Labour Law Insights: January 2025

We are pleased to share the latest edition of our Labour Law Insights newsletter. It provides a comprehensive overview of recent labour law updates across various states, key developments from the Employees’ Provident Fund Organisation (EPFO), and significant court rulings. To help you better understand these changes, we have included detailed insights and analyses for each amendment and update. Additionally, this edition features highlights from the Economic Survey focusing on labour law trends and their implications.

The Economic Survey 2024-25

The Government of India has released the Economic Survey for FY2024-25, wherein it has touched on aspects such as the state of the economy, developments in different industrial sectors of the economy, global industry challenges, economy's medium-term outlook of the economy, development on investments and infrastructure, business reforms across industries, climate and environment, and the Government's priority towards employment and skill development as well as its focus on labour law reforms.

The Economic Survey highlights include:

• Deregulated multiple legislations by streamlining processes, reforming governance, rationalising labour regulations, and decriminalising business laws
• Status of draft rules published by Indian states and union territories (UTs) for quick implementation of labour codes
• Initiatives taken so far by Government on skill development through various schemes
• Ease of doing business initiatives on labour laws through introduction of labour codes and push towards implantation of these codes by taking all states and UTs into confidence

Labour law updates

• Employers in Chandigarh, Uttar Pradesh, and Kerala 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.
• The Government of Kerala has amended the Kerala Factories Rules, 1957, through a notification on 4 January 2025. The amendments include replacing Appendix I (maximum number of persons employed) and Appendix III (schedule of fees, excluding those in Appendix I).
• The Goa Factories (Seventeenth Amendment) Rules, 2024, introduce changes to licensing fees, online payment methods, and certificate course requirements, effective 1 January 2026. Additionally, specific rules regarding licence amendments and application forms have been updated.
• The Government of NCT Delhi has issued an order under the PoSH Act, mandating employers in Delhi with 10 or more employees to establish an Internal Committee, with penalties for non-compliance, and promoting the 'She Box Portal' for online complaint registration.
• The Government of Karnataka released criteria for recognising First Aid Training Institutes on 2 January 2025. Key points include registration requirements, trainer qualifications, space and equipment standards, fee limits, and a three-day training program with certificates valid for three years.
• The Government of Meghalaya has amended the Factories rules to increase the validity period of the licence to 1 year which is extendable to 10 years on case-to-case basis. Moreover, the renewal process has been digitalised and shall now be filed online instead of manual process.

EPFO updates

1. The Ministry of Labour and Employment has released an update, which simplifies the process for EPF members to maintain accurate service records and rectify any discrepancies in their UAN details. The initiative ensures greater transparency and accuracy in EPF records by enabling members to delink erroneously linked Member IDs. Members are encouraged to review their UAN-linked information regularly to identify and correct any errors at the earliest. Employers, too, play a crucial role in this process by informing their employees about this facility and guiding them on how to use it effectively. Proactive engagement from both members and employers will help maintain error-free EPF records, ensuring seamless access to benefits.
2. This reform aligns with EPFO’s broader vision of simplifying procedures and enhancing digital efficiency. By removing dependency on employers for most cases, the process becomes faster and more streamlined, significantly reducing turnaround time and addressing a major cause of member grievances. Furthermore, with approximately 94% of transfer claims in FY 2025 expected to be processed directly and instantly, this reform will not only improve service delivery but also boost the transparency and efficiency of EPFO’s digital infrastructure, making the system more member-centric and responsive.
3. This overhaul in the Joint Declaration process is a game-changer for EPFO members. By allowing self-correction for most cases and introducing DigiLocker integration, the process is not only faster but also more user-friendly. The elimination of redundant documentation and employer intervention will significantly reduce processing time, ensuring that personal details remain updated without unnecessary hurdles. Given that several EPFO grievances relate to KYC and member profile issues, this move is expected to drastically cut down complaint volumes and improve service delivery.
4. The introduction of CPPS is a significant step forward in simplifying pension disbursement and making the system more accessible to beneficiaries. By removing jurisdictional barriers and allowing pensions to be processed for any bank account across India, EPFO is ensuring that the process is more inclusive and efficient. Pensioners must ensure their Aadhaar and bank details (IFSC code) are accurate and updated to avoid disruptions. For organisations, the streamlined process under CPPS will lead to better compliance management, reducing the administrative burden associated with pension processing.
5. The EPFO’s clarifications streamline Pension on Higher Wages cases by ensuring equity in pension calculations, enforcing trust rules for exempted establishments, and separating pension dues from arrears to avoid financial and taxation issues. The guidance on retrospective wage arrears balances fairness for employers and compliance with EPS rules. These measures enhance transparency, operational efficiency, and trust in EPFO’s services.
6. This initiative aligns with the government’s digital transformation goals, enhancing efficiency and member empowerment. By reducing dependency on employers, EPFO ensures quicker resolution of profile updates and promotes seamless service delivery. The move also fosters trust among members and reduces administrative burdens for employers, encouraging a more effective compliance ecosystem.

Labour Law Insights: January 2025

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