Labour Law Insights: December 2024

We are pleased to release the latest edition of our Labour Law Insights. Like other editions, this edition also covers updates and amendments regarding labour law regulations in various states, EPFO updates and important judgements. We have also provided our insights for the amendment and updates, which we hope will be helpful.

Labour law updates

• With the ongoing efforts toward harmonisation and the framing of rules across states and UTs, alongside significant reforms to streamline compliance, the groundwork for implementing the Labour Codes is nearing completion. As all 36 states/UTs are expected to finalise and pre-publish their draft rules by 31 March 2025, the Ministry of Labour & Employment is committed to ensuring a smooth and efficient transition. The Labour Codes are poised to be implemented soon, ushering in a new era of simplified, uniform, and worker-centric regulations that will enhance compliance, foster Ease of Doing Business, and strengthen the country’s labour ecosystem.
• Employers in Meghalaya, Punjab, Kerala, and Andaman & Nicobar Islands are required to follow the revised rates of minimum wages and dearness allowance as applicable to them pursuant to the notifications issued by the respective labour departments. Most of these rates has been revised due to an increase in the consumer price index.
• The Tripura Government has, in pursuance to the ease of business guidelines issued by DPIIT, launched the online dashboard to provide transparency in the dissemination of information with respect to inspections conducted by the labour department.
• Kerala Government's move to increase the validity period of factory licence from 5 years to 10 years will allow factories to obtain licences for a longer period and allow the state government to collect higher licence fees in one go.
• The establishments/factories in Karnataka are required to ensure the payment of contribution towards Labour Welfare Fund with the revised rates on or before the due date, i.e., 15 January 2025.

EPFO updates

• Employers now have an additional month till 15 January 2025, to ensure that all employees’ UANs are activated and their AADHAAR details are seeded in their bank accounts. This extension provides much-needed relief and flexibility for employers to meet compliance requirements without incurring penalties. Employers must take this extension seriously and prioritise completing these tasks within the provided timeframe to remain compliant with EPFO regulations. Failure to do so could result in legal and financial repercussions.
• Earlier, Interest-bearing claims were not processed between the 25th and the end of each month. However, henceforth, the claims will be processed throughout the month, leading to reduced pendency, timely settlement and optimised utilisation of resources. The recent amendment to the EPFO regulations will significantly benefit members by ensuring they receive interest for the entire period until their claims are settled.
• With the extension of the deadline for filing pending applications for Validation of Option/joint options for Pension on Higher Wages, employers will get more time to accurately upload wage details, ensuring eligible employees receive higher pension benefits. Additionally, this extension is highlighted as the final chance by the EPFO, encouraging prompt action from employers. The initiative aligns with the Supreme Court's directive, ensuring compliance and upholding employees' rights.
• The implementation of the Centralised Pension Payment System (CPPS) marks a significant step toward enhancing the convenience and efficiency of pension disbursement for EPS pensioners. By enabling seamless access to pension payments across any bank and branch nationwide, this initiative underscores EPFO's commitment to improving service delivery for its pensioners. With the successful completion of two pilot projects, the proposed rollout of CPPS in January 2025 is poised to set a new benchmark in pension disbursement, ensuring greater accessibility and financial inclusion for pensioners across India.