Last Updated on November 7, 2026 by Abhijit Divekar
What changed on 21 November 2025?
The Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 all took effect from 21 November 2025. Together they replaced 29 central labour laws, including the Payment of Wages Act, the Payment of Gratuity Act, the EPF Act and the ESI Act.
The codes did not switch everything over on day one. Rules and schemes followed through the year, and the states have been notifying their own rules at different speeds. That is why many small employers are still unsure what applies to them.
Why 20 November 2026 matters
When the Code on Social Security repealed the old PF and ESI laws, it did not scrap their schemes overnight. Section 164(2)(b) of the Code kept the EPF Scheme 1952, the EDLI Scheme 1976, the Employees’ Pension Scheme 1995 and the rules, regulations and schemes made under the ESI Act in force, where they do not conflict with the Code, for one year from the date the Code came into force. That year ends on 20 November 2026.
- PF side: new EPF, pension and EDLI schemes under the Code were notified on 29 June 2026, so the PF changeover has largely happened already.
- ESI side: the Social Security (Central) Rules, 2026 were published on 8 May 2026, and ESIC is already paying benefits under them. We could not find separate ESI regulations or schemes made under the Code when we checked on 6 November 2026.
What to do: keep paying PF and ESI exactly as you do today, and watch for any notification from the Labour Ministry or ESIC around 20 November. We will update this page if one is issued.
New ESI benefit amounts, backdated to 8 May 2026
ESIC confirmed in a circular dated 3 November 2026 that these amounts apply under the Social Security (Central) Rules, 2026:
| Benefit | Amount | Rule |
|---|---|---|
| Confinement expenses (childbirth) | ₹15,000 per case | Rule 22(4) |
| Funeral expenses | ₹20,000 per case | Rule 21 |
| Contribution for availing medical benefit (where a person pays it directly) | ₹50 a month (₹600 a year) | Rules 25(10) and 25(11) |
These apply to cases on or after 8 May 2026. If an employee or their family made one of these claims after that date, it is worth telling them to check the amount. The circular does not change what employers and employees pay as ESI contributions each month.
The one-year checklist for small employers
1. Wages are at least 50% of pay
Under the Code on Wages, allowances such as HRA and conveyance are left out of “wages”, but if those exclusions add up to more than half of total pay, the excess is added back. Wages feed PF, gratuity and bonus calculations, so a low basic now costs more than it saves. Check that basic pay plus dearness allowance is at least half of each employee’s pay, or that payroll adds the excess back.
2. Every employee has an appointment letter
The OSH Code requires a letter of appointment for every employee. People already on the payroll when the code started were due theirs within three months, so this should have been done by February 2026. If anyone is still missing one, issue it now.
3. Final pay within two working days
When an employee resigns, is removed or dismissed, or is retrenched, the Code on Wages requires their wages to be paid within two working days. Many small firms still settle at the next payroll run, which is too late.
4. PF on the new ₹25,000 wage ceiling
From 17 September 2026, PF is compulsory on wages up to ₹25,000 a month (it was ₹15,000). Employees earning between the two figures are now covered, and contributions for them are 12% each. Our PF wage ceiling guide has worked examples, and the PF calculator does the sums.
5. Gratuity for fixed-term staff after one year
Permanent staff still need five years of continuous service for gratuity. Fixed-term employees now get it pro rata, and the Labour Ministry has said they become eligible after one year instead of five. Gratuity is 15 days’ wages for each year of service, worked out on a 26-day month. Try our gratuity calculator.
6. Your state’s own rules
Working hours, overtime limits, leave, registers and some returns depend on state rules made under the codes, and these differ a lot. For example, in Haryana the Labour Commissioner directed on 5 October 2026 that the minimum wage notification of 9 April 2026 must be applied to all establishments, including small (petty) shops, while a High Court case on the issue is pending. Check the state where each employee works:
- Maharashtra, Karnataka, Tamil Nadu, Telangana, Gujarat
- Delhi, Haryana, Uttar Pradesh, West Bengal, Madhya Pradesh
7. Monthly pay on time
For monthly-paid staff, wages must be paid before the end of the seventh day of the following month. If payroll slips past the 7th, that is now a breach in every state.
8. Watch for notifications around 20 November
Set a reminder for the week of 16 November to check the Labour Ministry, EPFO and ESIC websites.
Frequently asked questions
When did the new labour codes come into force?
All four codes came into force on 21 November 2025, replacing 29 central labour laws.
Do the old PF and ESI rules stop on 20 November 2026?
Section 164 of the Code on Social Security kept the old PF schemes and the ESI rules, regulations and schemes in force for one year, to 20 November 2026. New PF schemes were notified in June 2026. For ESI, keep paying as you do now and watch for an ESIC or Labour Ministry notification around that date.
Have ESI contribution rates changed?
Not as of 6 November 2026. ESIC’s circular of 3 November 2026 raised confinement expenses to ₹15,000 and funeral expenses to ₹20,000 per case, for cases from 8 May 2026, but it did not change monthly contributions.
Is an appointment letter now compulsory?
Yes. The OSH Code requires a letter of appointment for every employee, including staff who joined before the code started.
How quickly must I pay an employee who resigns?
Within two working days of the resignation, removal, dismissal or retrenchment, under the Code on Wages.
HRTailor runs payroll and statutory compliance for companies with 5 to 100 employees: wage structures under the 50% rule, PF and ESI on the new rules, and every state filing.
Sources: PIB release of 21 November 2025 on the implementation of the four labour codes; Code on Social Security, 2020, sections 53 and 164; EPF wage ceiling notification S.O. 5109(E) dated 17 September 2026; Code on Wages, 2019, sections 2(y) and 17; OSH Code, 2020, section 6(1)(f); ESIC circular No. N-12015/2/2026-Benefit-II dated 3 November 2026; ESIC notification of 7 October 2026 (Gazette of India, 16 October 2026); Haryana Labour Commissioner letter No. 25744-860 dated 5 October 2026. A guide for employers, not legal advice. Last checked 7 November 2026.
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