Labour Law Insights: December 2025

Labour law updates

• As the Central Government moves towards fully operationalising the Labour Codes, employers must proactively realign their HR, compliance, and payroll frameworks with the newly pre‑published Central Rules, especially around wages, working hours, social security, and documentation requirements. Strengthening internal compliance systems, updating policies such as standing orders, and preparing for enhanced obligations like appointment letters, medical checks, and digital record‑keeping will be essential. Organisations should also initiate workforce communication, conduct impact assessments, and stay engaged with ongoing consultations to ensure smooth and timely transition once the final rules are notified.
• With Bihar’s full notification of all four Labour Code Rules in December 2025 and Delhi’s draft OSHWC and Industrial Relations Rules under review, employers in both states must proactively modernise compliance systems to align with the updated legal framework. Key priorities include updating HR and payroll systems to reflect the revised wage definitions; recalibrating working hours, leave policies, safety protocols, and welfare facilities under the OSHWC; and revising PF/ESI and other social-security processes to meet the new Social Security Rules. Employers must also review standing orders and employee relations procedures, ensure appointment letters and medical checks meet new requirements, and transition to the unified digital inspection and compliance regime mandated across the codes. To support this transition, organisations should retrain HR and compliance teams, strengthen internal communication, assess operational impacts, and actively engage with the governments — positioning themselves to implement all four streamlined codes smoothly and effectively.
• Industrial Relations Code (Removal of Difficulties) Order, 2025 ensures a seamless transition from the Industrial Disputes Act to the Industrial Relations Code by maintaining adjudication continuity. Employers should monitor further notifications on tribunal constitution and prepare for eventual migration of cases under the new Code framework.
• Two recent Bills signal Parliament’s intent to modernise India’s work culture — one promoting healthier digital boundaries and humane working hours, and the other recognising fathers as equal partners in childcare. Although still at the introduction stage, they reflect evolving workforce expectations. The POSH Amendment Bill 2024 strengthens protections for informal workers by extending complaint timelines, enhancing confidentiality, and increasing penalties, creating a more victim-centric framework. Meanwhile, the Right to Disconnect Bill formalises employees’ right to disconnect, balancing organizational needs with mental well-being. Employers should monitor legislative progress, update compliance frameworks, and initiate policy drafting and engagement for smooth implementation.
• The Office Memorandum addresses the correction of apprenticeship contract duration for one-year trades from 360 days to 365 days on the apprenticeship portal. This update resolves a long-standing discrepancy in apprenticeship contract duration, ensuring uniformity and legal compliance. Establishments should promptly adopt the revised duration and verify updated contracts to avoid administrative issues.
• The Amendment to the Tamil Nadu Shops and Establishments Rules, 1948 signals a strong move toward ease of doing business and digital governance, reducing physical inspections and paperwork. The targeted applicability to IT and ITES establishments reflects the growing importance of tech industries in Tamil Nadu.
• The amendment to the Tamil Nadu Shops and Establishments Act, 1947 introduces a mandatory online self-certification system for employers in Information Technology Software Establishments and IT-enabled services (IT/ITeS).This amendment signals a strong move toward ease of doing business and digital governance, reducing physical inspections and paperwork. The targeted applicability to IT and ITES establishments reflects the growing importance of tech industries in Tamil Nadu.
• The Himachal Pradesh Government has amended the Factories Rules, 1950 under the Factories Act, 1948. The Amendment removes gender-specific language & aligns with modern workplace equality norms. Action points for factories in Himachal Pradesh:
  • Update compliance documentation and HR policies to reflect new working hour limits.
  • Ensure adherence to night work restrictions for women (7 pm to 7 am).
  • Review shift scheduling and overtime practices to avoid violations.

Non-compliance with revised limits may attract penalties under the Factories Act.

• The Goa Government has promulgated the Jan Vishwas (Laws Amendment) Ordinance, 2025 to decriminalise minor offences, rationalise penalties, and promote trust-based governance. The ordinance amends multiple state laws, including the Goa Labour Welfare Fund Act, 1987. Employers should review compliance processes under the Labour Welfare Fund Act, maintain accurate wage deduction and penalty records, and leverage compounding provisions to reduce risk. Non-payment or delays can lead to additional penalties and recovery as land revenue, making strict adherence essential.
• Various entities in different states must regularly monitor minimum wage notifications relevant to their state and employment category to ensure adherence to legal requirements. 

EPFO updates

• The EPFO has announced that no further extension will be granted for Aadhaar-UAN seeding for filing Electronic Challan cum Return (ECR).This directive marks a compliance shift and signals the EPFO’s intent to fully stabilise its Aadhaar-based verification ecosystem. It does not directly impact PF contributors but places complete responsibility on employers to ensure Aadhaar UAN readiness before monthly ECR filing. By ending repeated extensions, the EPFO seeks to strengthen identity verification, minimise data mismatches, and ensure smoother benefits processing. From November 2025 onward, establishments that fail to complete Aadhaar seeding risk ECR filing blockage, which may disrupt statutory PF remittances.
• The EPFO has issued clarifications on the interpretation of continuous service under Para 22(3) of the Employees’ Deposit Linked Insurance (EDLI) Scheme, 1976.This clarification significantly strengthens the fairness of EDLI benefit processing by removing long standing ambiguities around service continuity. It ensures that members or their dependents are not penalised for non-working days such as weekends or official holidays — factors outside their control. The directive does not affect PF contributions but directly improves the accuracy and uniformity of EDLI death claim settlements. Clear guidelines combined with system level updates will reduce disputes, prevent wrongful benefit reductions, and enhance trust in the EDLI framework.
• The EPFO, through Circular No. WSU/2025/E 961539/Refund of erroneous contribution dated 19 December 2025, has issued detailed instructions for correcting wrong EPS contributions arising from employers. This circular streamlines the treatment of EPS contribution errors — one of the most common compliance issues faced by employers. It ensures that members neither lose Pension Service credit nor suffer from incorrect contribution postings due to employer mistakes. Importantly, this directive does not impact PF contribution rules but strengthens the backend correction workflow across the EPFO and Trust managed establishments.
• The EPFO has issued further clarification under the Simplification of Joint Declaration (JD) Process, allowing acceptance of the Transgender Identity Certificate/Card issued through the National Portal for Transgender Persons as a valid document for change in name and gender in EPFO records. This clarification represents a significant step towards administrative inclusion and dignity-based service delivery within the EPFO framework. By formally accepting the Transgender Identity Certificate as valid proof, EPFO removes procedural barriers that could delay or deny rightful corrections in member records. The move aligns EPFO processes with national identity frameworks while reinforcing ease of compliance, legal certainty, and equitable access to social security benefits. The directive strengthens trust in the Joint Declaration mechanism and signals a progressive shift towards responsive governance in member data corrections.

ESI updates

• The broadened wage definition under the Labour Codes will expand ESI coverage, requiring employers to review salary structures for compliance. Key actions include auditing payroll, updating HR systems, and timely registration to avoid penalties. Strategically, restructure allowances to balance compliance and cost predictability. However, employers should wait for notification of final rules for implementing changes pursuant to ESIC coverage.
• The ESIC has issued clarifications on the interpretation and procedural requirements under the Amnesty Scheme, 2025. The Amnesty Scheme offers employers a chance to settle past dues without risk, provided accurate documentation and timely submission. Key actions include certifying records, ensuring strict compliance, and using this window to audit historical practices to prevent future liabilities.
• PMVBRY represents a major policy shift towards incentivising formal employment and improving workforce skills through financial literacy. Employers, especially in MSMEs and manufacturing, should strategically plan hiring during the registration window to maximise benefits. Employees should ensure EPF compliance and programme participation to avail incentives.

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Labour Law Insights: December 2025