Labour Law Insights: March 2025

The March 2025 edition of Labour Law Insights provides a comprehensive overview of recent regulatory updates affecting employers across various Indian states. This edition highlights revised minimum wages, welfare initiatives in Kerala, bonus payment guidelines in West Bengal, and extended exemptions for IT/ITES establishments in Andhra Pradesh. Additionally, it covers new safety audit rules in Karnataka, streamlined application processes in Meghalaya, and EPFO updates on compliance extensions and automation.

Labour law updates

• Employers in Kerala, Assam, Tamil Nadu, Madhya Pradesh, Bihar, Gujarat, Uttar Pradesh and those employed with the Central Government are required to follow the revised rates of Minimum Wages /Dearness Allowance as applicable to them pursuant to the notifications 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 the states to meet the rising cost of living.
• The Kerala Government is proactively working for the welfare of workers working in harsh conditions such as security personnel/staff in open spaces of commercial establishments including banks and restaurants on highways. The above circular provides a welcome move from Kerala Government focusing on the welfare of security personnel who primarily work under challenging environments, especially during summers. Similarly, in February, a notification was issued to change the working hours of plantation workers working in direct sunlight to prevent sunstroke.
• The West Bengal Government, in continuation to the guidelines issued for the payment of bonus last year on the occasion of Durga Puja, has issued similar guidelines for the payment of bonus to Muslim employees/workers before Eid-Ul-Fitr of 2025. The employers shall follow and comply with the guidelines issued. The Payment of Bonus Act allows employers to make interim disbursement of statutory bonus to eligible employees, which can be adjusted towards the final obligation of statutory bonus payable for a financial year.
• The Andhra Pradesh Government has further extended exemptions granted to IT/ITES establishments under Andhra Pradesh Shops and Establishments Act, 1988 for another five years, effective 25 March 2025 subject to compliance conditions. This extension again proves the intent of the Government towards ease of doing business for the IT/ITES industry. A similar extension of exemptions was also notified in Telangana in June 2024.
• The issuance of safety audit rules will ensure occupational safety, health measures and related compliance in respect of factories operating in Karnataka as these rules provides a comprehensive framework around safety and health measures. Employers shall incorporate compliances under these rules to their annual compliance calendar.
• The Meghalaya Government took a great initiative towards providing a ease of doing business framework to the employers in the state and would also act as a barrier to corruption practices involved while processing applications for registration and renewal under various labour laws. The above initiative would also enable speedy disposal of applications, saving time and cost of applicants and gives a transparent position to the state about total applications received and time and cost involved in processing the applications.

EPFO updates

• Employers now have an additional month 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 the completion of these tasks within the new timeframe to remain compliant with EPFO regulations. Failure to do so could result in legal and financial repercussions.
• The EPFO has enhanced automation and digital reforms, which significantly expedited claim settlements, improving efficiency and accessibility. Key measures like auto-mode processing, simplified corrections, and reduced documentation have minimised delays. The shift to online claims and centralized IT systems ensures seamless processing, reinforcing EPFO’s commitment to transparency and ease of service.
• The EPFO’s directive to liquidate inoperative accounts is a crucial step in safeguarding member’s interests. Organisations should proactively assist employees in tracking and settling such accounts to prevent financial losses due to non-accrual of interest. Ensuring timely withdrawals or transfers can enhance financial security for retirees.