certificate) still has to come from the TRACES portal.

What's the difference between Form 16 and Form 12BA?

Form 16 is the annual TDS certificate every employer issues to salaried employees. Form 12BA is an annexure to it, required only when an employee also receives taxable perquisites (rent-free accommodation, a company car, a low-interest loan, etc.) — it itemises the nature and value of those perquisites.

What is Form 12BB used for?

Form 12BB is how an employee declares their tax-saving investments and expenses (HRA/rent paid, home loan interest, Section 80C/80D investments, etc.) to their employer, so the employer can compute monthly TDS correctly across the year instead of a lump adjustment at year-end. If an employee has opted for the New Tax Regime, most of this doesn't apply — the employer mainly just needs their regime choice.

Is HRA exemption available under the new tax regime?

No — HRA exemption (along with LTA and most other salary allowance exemptions) is only available under the Old Tax Regime. The New Regime instead gives a flat, higher standard deduction (₹75,000 vs ₹50,000 old) in exchange for giving up most itemised exemptions and deductions.

Is income up to 12 lakh really tax-free under the new tax regime?

Effectively yes, for Tax Year 2026-27 — taxable income up to ₹12,00,000 under the New Regime gets a rebate that brings tax down to zero. Just above that threshold, marginal relief kicks in so tax owed never exceeds the amount by which income crosses ₹12L — there's no sudden cliff. Our TDS Calculator shows this exactly for a given salary.

Gig Workers & Social Security

Are gig and platform workers covered under social security now?

Yes — the Code on Social Security explicitly recognises gig and platform workers for the first time, opening access to targeted welfare schemes. The Central Government will notify the actual contribution rates; individual states cannot independently levy their own related fees.

How much must aggregators like Uber, Swiggy or Zomato contribute for gig worker welfare?

1-2% of the aggregator's annual turnover, capped at 5% of the amount actually paid/payable to gig and platform workers, into a dedicated Social Security Fund under the Code on Social Security. The fund is meant to finance life/disability cover, accident insurance, and health and maternity benefits for gig workers — who previously bore all of this risk themselves with zero employer-side obligation.

What is the e-Shram portal and who should register on it?

e-Shram is the government's National Database of Unorganised Workers — free registration (Aadhaar-linked) for workers who are not income-tax payees and not already covered by EPFO or ESIC, giving them a lifetime Universal Account Number usable anywhere in India for social security schemes. Registered workers get accident cover (Rs. 2 lakh on death/permanent disability, Rs. 1 lakh for partial disability) and access to schemes like the PM-SYM pension. If you employ unorganised/informal/gig workers not otherwise covered by EPF/ESI, pointing them to e-Shram registration is worth doing proactively.

Wage Payment, Registers & Payroll Compliance

By when must a wage slip be issued to employees?

On or before the date wages are actually paid, per the Compliance Handbook for Employers under the Four Labour Codes — not after. Our Wage Slip register tool generates these in the standard format.

How long must statutory registers be retained?

5 years, per the Ministry's Compliance Handbook — covering attendance, wages, overtime and deductions registers. Keep this in mind when deciding how long to retain exported Excel/PDF copies from any register in this portal.

Is there a cap on how much can be deducted from an employee's wages?

Yes — total deductions (fines, absence, damage/loss recovery, advances, etc.) are capped at 50% of an employee's wages for that wage period under the Code on Wages. Deductions beyond that cap have to be carried over, not taken in one go.

Must minimum wage and working hours be displayed at the workplace?

Yes — employers must display the applicable minimum wage rates and working hours in English, Hindi, and the local language of the establishment's area, per the Ministry's Compliance Handbook.

Workplace Committees & Standing Orders

When is a Works Committee mandatory?

Establishments with 100 or more workers must constitute a Works Committee with equal employer and worker representation, under the Industrial Relations Code.

When is a Grievance Redressal Committee mandatory?

Establishments with 20 or more employees must establish a Grievance Redressal Committee under the Industrial Relations Code — our Committee Meeting & Minutes tool covers Grievance Redressal, Works and Safety Committees together.

When are Standing Orders mandatory for an establishment?

Industrial establishments with 300 or more workers (based on average workforce strength over the preceding 12 months) must certify Standing Orders within 6 months, adopting the Model Standing Orders, 2026 (notified 8 May 2026 under Section 29 of the IR Code) for the Mining, Manufacturing or Service sector as applicable. Establishments below 300 workers can voluntarily adopt the Model Standing Orders without needing certification. Our Standing Orders tool generates the exact gazetted text for whichever sector applies.

When is a Safety Committee mandatory?

The OSH Code requires certain establishments to constitute a Safety Committee with both employer and worker representatives — exact thresholds are notified by the appropriate government per industry/hazard class. Our Committee Meeting & Minutes tool covers Safety Committee minutes alongside Works and Grievance Redressal Committees.

Must a strike or lockout notice be reported to authorities?

Yes — per the Compliance Handbook, strike/lockout notices must be reported to the relevant authorities within 5 days.

Workplace Safety, Registration & Welfare Facilities (OSH Code)

Do establishments need to register under the OSH Code?

Yes — establishments employing 10 or more workers must register electronically within 60 days of becoming applicable, under the OSH & Working Conditions Code.

Are annual health check-ups mandatory for employees?

Yes — the OSH Code requires employers to provide annual free health check-ups for employees, alongside the mandatory appointment letter requirement.

Are there special requirements for inter-state migrant workers?

Yes — establishments employing 10 or more inter-state migrant workers must provide specific facilities for them under the OSH Code. Our Contract Labour / Inter-State Migrant Worker Register tracks this.

Is a crèche facility mandatory for employers?

Yes — establishments with 50 or more employees (counting all employees, not just women, since the threshold is gender-neutral) must provide a crèche facility, now under the Code on Social Security, 2020. It must be within the workplace or within 500 metres/the employees' neighbourhood, with the mother allowed 4 visits a day including rest intervals. The Ministry's 2026 FAQs confirm the crèche doesn't need to be on the employer's own premises — a shared facility (government, private, NGO-run, or pooled with other employers) is acceptable.

What size establishment needs a factory licence under the OSH Code?

20 or more workers with the aid of power, or 40 or more workers without power — both raised from the earlier 10/20 thresholds. Importantly, this higher threshold is only for the factory LICENCE itself — the OSH Code's actual health, safety and welfare protections (canteen, first aid, crèche, etc.) apply uniformly to any establishment with 10 or more employees regardless of the licensing threshold.

What welfare facilities must every establishment provide regardless of size?

Chapter VI of the OSH Code sets a uniform floor for welfare provisions — canteen, first aid boxes, and crèche (at the applicable threshold), all to standards the Central Government notifies — plus a welfare officer at larger establishments. These apply at the 10-employee threshold, independent of the higher factory-licensing thresholds.

What safeguards are mandatory for women working night shifts?

Beyond written, freely-given consent, employers must provide safe transport to and from the workplace, secure workplace infrastructure (adequate lighting, CCTV, women supervisors where feasible), medical aid and reasonable rest intervals, and a functional POSH Internal Complaints Committee — plus whatever additional conditions the relevant state government notifies, since states can add further safeguards on top of the central requirement.

What allowances must be paid to inter-state migrant workers?

A displacement allowance equal to 50% of monthly wages (or Rs. 75, whichever is higher), paid as a one-time payment at the time of recruitment/displacement, plus a journey allowance covering to-and-fro travel between the worker's home state and the place of employment at least once every 12 months. These apply wherever an establishment employs 10 or more inter-state migrant workers.

Child & Adolescent Labour

What is the minimum age for employment in India?

14 years, under the Child and Adolescent Labour (Prohibition and Regulation) Act, 1986 — employing a child below 14 (outside limited family-enterprise/entertainment exceptions) is a cognizable offence carrying up to 2 years' imprisonment. Adolescents (14-18) can work, but not in hazardous occupations/processes — violating that carries 6 months to 2 years' imprisonment and a fine of Rs. 20,000-50,000. Our Young Worker Register specifically tracks age proof, guardian consent and hazardous-process exclusion for any adolescent workers you do employ.

Employees' Compensation & Weekly Holidays

How is compensation calculated for a workplace death or disablement?

For death: 50% of monthly wages × the age-based 'relevant factor' from Schedule IV, or Rs. 12 lakh, whichever is higher. For permanent total disablement: 60% of monthly wages × the relevant factor, or Rs. 14 lakh, whichever is higher. For permanent partial disablement: the same 60% formula, scaled down by the percentage loss of earning capacity for that specific injury under Schedule I. The 'relevant factor' is higher for younger workers, since it's meant to reflect their longer remaining working life. Our Employees' Compensation Calculator applies the exact Schedule IV multiplier for a given age and wage.

Is a weekly holiday mandatory, and how does compensatory off work?

Yes — Section 52 of the Factories Act mandates one weekly holiday (usually Sunday, though a substitute day can be notified). If a worker is made to work through their weekly holiday, Section 53 requires a compensatory holiday within that same month or the following two months — state Shops & Establishments Acts typically allow a wider 30-90 day window. Compensatory off is separate from, not a substitute for, statutory overtime pay — working beyond 9 hours/day or 48 hours/week still requires double-rate overtime pay regardless of whether comp-off is also given.

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