India’s new Labour Codes, effective from November 21, 2025, have reshaped employment norms across sectors. Employers are navigating cost-neutral compliance strategies, while workers are seeking clarity on salary structures, job security, and benefits. This blog addresses the most pressing questions raised by both sides—covering PF liabilities, appointment formats, overtime rules, and gig worker entitlements—to help organizations stay compliant and employees protect their rights.
1. Wages & Salary Structure
What Employers Are Asking
- How can we restructure CTC to ensure Basic Pay is 50% without increasing total cost?
- Which allowances—like HRA or conveyance—can be legally excluded to keep the Basic component low?
- Will increased Provident Fund (PF) liability apply retrospectively if restructuring was not done in time?
What Workers Are Asking
- Why has my take-home salary dropped even though my CTC remains unchanged?
- Can I opt out of the higher PF contribution to maintain my current take-home pay?
- Will my overtime rate be calculated on the new, higher Basic Pay?
2. Hiring, Firing & Job Security
What Employers Are Asking
- Can we retrench workers without government permission if we have less than 300 employees?
- How do we draft Fixed-Term Employment (FTE) contracts without creating permanent liabilities?
- What is the correct format for mandatory appointment letters to avoid penalties?
What Workers Are Asking
- Can my company terminate me without notice under the new laws?
- If I am a contract worker, will I be made permanent or shifted to a fixed-term contract?
- Am I eligible for gratuity if I work just one year on a fixed-term contract?
3. Exits & Full & Final Settlement
What Employers Are Asking
- Is the 2-day full and final settlement rule mandatory for resignations or only for terminations?
- How can we clear assets and dues within two days when it usually takes 30?
- What penalties apply if we miss the 2-day settlement deadline?
What Workers Are Asking
- I resigned last week—why haven’t I received my dues within two days as per the new law?
- Does the 2-day rule apply to gratuity and PF transfers too?
4. Working Hours, Leave & Overtime
What Employers Are Asking
- If we move to a 4-day work week with 12-hour days, do we still owe overtime for hours beyond 8?
- What safety measures—like cabs or security—are required for women working night shifts? Are they mandatory?
- Do we need to encash leave balances annually, or can they be carried forward?
What Workers Are Asking
- Can I be made to work 12 hours a day without receiving overtime pay?
- If I am rostered for a night shift, can I refuse if I feel unsafe?
- I have worked 180 days this year—am I now eligible for leave under the revised rules?
5. Gig & Platform Work: A New Category
What Aggregators Are Asking
- How do we calculate the 1–2% turnover contribution for the Social Security Fund?
- Does this contribution apply to all partners?
What Riders and Drivers Are Asking
- How do I register for new government benefits like health and insurance?
- Will I receive an official ID card for accessing these benefits?
Summary of Sentiment
- Employers are feeling the pressure of administrative burdens—new registers, tight settlement timelines—and hidden costs like higher PF and gratuity payouts.
- Workers are grappling with financial instability due to reduced take-home pay and uncertainty around job security and benefits.
Compliance Checklist: What Employers and Workers Should Prioritize
For Employers
- [ ] Restructure salary to ensure Basic Pay is at least 50%
- [ ] Review PF and gratuity liabilities for retrospective impact
- [ ] Draft compliant appointment letters and FTE contracts
- [ ] Align HR systems for 2-day full & final settlements
- [ ] Update leave and overtime policies
- [ ] Ensure safety measures for night shifts
- [ ] Calculate Social Security Fund contributions accurately
For Workers
- [ ] Review new salary breakup and PF deductions
- [ ] Confirm overtime and leave eligibility
- [ ] Understand rights under fixed-term contracts
- [ ] Track resignation dates and dues for timely settlement
- [ ] Register for gig worker benefits and ID cards
- [ ] Raise safety concerns during night shifts if needed
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Disclaimer – This blog post is a general guide. It should not be considered legal advice. Consult a legal professional for more details.