From PF/ESI basics to POSH, DPDP, and the still-pending Labour Codes!

General Discussions
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India’s employment law stack is a mix of central acts, state-level rules, and sectoral regulations. On top of that, Parliament has already codified 29 central labour laws into four Labour Codes (Wages; Social Security; Industrial Relations; Occupational Safety, Health & Working Conditions), but full nationwide enforcement is still pending as of August 28, 2025. Several states have drafted rules; the Centre has not notified a common go-live date, so your current obligations remain under the existing acts and state rules. Ministry of Labour & Employment+1GLIThe Times of India

What this means for HR: keep complying with present laws (PF, ESI, Maternity Benefit, POSH, Shops & Establishments, etc.) while prepping policies and payroll structures for the Codes’ eventual roll-out (e.g., the uniform “wages” definition). The Economic Times

1) The non-negotiables you must already be doing

A) Provident Fund (EPF)

  • Coverage: Typically establishments with 20+ employees; many smaller firms opt in voluntarily.

  • Contributions: Most employees at 12% of “PF wages”; employers match. (Certain categories may differ.)

  • Payment timeline: Contributions and ECR filing by the 15th of the following month. YouTube

  • Late remittance costs:

    • Interest @ 12% p.a. under Section 7Q.

    • Damages (penalty) recently rationalized to 1% per month (no cap), replacing the earlier 5–25% slabs. Effective June 14, 2024. Digital SansadAcuity Law

Engagement tip for your blog page: add a live “PF deadline ticker” that always shows the next 15th and warns teams 3 days prior.

B) Employees’ State Insurance (ESI)

  • Coverage wage ceiling: ₹21,000/month (₹25,000 for persons with disability); in effect since Jan 1, 2017.

  • Contribution due date: 15th of the following month (same as PF). ESIC+1cpf1.mahadiscom.in

C) Maternity Benefit (Amendment) Act, 2017

  • Paid leave: 26 weeks for the first two children; 12 weeks thereafter.

  • Crèche: Mandatory for 50+ employees; effective July 1, 2017 (rest effective April 1, 2017).

  • Work-from-home is an enabling provision after the leave window, depending on role. Ministry of Labour & Employmenticm.simpliance.in

D) Payment of Gratuity

  • Eligibility: 5 years’ continuous service (usual rule; check specific scenarios).

  • Ceiling: Government notified an increase to ₹20 lakh (2018). Ensure policies reflect this. ESIC

E) POSH (Prevention of Sexual Harassment) Act, 2013

  • Applies to every workplace.

  • Internal Committee (IC): Mandatory where you have 10 or more employees at an office/branch; follow composition and inquiry procedures set out in the Act/Rules.

  • Annual reporting: Include POSH case stats in your annual report or inform the District Officer if you don’t publish one. Department of ExpenditureIndian Institute of Technology Kanpurelearnposh.com

Quick POSH checklist: Display posters, constitute & train IC, publish policy, run annual training/awareness, maintain confidentiality, submit IC annual report, and assist IC in inquiries. Department of Financial Services

2) Data protection is coming for HR: DPDP Act, 2023

India’s Digital Personal Data Protection (DPDP) Act, 2023 received assent and was published in the Gazette, but rules are still being finalized; draft Rules were released for consultation in Jan 2025 and the regime has not yet been enforced as of today. HR must prepare now—employee data is squarely in scope. MeitYPress Information BureauDLA Piper Data ProtectionThe Economic Times

What HR should ready:

  • Map all employee data (recruitment → exit & alumni).

  • Update consent notices & privacy policy; enable access/correction/erasure flows.

  • Vendor due diligence (HRMS, payroll, background checks, insurance TPAs).

  • Breach-response runbooks and training. Future of Privacy Forum

3) A 30-day compliance tune-up plan (stealable)

Week 1: People & Policies

  • Confirm PF/ESI registrations, point of contact, and working bank mandates; verify due-date calendar (15th).

  • POSH: Re-constitute IC if any member changed; schedule annual training; refresh wall posters. cpf1.mahadiscom.inDepartment of Expenditure

Week 2: Payroll & Records

  • Validate PF wage setup in payroll and ECR generation steps; simulate a delay to see 7Q/14B impact.

  • ESI: Run a wage-ceiling report (₹21,000) to confirm covered employees; fix discrepancies. ESIC

Week 3: Leaves & Benefits

Week 4: Data & Documentation

  • Build a DPDP-ready employee privacy notice (role-based).

  • Create a records map: appointment letters, wage registers, attendance, leave, IC minutes, inspection logs (state Shops & Establishments rules vary—mirror your state’s required registers & formats).

4) “When the Labour Codes land” — what to pre-bake

Even before notification, you can future-proof:

  • Uniform “wages” definition: Expect impacts on basic:HRA:allowances mix, PF base, gratuity, and leave encashment. Run simulations across pay bands. The Economic Times

  • Gig/platform workers’ social security: If you engage gig talent, budget for contributions and registry obligations under the Social Security Code once enforced. Ministry of Labour & Employment

  • Standing orders & dispute resolution: Revisit thresholds and IR protocols for the Industrial Relations Code. Watch state rules. Ministry of Labour & Employment

5) Penalties HR leaders actually feel (and how to dodge them)

  • PF late deposit: 12% p.a. interest (7Q) + 1%/month damages (post-Jun 14, 2024). Build a CFO-visible tracker; escalate by T-3 days. Digital SansadAcuity Law

  • ESI late deposit: Interest/damages per ESIC; due by 15th. Automate challan workflow. cpf1.mahadiscom.in

  • POSH lapses: Non-constitution of IC, no posters, or non-reporting can trigger penalties and reputational damage; courts have taken non-compliance seriously. Schedule a quarterly POSH audit. Department of Expenditure

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