Employee Benefits Compliance Checklist for Labour Code 2025: How Will it Transform HR & Compliance in India

India's labour landscape transformed on November 21, 2025, with the nationwide implementation of the Four Labour Codes, consolidating 29 outdated laws into a modern framework.  This employee benefits compliance update mandates universal social security, timely wages, and expanded protections for all workers—including gig, contract, and unorganized sectors. 

The Government of India has made effective all the following 4 Labour Codes starting 21 November 2025: 

• The Code on Wages, 2019 
• The Code on Social Security, 2020 
• The Occupational Safety, Health and Working Conditions Code, 2020 
• Industrial Relations Code, 2020 

Businesses must act now to avoid penalties, with states notifying rules within 45 days. This guide delivers a comprehensive employee benefits compliance checklist drawn from the official PIB Press Release—your essential employee benefits compliance checklist tailored for small and large employers to navigate these changes seamlessly. 

Forward-thinking Indian companies like Flipkart are already aligning compliance with holistic wellness—using built-in-India platforms like Xoxoday that stay ahead with tech-first solutions for rewards, incentives, loyalty, and engagement across customers, employees, and partners. 

Why employee benefits compliance matters now 

The Codes emphasize worker welfare and employee benefits while simplifying processes through single registrations and digital compliance. Key shifts include mandatory appointment letters, pan-India ESIC, and gratuity from Day 1 for fixed-term employees.  

These reforms arrive at a time when India’s workforce is more mobile, diverse, and digitally connected than ever. Strong benefits are no longer just a compliance requirement—they are a core driver of retention, productivity, trust, and employer reputation. On the other hand, non-compliance now carries higher penalties, increased scrutiny, employee disputes, reputational risks, and potential operational disruption. 

Whether you're a startup or enterprise, this employee benefits compliance checklist ensures alignment with the Code on Wages 2019 and Code on Social Security 2020.​​ 

Employee benefits compliance checklist for 2025: What every employer must implement 

The new Labour Codes make employee benefits mandatory across wages, social security, health, and workplace conditions. 
Use this comprehensive checklist to ensure immediate compliance for all establishments: 

Core benefits applicable to all workers 

Issue mandatory appointment letters 

• Provide written appointment letters to every worker 
  (permanent, fixed-term, contract, gig, platform, migrant). 
• Must clearly specify designation, wages, social security entitlements. 
• Ensures transparency and verifiable employment history. 

Guarantee minimum wages & national floor wages

• Pay at least the statutory minimum wage to all workers. 
• Must align with the national floor wage notified by the Central Government. 
• Applies across sectors—central to financial security. 

Ensure timely & complete wage payments 

• Wages must be paid on time (e.g., by the 7th for IT/ITES). 
• Includes wages during eligible leave periods. 
• No unauthorized deductions or wage ceiling restrictions. 

Pay overtime at double rate (with consent) 

• Work beyond prescribed hours (8–12/day, 48/week) requires worker consent. 
• Overtime must be paid at 2× normal wage. 
• Applies to sectors including beedi/cigar, textiles, mines, export, etc. 

Social security & ESIC obligations 

Extend social security coverage to all eligible workers 

• Provide PF, ESIC, insurance, gratuity, etc. 
• Covers: gig/platform workers, contract staff, MSME workers, dock workers, plantation workers, export workers. 

Comply with gig & platform worker contributions 

• Aggregators must contribute 1–2% of annual turnover 
  (capped at 5% of amounts paid/payable to gig/platform workers). 

Implement Aadhaar-linked UAN 

• Ensure PF/ESIC/social security accounts are Aadhaar-linked. 
• Enables portability across states—critical for migrant, gig, and youth workers. 

Expand ESIC coverage as required 

• ESIC is now pan-India. 
• Mandatory for establishments with even 1 employee in hazardous processes. 
• Also applies to plantations, hazardous industries, etc. 

Gratuity, Fixed-Term, Contract & MSME Workers 

Update gratuity eligibility rules 

• Fixed-term employees are now eligible after 1 year (not 5). 
• Adjust HR policies and actuarial assessments accordingly. 

Equalize benefits for fixed-term employees 

• Ensure FTEs receive equal benefits as permanent workers. 
• Includes leave, medical benefits, social security, equal wages for equal work. 

Protect contract workers (Principal employer responsibility) 

• Provide health benefits, social security, annual health check-ups (where mandated). 
• Critical in hazardous industries, MSMEs, plantations, mines, docks, export sectors. 

Meet MSME-specific benefit standards 

• Ensure: 
• Minimum wages 
• Canteen & drinking water 
• Rest areas 
• Standard hours & double OT 
• Paid leave 
• Timely wages 
• Compliance tied to employee count thresholds. 

Health, safety & preventive care benefits 

Provide free annual health check-ups 

• Mandatory for workers over 40. 
• Also required for mine, hazardous industry, dock, and export workers. 

Implement occupational safety & health (OSH) standards 

• Follow Central Government OSH rules. 
• Must include safety training and PPE. 

Constitute safety committees where required 

• Mandatory in hazardous units and establishments with 500+ workers. 
• Must ensure continuous monitoring and emergency readiness. 

Women, youth, migrant & vulnerable workers 

Enable women’s participation with consent 

• Women can work in all roles—including night shifts and hazardous work—only with consent. 
• Provide: secure transport, CCTV, security staff, written consent (especially in export sectors). 

Guarantee gender-neutral & inclusive benefits 

• Enforce equal pay for equal work. 
• Prohibit discrimination, including against transgender persons. 
• Expand dependent coverage to include parents-in-law for female employees. 

Formalize youth workers’ employment 

• Provide appointment letters, minimum wages, paid leave wages. 
• Wages must meet floor wage standards. 

Support migrant & textile workers 

• Ensure equal wages, full welfare benefits, portable PDS entitlements. 
• Allow wage-related claims for up to 3 years for pending dues. 

Sector-Specific Benefit Requirements 

Beedi & Cigar workers 

• Enforce minimum wages. 
• Working hours: 8–12/day, 48/week. 
• Double OT, timely wages, bonuses after 30 days of work/year. 

Plantation workers 

• Applies to plantations with >10 workers or ≥5 hectares. 
• Must provide: safety training, PPE, ESIC medical care for workers & families, education for workers’ children. 

Audio visual & digital media workers 

• Provide appointment letters with designation, wages, social security. 
• Timely payment, double OT for work beyond prescribed hours. 
• Applies to journalists, dubbing artists, stunt persons, etc. 

IT & ITES workers 

• Salary must be released by the 7th monthly. 
• Equal pay enforcement. 
• Night shift protections for women. 
• Guaranteed social security via FTE & appointment letters. 
• Fast dispute resolution for harassment and wage claims. 

Dock & export sector workers 

Dock Workers: 

• Appointment letters, PF, pension, insurance. 
• Annual health check-ups, medical & sanitation facilities. 

Export Workers: 

• Gratuity, PF, social security. 
• Annual leave after 180 days. 
• Timely wages. 
• Strong safety measures for women in night shifts, including double OT, safe transport, CCTV. 

Employer checklist for India’s new gratuity rules 2025 

Use this checklist to ensure your organization is fully prepared for the upcoming statutory changes. 

The effective implementation date for new gratuity rules is November 21, 2025. Employers must align policies, payroll systems, and actuarial calculations well before rollout. 

1. Apply the 50% wage rule for gratuity calculations 

Ensure that at least 50% of an employee’s CTC is treated as “wages” for the purpose of gratuity calculation. 
This will increase the gratuity payout base for most employees. 

2. Extend gratuity eligibility to fixed-term employees 

Fixed-term employees will now qualify for gratuity after 1 year of continuous service (reduced from 5 years). 
Update employment contracts, HR policies, and onboarding documentation accordingly. 

3. Immediately recognize liability as past service cost 

Under Ind AS 19 / AS 15, the increased liability must be recognized immediately in the Profit & Loss statement as past service cost. 
Coordinate with finance, auditors, and actuaries. 

4. Prepare for a 25–50% increase in gratuity liabilities 

Most Indian employers should expect a substantial spike in gratuity obligations due to the expanded wage definition and FTE eligibility. 
Budgeting, provisioning, and funding plans must be re-evaluated. 

5. Monitor state-level implementation rules 

Although the rules apply nationwide, individual states are currently finalizing specific implementation guidelines. 
Track notifications for state-wise compliance requirements. 

Key implications for employers 

• Review job descriptions and workforce classifications to align with new definitions of ‘employee’ and ‘worker’. 
• Reassess hiring models and employment contracts, including fixed-term arrangements and restrictions on contract labour for core activities. 
• Analyze the impact on compensation structures and payroll systems to comply with the uniform definition of wages and benefit calculations. 
• Assess the financial impact of enhanced employee benefits on the organization. 
• Update HR and employee relations policies, including working hours, leave entitlement, and retrenchment processes. 
• Implement strong internal controls, conduct periodic diagnostic reviews, and ensure effective governance. 

Actionable steps for employee benefits compliance 

Turn Labour Code mandates into operational reality with these prioritized steps for all employees—from white-collar executives to blue-collar frontline workers: 

1. Audit Payroll & Contracts: Review for national floor wages, double OT rates, and gratuity (FTE after 1 year, 50% CTC rule). Update definitions to cover gig/contract workers.​ 
2. Digitize Appointment Letters: Issue mandatory letters to every hire (permanent, fixed-term, gig) stating wages/social security. Use HR platforms for automated templates and e-signatures.​ 
3. Register for ESIC/PF & Enable Portability: Confirm thresholds (voluntary <10 for small employers; mandatory hazardous units). Activate Aadhaar-linked UAN for seamless benefits across states/jobs.​ 
4. Train HR & Managers Across Levels: Cover safety protocols, women protections (night shifts/CCTV), and Industrial Tribunals. Include blue-collar supervisors on health check-ups and wage compliance.​ 
5. Track State Rules & Wellness Integration: Monitor phased rollout (full by early 2026). Xoxoday Empuls streamlines this with its Benefits Marketplace—delivering annual health check-ups, early wage access, gym memberships, mental health support, and tax-saving cards directly aligned with Code mandates for executives, factory teams, and gig workers alike.​ 

These steps ensure comprehensive employee benefits compliance while building engagement.  

Turning the new labour codes into everyday wellbeing for employees 

As organizations transition to the Labour Code 2025, the role of HR moves from “keeping the company compliant” to actively designing systems that protect financial security, health, and dignity for every worker. The employee benefits compliance checklist outlined in this blog gives HR teams a clear view of what is mandatory but turning that checklist into day to day reality requires robust processes and the right technology.​​ 

A practical first step is to map each item in the checklist to concrete workflows: digitized appointment letters for all hires, payroll rules that enforce floor wages and double overtime, automatic tracking of ESIC and PF eligibility by establishment size, and scheduled health checkups and safety trainings for high risk roles.  

HRs can then layer wellbeing on top of barem inimum compliance by using the same structures to deliver preventive care, mental health support, financial planning tools, and inclusive benefits for dependents, migrant workers, and women in night shifts—so that no persona covered in the Codes is left out.​​ 

This is where a future-ready, tech-first platform becomes critical. Built in India for Indian companies, Xoxoday gives HR leaders and Comp & Benefits managers an integrated system to act on the checklist rather than just read it.​  

HR teams can use Xoxoday and its Benefits Marketplace to: 

• Run everything from a single platform: Manage rewards, incentives, loyalty, and engagement programmes across employees, channel partners, and gig ecosystems without adding manual overhead.​ 
• Operationalize financial wellness: Configure early wage access and tax-saving multi-benefit cards that cover meals, fuel, telecom, and books, supporting floor wage and timely payment requirements while improving take home value.​ 
• Deliver health and preventive care at scale: Automate annual health checkups, teleconsultations, OPD coverage, and dental/vision benefits in line with the Codes’ preventive healthcare and ESIC focus.​​ 
• Support physical and mental wellbeing: Offer gym and fitness memberships, step challenges, sports/hobby groups, counselling, stress management programmes, and 24/7 support, especially for high stress and frontline roles.​ 
• Add lifestyle and savings layers: Provide learning, childcare, and professional development through flexible spending accounts, plus access to discounts across 6,000+ brands in 30+ categories, helping workers stretch their incomes in a way that complements statutory benefits. 

Conclusion 

The new Labour Code 2025 marks a pivotal shift in how Indian organizations must approach employee benefits—moving from fragmented, reactive practices to a unified, welfare-driven framework that protects every worker’s financial security, health, and dignity. Compliance is no longer optional or administrative; it is foundational to retaining talent, reducing disputes, and building a future-ready workplace.