# India Employment Law Quick Reference: Labour Law Checklist, Rates and Documents
An India employment rules reference for counsel, People Ops and finance teams, with a labour law checklist, the current statutory figures and the standard employment documents in one place, each rule linked to its government source.
- Applies to: Companies employing staff in India, including through Versatile Club's Employer of Record (EOR) service
- Status: Live
- Verified: 2026-10-29
- Canonical page: https://versatile.club/docs/reference/
If you're counsel checking a vendor, or a People Ops lead building one checklist of India rules, you need each duty tied to the law that sets it. An India employment law quick reference keeps the current labour law rules and figures, and the documents an employer and its staff should hold, in one place. Every rule links the government instrument it comes from, and the figures were last checked on 29 October 2026.
Versatile Club is an India-only Employer of Record (EOR). It applies every rule here as the employer for the teams it employs on your behalf.
## At a glance {#at-a-glance}
| Where | What it answers | Who it's for |
|---|---|---|
| The checklist and law sections on this page | What Indian labour law requires of a private employer, from minimum wages to notice | Counsel and People Ops leads |
| [India statutory rates and thresholds](https://versatile.club/docs/reference/statutory-rates-and-thresholds/) | Current EPF, EPS, EDLI, ESI, gratuity, bonus, TDS and state levy figures, with a worked employer cost example | CFOs and finance teams costing India staff |
| [Documents you and your employees receive](https://versatile.club/docs/reference/documents-you-receive/) | Every employment document owed to your company and your staff, and when each arrives | People Ops leads and legal reviewers |
India's employment law now sits mainly in four Labour Codes, on wages, social security, industrial relations and working conditions. Income tax on salary sits in a separate Act. The checklist below turns those instruments into the duties a private employer actually carries.
## India employment law quick reference: the figures teams look up first {#key-figures}
When you plan an India hire, look up these numbers first. The full rates page has the rest, including pension, insurance, state levies and income tax slabs.
| Rule | Current figure |
|---|---|
| **Employer Provident Fund** | [12% of wages, matched by the employee](https://egazette.gov.in/WriteReadData/2026/273957.pdf) |
| **EPF wage ceiling** | [₹25,000 a month since 17 September 2026](https://www.labour.gov.in/static/uploads/2026/09/2b0f1dbbd3769fc388416186ec145328.pdf) |
| **[ESI contributions](https://versatile.club/docs/compliance/esic/)** | [3.25% from the employer and 0.75% from the employee](https://roap.esic.gov.in/ro-sro-contribution) |
| **ESI coverage** | [Wages up to ₹21,000 a month](https://roharyana.esic.gov.in/attachments/publicationfile/Standard_Note_on_ESI_Scheme_as_on_01_01_2026_1791271940.pdf) |
| **Gratuity** | [Fifteen days' wages for each completed year, after five years' service](https://www.labour.gov.in/static/uploads/2025/07/b0620548445580767b5c0d18c95c26f7.pdf) |
| **[Salary TDS deposit](https://versatile.club/docs/tax/tds-on-salary/)** | [Seven days after the month ends](https://www.incometax.gov.in/iec/foportal/sites/default/files/2026-03/En-Notified-IT-Rules-2026-20-03-2026.pdf) |
| **Yearly salary certificate** | [Form 130, formerly Form 16, by 15 June after the tax year](https://www.incometaxindia.gov.in/documents/d/guest/form-130-faqs) |
The filing list marks September's ESI not applicable because every sample salary is above the ₹21,000 ceiling, so the coverage limit decides whether ESI applies at all.
The yearly salary certificate for 2026-27 is listed as available by 15 June 2027. The screen uses the old name Form 16, now Form 130.
To see what these add to one salary, the [employee cost calculator](https://versatile.club/tools/employee-cost-calculator/) works out the employer side.
## India employment law checklist {#checklist}
Use the checklist below to confirm each duty is covered, whoever runs your payroll. Labour laws in India apply to private companies of every size, though some duties start at a headcount threshold. The [Labour Ministry's Code on Wages FAQ](https://www.labour.gov.in/static/uploads/2026/01/bc6ce1b10f6e3311e78497072ca58686.pdf) says the Code "is now universally applicable to all employees, irrespective of their sector or category."
| Area | What the employer must do | Law |
|---|---|---|
| **Appointment letter** | [Issue a letter of appointment to every employee](https://www.labour.gov.in/static/uploads/2025/07/e0971b414d2951d58dd958ecec9c8c09.pdf) on joining | OSH Code, s.6(1)(f) |
| **Minimum wages** | [Pay at least the minimum rate the appropriate government notifies](https://www.indiacode.nic.in/indiacode/bitstream/123456789/15793/1/aA2019-29.pdf), which can't fall below the floor wage | Code on Wages, ss.5 and 9 |
| **Salary structure** | Keep excluded allowances within one-half of pay, or the [excess is added back to wages](https://egazette.gov.in/WriteReadData/2019/210356.pdf) for PF, gratuity and bonus | Code on Wages, s.2(y) |
| **Pay day** | Pay monthly wages [before the seventh day of the following month](https://www.indiacode.nic.in/indiacode/bitstream/123456789/15793/1/aA2019-29.pdf) | Code on Wages, s.17(1) |
| **Deductions** | Keep total deductions in a wage period to [no more than 50% of wages](https://www.labour.gov.in/static/uploads/2025/06/c328da14bbb15fc4ad571dc33e7a4ab3.pdf) | Code on Wages, s.18 |
| **Wage slips** | [Issue wage slips](https://egazette.gov.in/WriteReadData/2019/210356.pdf) in the prescribed form | Code on Wages, s.50(3) |
| **Equal pay** | [Pay the same wages regardless of gender](https://www.labour.gov.in/static/uploads/2025/06/c328da14bbb15fc4ad571dc33e7a4ab3.pdf) for the same or similar work | Code on Wages, s.3 |
| **Working hours** | Keep covered workers to [eight hours a day and six days a week](https://egazette.gov.in/WriteReadData/2020/222112.pdf), subject to notified exceptions | OSH Code, ss.25 and 26 |
| **Overtime** | Pay [at least twice the normal rate](https://www.labour.gov.in/static/uploads/2026/01/bc6ce1b10f6e3311e78497072ca58686.pdf) for hours beyond a normal working day | Code on Wages, s.14 |
| **Annual leave** | [One day of paid leave for every 20 days worked](https://www.labour.gov.in/static/uploads/2025/07/e0971b414d2951d58dd958ecec9c8c09.pdf), after 180 days' work in the year | OSH Code, s.32 |
| **Maternity** | Provide [maternity benefit of up to twenty-six weeks](https://www.indiacode.nic.in/indiacode/bitstream/123456789/16823/1/aA2020-36.pdf) | Code on Social Security, s.60 |
| **Provident Fund** | Register at 20 or more employees and [pay 12% of wages each month](https://egazette.gov.in/WriteReadData/2026/273957.pdf), up to the ceiling | Code on Social Security; EPF Scheme, 2026 |
| **ESI** | Cover employees [drawing wages up to ₹21,000 a month](https://romaharashtra.esic.gov.in/ro-sro-about-us) where 10 or more people work | ESI scheme under the Code |
| **Gratuity** | Pay [fifteen days' wages per completed year after five years](https://www.labour.gov.in/static/uploads/2025/07/b0620548445580767b5c0d18c95c26f7.pdf), within thirty days of it falling due | Code on Social Security, ss.53 and 56 |
| **Statutory bonus** | Pay [8.33% to 20% of wages](https://www.labour.gov.in/static/uploads/2026/02/83978455025732b99b0165def80ab171.pdf) to eligible employees each year | Code on Wages, s.26 |
| **Retrenchment notice** | Give a worker with a year's service [one month's notice in writing, or wages in lieu](https://www.labour.gov.in/static/uploads/2025/07/682a44b5426bff2c1f4943ee1b2fd566.pdf) | Industrial Relations Code, s.70 |
| **Final pay on exit** | Pay wages [within two working days of resignation or removal](https://www.labour.gov.in/static/uploads/2025/06/c328da14bbb15fc4ad571dc33e7a4ab3.pdf) | Code on Wages, s.17(2) |
| **Professional tax** | Deduct and deposit it [in the state where the employee works](https://ptax.karnataka.gov.in/ptemployer/FAQ) | State professional tax laws |
| **Income tax** | Deduct it monthly and [deposit it within seven days of the month's end](https://www.incometax.gov.in/iec/foportal/sites/default/files/2026-03/En-Notified-IT-Rules-2026-20-03-2026.pdf) | Income-tax Rules, 2026, rule 218 |
| **Salary certificate** | Issue [Form 130 to each employee after the tax year](https://www.incometaxindia.gov.in/documents/d/guest/form-130-faqs) | Income-tax Rules, 2026, rule 215 |
## What the law says {#the-law}
Each rule below quotes the instrument that creates it, so a legal reviewer can check the wording against the source.
### Minimum wages and the floor wage {#law-minimum-wages}
The Code states: "No employer shall pay to any employee wages less than the minimum rate of wages notified by the appropriate Government." The Central Government fixes a floor wage, and state minimum rates can't fall below it. So the minimum salary for a role depends on the state and the work, as set in the [Code on Wages](https://egazette.gov.in/WriteReadData/2019/210356.pdf).
What to check: look up the state's current minimum rate notification for the role, because no state rate can fall below the floor wage.
### Salary structure and the one-half rule {#law-salary-structure}
Wages under the Code are basic pay, dearness allowance and retaining allowance. Where excluded allowances pass one-half of total pay, the excess "shall be deemed as remuneration and shall be accordingly added in wages under this clause." In practice, a salary structure with basic below half of pay raises the base for PF and gratuity anyway, under the [Code on Wages](https://www.indiacode.nic.in/indiacode/bitstream/123456789/15793/1/aA2019-29.pdf).
What to check: confirm that basic pay, dearness allowance and retaining allowance make up at least half of total pay.
### Working hours {#law-working-hours}
The OSH Code limits a covered worker's day and week. It says: "No worker shall be required or allowed to work, in any establishment or class of establishment for more than" eight hours a day. Section 26 adds: "No worker shall be allowed to work in an establishment for more than six days in any one week." Both rules sit in the [OSH Code](https://egazette.gov.in/WriteReadData/2020/222112.pdf).
What to check: confirm the role counts as a covered worker, then look for any notified exceptions.
### Overtime {#law-overtime}
Hours beyond a normal working day earn the overtime rate. A Ministry FAQ restates it: workers are "entitled to the overtime rate which shall not be less than twice the normal rate of wages." The [Ministry FAQ on the Code on Wages](https://www.labour.gov.in/static/uploads/2026/01/bc6ce1b10f6e3311e78497072ca58686.pdf) also confirms that flexible hours don't reduce the minimum wage.
What to check: pay hours beyond a normal working day at no less than twice the normal rate.
### Annual leave {#law-leave}
A worker who has worked 180 days or more in a calendar year earns "one-day leave for every twenty days of his work." Unused leave carries forward up to thirty days, and the worker can ask to encash leave at the end of the year, under the [OSH Code, section 32](https://www.labour.gov.in/static/uploads/2025/07/e0971b414d2951d58dd958ecec9c8c09.pdf).
What to check: confirm the worker has reached 180 days in the calendar year, and carry forward no more than thirty days of unused leave.
### Notice and final pay {#law-notice}
Indian labour law sets notice for retrenchment, not for every resignation. A worker with a year's service can't be retrenched without "one month's notice in writing indicating the reasons for retrenchment," or wages in lieu. That rule sits in the [Industrial Relations Code](https://www.labour.gov.in/static/uploads/2025/07/682a44b5426bff2c1f4943ee1b2fd566.pdf). On any exit, the Code on Wages also requires final wages within two working days.
What to do: for a resignation, read the employment contract and any state rules for notice, and pay final wages within two working days.
### Maternity benefit {#law-maternity}
The Code on Social Security says: "The maximum period for which any woman shall be entitled to maternity benefit shall be twentysix weeks." Shorter periods apply in some cases, such as a woman with two or more surviving children, under the [Code on Social Security](https://www.indiacode.nic.in/indiacode/bitstream/123456789/16823/1/aA2020-36.pdf).
What to check: confirm which period applies, because shorter periods apply in some cases.
### Provident Fund and ESI {#law-pf-esi}
The EPF wage ceiling is set by notification. S.O. 5109(E) fixes "rupees twentyfive thousand (₹25,000) per month as the wage ceiling for the purposes of Chapter III" of the Code. It took effect on 17 September 2026. The [notification](https://www.labour.gov.in/static/uploads/2026/09/2b0f1dbbd3769fc388416186ec145328.pdf) replaced the ceiling set in May 2026. The rates page covers ESI coverage and contributions in the same depth.
What to check: confirm your payroll uses the newer ceiling, not the one set in May 2026.
### Gratuity {#law-gratuity}
Gratuity is due on leaving after the employee has "rendered continuous service for not less than five years." Death, disablement and the end of a fixed term are exceptions to the five-year rule. The amount and the thirty-day payment deadline are in the [Code on Social Security, section 53](https://www.indiacode.nic.in/indiacode/bitstream/123456789/16823/1/aA2020-36.pdf).
What to check: confirm the employee has five years' continuous service or falls under an exception, and pay within thirty days.
## Why the rules moved in the last year {#recent-changes}
Much of India's employment law was [rewritten between late 2025 and late 2026](https://versatile.club/docs/updates/), so older checklists are often out of date.
- **The Labour Codes.** The [Industrial Relations Code](https://egazette.gov.in/WriteReadData/2025/267883.pdf) came into force on 21 November 2025, and the [Code on Social Security's listed provisions](https://egazette.gov.in/WriteReadData/2025/267882.pdf) took effect the same day. Together with the other two Codes, they replaced several older Acts.
- **A new Income-tax Act.** Salary TDS now runs under the [Income-tax Act, 2025](https://egazette.gov.in/WriteReadData/2025/265620.pdf), so section and form numbers changed from 1 April 2026. The [employee income tax section](https://versatile.club/docs/tax/) maps the old names to the new ones.
- **New EPF schemes and a higher ceiling.** The EPF, pension and insurance schemes of 2026 took effect on 1 July 2026. The September 2026 notification then raised the PF wage ceiling, which changes the PF cost of many offers. The [Provident Fund page](https://versatile.club/docs/compliance/provident-fund/) works through the effect.
## How Versatile Club applies these rules {#how-versatile-applies}
Versatile Club's Employer of Record (EOR) service employs your India staff on its own Indian company, Foo Falcon Technologies Pvt Ltd. It files their PF, ESI, TDS and professional tax under its own registrations, which cover all 28 states. The [entity and registrations page](https://versatile.club/docs/compliance/entity-and-registrations/) lists the identifiers you can check.
The master services agreement names Foo Falcon Technologies Private Limited, trading as Versatile Club, as the employer of record. That entity carries the duties in the checklist above.
Each month your finance team receives the records behind those filings: PF and ESI challan confirmations, TDS deposit receipts and a [compliance status report](https://versatile.club/docs/payroll/monthly-client-pack/). They arrive with [the monthly payroll summary](https://versatile.club/docs/payroll/monthly-payroll/) and one USD invoice, covered on the [invoices and payment page](https://versatile.club/docs/billing/invoices-and-payment/).
One sample payroll month from invoice to filings, with PF, professional tax and income tax marked complete. All amounts shown are sample figures.
## Find a rule by question {#by-question}
Each question below points to the page that answers it in full.
### What does an employee cost on top of salary? {#q-cost}
Start with the [statutory rates table](https://versatile.club/docs/reference/statutory-rates-and-thresholds/), which works through a full employer cost for two sample salaries. The [cost of hiring in India guide](https://versatile.club/blogs/cost-of-hiring-in-india/) adds the wider picture.
### Which documents should a new hire receive? {#q-documents}
The [employment documents list](https://versatile.club/docs/reference/documents-you-receive/) covers each document, from the appointment letter to the yearly tax certificate, and when it arrives.
### Who is covered by ESI? {#q-esi}
ESI covers lower-paid employees in workplaces above a headcount threshold. The [ESI page](https://versatile.club/docs/compliance/esic/) explains coverage, rates and the monthly proof.
### When is each filing due? {#q-filing-dates}
PF and ESI are due mid-month, TDS within seven days of the month's end and the salary TDS statement each quarter. The [India compliance calendar](https://versatile.club/docs/compliance/compliance-calendar/) lists every monthly and yearly deadline.
The filing list tracks the quarterly salary TDS return due 31 October 2026. The screen uses the old name Form 24Q, now Form 138.
### How is income tax deducted from salary? {#q-income-tax}
The employer estimates the year's tax, deducts a share each month and deposits it. The [guide to TDS on salary](https://versatile.club/docs/tax/tds-on-salary/) walks through slabs and deductions.
A sample payslip's deductions: employee PF, professional tax and income tax withheld under the rules above. The amounts are sample data.
### What goes into an Indian employment contract? {#q-contract}
The [employment contract page](https://versatile.club/docs/contracts/employment-contract/) covers the terms the EOR issues, including pay, hours, leave and notice.
### How fast can someone start? {#q-start}
[Onboarding in five business days](https://versatile.club/docs/onboarding/onboard-an-employee-in-five-days/) sets out each day, from the signed offer to PF and payroll set-up.
The onboarding tracker shows each new hire's progress. Details in means the hire has done their part and the EOR is preparing the contract, PF and payroll.
### What do the terms mean? {#q-terms}
The [India EOR and payroll glossary](https://versatile.club/glossary/) defines PF, ESI, TDS and the rest in plain words.
## What goes wrong and what to check {#what-goes-wrong}
- **The PF wage ceiling in your payroll is out of date.** The September 2026 notification raised the ceiling, which changes the PF cost of many offers. Check the ceiling in your payroll against the figure in the table at the top of this page.
- **Basic pay sits below half of total pay.** The excess of excluded allowances is added back to wages for PF, gratuity and bonus, so those costs come out higher than the salary structure suggests. Keep basic pay, dearness allowance and retaining allowance at half of total pay or more.
- **Final wages are paid after two working days.** The Code on Wages requires final pay within two working days of resignation or removal, on any exit. Compare the exit date with the payment date before you close the file.
- **A filing date passes.** TDS is due within seven days of the month's end, PF and ESI mid-month, and the salary TDS statement each quarter. Check the compliance calendar for every deadline, and ask Versatile Club for the TDS deposit receipts and compliance status report in the monthly pack.
- **An older checklist gives the wrong form or section numbers.** Guides that cite the earlier Acts may use outdated numbers, and Form 16 is now Form 130 while Form 24Q is now Form 138. Check any guide's date against the 21 November 2025 and 1 April 2026 changes.
## Common questions {#common-questions}
#### What should an India employment law quick reference cover? {#faq-quick-reference}
It should cover pay, hours, overtime, leave, social security, exit rules and tax withholding. Pay means minimum wages, salary structure, pay day and deductions. The checklist on this page lists each duty with the law that sets it.
#### Where can I find India's current statutory rates in one place? {#faq-rates-one-place}
On the India statutory rates and thresholds page in this section. Each figure links its government source and shows the date it was last checked.
#### What are the main labour laws in India for private companies? {#faq-private-companies}
The four Labour Codes cover wages, social security, industrial relations and working conditions. Most of their provisions apply from 21 November 2025. Salary tax sits in the Income-tax Act, 2025, and each state adds its own professional tax and shop rules.
#### What is the minimum salary in India as per labour law? {#faq-minimum-salary}
There is no single national amount. Each state notifies minimum rates for work in its area, and none can fall below the floor wage the Central Government fixes. Check the state's current notification for the role.
#### What are the working hours under Indian labour law? {#faq-working-hours}
For workers covered by the OSH Code, the limit is eight hours a day and six days a week. The government can notify exceptions and spread-over limits.
#### What does Indian labour law say about overtime? {#faq-overtime}
Hours worked beyond a normal working day must be paid at no less than twice the normal rate of wages, under the Code on Wages.
#### What is the notice period as per labour law in India? {#faq-notice-period}
The law sets one month's written notice, or wages in lieu, before retrenching a worker with a year's service. Notice on resignation comes from the employment contract and any state rules.
#### How should a salary be structured under the Labour Codes? {#faq-salary-structure}
Keep basic pay, dearness allowance and retaining allowance at half of total pay or more. If excluded allowances go beyond one-half, the excess counts as wages for PF, gratuity and bonus.
#### How current are these figures? {#faq-how-current}
Every figure in this section was checked against its government source on 29 October 2026. Figures without a verified government source are left out until one is found.
#### Do the old Acts still apply? {#faq-old-acts}
The Labour Codes repealed several older Acts, with the main provisions in force from 21 November 2025. The Income-tax Act, 2025 applies from 1 April 2026. Older guides that cite the earlier Acts may use outdated numbers.
#### Which rules does Versatile Club handle as the employer? {#faq-versatile-handles}
PF, ESI, TDS and professional tax, filed under [its own registrations](https://versatile.club/docs/compliance/entity-and-registrations/), plus gratuity as part of the Full and Final settlement on exit.
Versatile Club's India addendum commits to an appointment letter and a wage structure with basic at half of pay or more, matching the checklist's salary structure rule.
#### Does this cover states other than Karnataka? {#faq-other-states}
Yes. The rates page lists professional tax and labour welfare fund figures for each state with a government source. Versatile Club holds registrations across all 28 states.
#### Who do I ask about a rule for my team? {#faq-who-to-ask}
Write to the Versatile Club team through [the contact page](https://versatile.club/contact-us/), and include the state your employee works in.
## Related {#related}
- [Provident Fund (EPF)](https://versatile.club/docs/compliance/provident-fund/): how PF works for an employee on an EOR payroll.
- [Versatile Club service documentation](https://versatile.club/docs/): every service component, page by page.
- [Test India before a GCC](https://versatile.club/docs/use-cases/test-india-before-a-gcc/): using the same rules to plan your own entity later.
- [India employment contract, leave and compliance guide](https://versatile.club/blogs/india-eor-employment-contract-leave-and-compliance-guide/): the wider picture for founders.
- [Payroll compliance in India](https://versatile.club/blogs/payroll-compliance-in-india/): the statutory calendar in context.
- [India payroll compliance and calculation](https://versatile.club/india-payroll/compliance-calculation/): how the figures turn into a payslip.