Last Updated on November 12, 2026 by Abhijit Divekar
Introduction
For years, many small businesses in India hired people with a phone call and a WhatsApp message. The new Labour Codes end that. Under the Occupational Safety, Health and Working Conditions Code, 2020 (the OSH Code), which came into force on 21 November 2025, an employer must give every employee an appointment letter.
It sounds like paperwork, but the appointment letter is now the first document an inspector, a labour court or an unhappy former employee will ask for. This guide explains who must issue one, what to put in it, and how to fix things if your team joined without one.
Quick answer
If your business is covered by the OSH Code, every employee must receive an appointment letter when they join. Staff who were already working when the Code started on 21 November 2025 were to receive one within three months. The letter should state the job, the wages and how they are made up, working hours, leave and the type of employment.
Who must issue appointment letters?
The OSH Code applies to establishments, and for most businesses an establishment means a place where 10 or more workers are employed. If you run a shop, office, factory, clinic, agency or startup with 10 or more people, treat appointment letters as compulsory.
Below 10 people, the Code may not apply to you directly, but the letter is still worth issuing. It is your best record of what was agreed, and the PF, ESIC and gratuity rules that apply as you grow all depend on the wages written in it.
The duty applies to every employee, not only senior staff. That includes:
- full time and part time employees
- employees on probation
- fixed term employees hired for a set period or project
- people moved from one role or location to another, where the terms change
Contract workers supplied by a staffing agency should get their letter from the agency, which is their employer. As the business where they work, ask the agency for proof that letters were issued. For the wider picture, see our Labour Codes one year on checklist.
What about employees who joined before the Codes?
Employees who were already on your rolls when the OSH Code came into force were to receive an appointment letter within three months of that date. If you missed that window, do not wait for an inspection. Issue letters to all existing staff now, using their current role and pay, and keep a copy signed or accepted by each person.
When you do this, check that the wages in the letter match your payroll exactly. A mismatch between the letter and the payslip is one of the easiest gaps for an inspector to spot.
What should an appointment letter include?
Your state’s rules under the OSH Code may set out a format. Whatever the format, a sound appointment letter covers these points:
| Section | What to write |
|---|---|
| Employee details | Full name, date of joining, employee ID |
| Role | Designation, department, skill category (unskilled, semi skilled, skilled or highly skilled) and work location |
| Type of employment | Permanent, probation, part time or fixed term, with the end date if fixed term |
| Wages | Monthly pay with the breakup: basic, dearness allowance, other allowances. Show that basic plus DA is at least half of total pay |
| Payment | Wage period, pay date and mode of payment (bank transfer) |
| Working hours | Daily and weekly hours, weekly off and how overtime is paid |
| Leave and holidays | Earned leave, sick or casual leave and the holiday list, or a link to your leave policy |
| Social security | Whether PF and ESIC apply, and gratuity eligibility |
| Notice and exit | Probation period, notice period on both sides and how final dues are settled |
| Policies | Code of conduct, POSH policy and data privacy, by reference |
Why the wage breakup matters most
Under the Labour Codes, PF, ESIC, gratuity and leave encashment are worked out on “wages”: basic pay, dearness allowance and retaining allowance. If allowances are more than half of total pay, the extra is added back to wages. A letter that shows a tiny basic and large allowances invites a dispute over every one of these payments. Set the structure right in the letter and the rest of payroll follows. Our HR policies for a 10 person startup guide shows how the letter fits with your other documents.
Fixed term employees need extra care
The Labour Codes allow fixed term employment in all sectors. A fixed term employee must get the same hours, wages and benefits as a permanent employee doing the same work, and becomes eligible for gratuity in proportion to service after one year, rather than five.
So the appointment letter for a fixed term hire should state the start and end dates, the project or reason if relevant, and confirm that pay and benefits match permanent staff in the same role. If you renew the term, issue a fresh letter or a renewal letter.
Common mistakes we see
- Offer letter only: an offer letter sent before joining is not the same as an appointment letter issued on joining. Issue both, or make sure one document covers everything.
- Old templates: letters written before November 2025 that still use the old wage structure or say nothing about the type of employment.
- Pay that does not match payroll: the letter says one number and the payslip shows another.
- No proof of receipt: letters emailed but never signed or acknowledged.
- Changes not recorded: promotions, transfers and pay revisions made by message, with no updated letter.
These gaps tend to surface at exit, when a former employee disputes their dues. Our guide to full and final settlement under the Labour Codes explains why the appointment letter is your first line of defence.
A simple plan to get compliant this month
- List everyone: every person on payroll, their joining date and whether they have a letter.
- Update your template: use the checklist above and match the wage breakup to the Codes.
- Issue letters to existing staff: start with anyone who has none, then replace outdated ones.
- Collect acknowledgement: a signature or a recorded acceptance from each employee.
- Make it routine: no new joiner starts work without a letter on day one.
If you would rather not build templates from scratch, our HR policy pack includes an appointment letter aligned to the Labour Codes, along with the policies it refers to.
Frequently asked questions
Is an appointment letter mandatory under the new Labour Codes?
Yes, for establishments covered by the OSH Code, which for most businesses means 10 or more workers. Every employee must receive an appointment letter on joining.
Do existing employees also need an appointment letter?
Yes. Employees already working when the OSH Code came into force on 21 November 2025 were to receive a letter within three months. If yours did not, issue letters now.
Is an offer letter enough?
Not on its own. An offer letter is sent before joining and can change. The appointment letter records the final terms on joining, including wages, hours and the type of employment.
Can the appointment letter be sent by email?
Yes, as long as the employee receives it and you keep proof, such as a signed copy or a recorded acceptance. Check whether your state’s rules prescribe a particular format.
What should a fixed term appointment letter say?
The start and end dates, the role, and that wages and benefits match permanent staff doing the same work. Fixed term employees become eligible for gratuity after one year of service.
Get your HR documents right the first time
HRTailor helps small businesses set up appointment letters, HR policies and payroll that match the Labour Codes, so every document says the same thing. See our HR policies service.
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