Labour Law Compliance Guide (EPF, ESIC, Shops Act)

Compliance Guide

Labour Law Compliance for Indian Businesses

As your business grows and you hire employees, you must comply with various labour laws. Here's what you need to know.

Employees' Provident Fund (EPF)

Applicability: Establishments with 20+ employees

Contribution: 12% by employer + 12% by employee (of basic wages)

Registration: Online at unifiedportal-emp.epfindia.gov.in

Compliance: Monthly contribution by 15th of following month

Employees' State Insurance (ESIC)

Applicability: Establishments with 10+ employees (20+ in some states) where employees earn up to ₹21,000/month

Contribution: 3.25% by employer + 0.75% by employee

Benefits: Medical care, sickness benefit, maternity benefit, disability cover

Registration: Online at esic.gov.in

Shops & Establishment Act

Applicability: All commercial establishments

Registration: Through respective state's labour department portal

Requirements: Working hours, weekly holidays, leave policy, overtime rules

Timeline: Register within 30 days of starting business

Minimum Wages

Central minimum wage: ₹178/day (as of 2024)

State-specific rates may be higher

Check state labour department website for current rates

Wages must be paid by the 7th of following month

Professional Tax

State-level tax on employment income

Employer must deduct and remit monthly

Rates vary by state (typically ₹200/month for employees)

Key Compliance Timelines

Key Takeaways

EPF mandatory for establishments with 20+ employees (12% each by employer and employee)
ESIC mandatory for 10+ employees earning up to ₹21,000/month
Shops & Establishment registration required within 30 days of starting business
Minimum wages vary by state — check your state labour department
Non-compliance attracts penalties and prosecution under respective acts

Disclaimer

This guide is provided for informational and educational purposes only. EduMetrics is not a legal, tax, or financial advisor. Regulations, procedures, and fees are subject to change. Please verify all information on the respective official portals and consult a qualified professional before taking any action.