The May 2025 edition of our Labour Law Insights covers key regulatory updates across various Indian states, reflecting the evolving ecosystem of labour compliance. This edition highlights revised minimum wage rates in Delhi, Kerala, Rajasthan, and union territories, driven by changes in the Consumer Price Index. It also addresses procedural reliefs in West Bengal, 24x7 operational permissions in Tamil Nadu, and gender-inclusive reforms. Updates from ESIC and EPFO outlines the Government’s commitment to worker welfare and social security.
Labour law updates
- Employers in Delhi, Kerala, Rajasthan, Dadra & Nagar Haveli and Daman & Diu rates of Minimum Wages/Dearness Allowance/Special allowances as applicable to them according to the notifications/orders issued by the respective labour departments. Most of these rates have been revised due to increase in the Consumer Price Index which would support workers in these states to meet the rising cost of living. Furthermore, employers should also take into account arrears of wages payable to eligible employees due to changes in rates of minimum wages especially those effective from back date. This compliance becomes critical for employers because any employee dues not paid to them becomes “unpaid accumulations” under the state specific Labour welfare Fund (LWF) Act and if not paid need to be deposited with the respective LWF authority as per law.
- The order to remove physical/paper submission of returns is a relief to all the employers in West Bengal who raised concerns over paper submission of professional tax returns to the department. Earlier, the employers were supposed to file the return online, then download, print, sign and submit paper copies to the prescribed authority. With the above clarification, they can now upload a signed copy to the portal itself.
- The one-time Puja/Eid ex-gratia relief by West Bengal Government is a gesture of inclusiveness for those workers working in locked-out industrial units and are currently surviving on financial assistance under the FAWLOI scheme.
- The establishments in Tamil Nadu are allowed to work 24*7, subject to certain conditions. This is a welcome move by Tamil Nadu Government towards developing a flexible working environment. Similar initiatives were also taken by governments of Rajasthan, Chandigarh and Karnataka in 2024.
- The factories in Tamil Nadu will take note of the amendment and deposit the contribution towards Labour Welfare Fund (LWF) as per the notification. Earlier all factories were covered irrespective of whether they were operational less than 30 days or more than 30 days, and they were subjected to the hardship of contributing to LWF even if they were operational for 30 days or less. This is a welcome move towards ease of doing business.
- The establishments in Mumbai should ensure registration of their Internal Committee on the SHE BOX portal. This move is aligned with the Central Government’s initiative of having a database and dashboard of internal committees constituted by employers and the status of complaints under consideration of such committees.
- This ordinance is a progressive step towards gender inclusivity and economic modernisation. Allowing women to work night shifts opens up more employment opportunities and supports gender parity in the workforce. At the same time, easing compliance helps small and medium businesses operate more efficiently, aligning with the broader Ease of Doing Business agenda. However, the success of this reform will depend on strict enforcement of safety measures and monitoring of working conditions, especially for women working late hours.
- Employers/factories in Andaman and Nicobar should comply with the revised working hour threshold for workers.
ESIC updates
- The ABVKY scheme ensures continued financial support for workers facing job loss, especially in uncertain economic conditions. By maintaining relaxed eligibility and enhanced relief, the scheme remains accessible and impactful, reinforcing the Government's commitment to worker welfare and social security.
- The notification marks a significant step toward inclusive healthcare by expanding ESI medical benefits to families in 16 more districts of Uttar Pradesh and 8 more locations in Nagaland. It reflects the Government's commitment to strengthening social security for workers and their dependents, especially in underserved regions.
EPFO updates
- The EPFO has released a circular that indicates its practical approach, recognising that data discrepancies can occur despite compliance. The move is likely to reduce the pendency and enhance portability of PF accounts. It benefits job switchers, especially in high-turnover sectors where overlap is often unintentional and rectifiable.
- Maintaining the interest rate at 8.25% signals financial prudence and consistency in the EPFO’s investment outlook. Despite macroeconomic fluctuations and changing bond yields, the EPFO has managed to preserve a relatively high return compared to other fixed-income instruments.
- Based on the numbers and details shared by the EPFO, it cannot be denied that formal employment is growing steadily, signalling recovery and expansion across sectors. Skill development and employment schemes targeting youth are gaining traction. Growth in hospitality, logistics and outsourced services signals post-COVID rebound in service sectors and continued reliance on contractual staffing.
