1. Key Changes & Impact
- Gratuity (Big Change)
- Fixed Term Employees are now eligible for Gratuity after just 1 year of service. The 5-year rule remains for regular employees.
- Gig Workers
- Aggregators (Uber, Zomato, etc.) must contribute 1-2% of annual turnover to a Social Security Fund.
- EPF & ESI
- Voluntary coverage option available for establishments with < 20 employees. Hazardous industries must register regardless of size.
2. Offences & Penalties
Criminal liability has been introduced for deduction defaults.
- Failure to pay contributions (Employee Share) If you deduct PF/ESI but don't deposit: Imprisonment min 1 year (up to 3 years) + Fine ₹1 Lakh.
- Maternity Benefit Default Imprisonment up to 6 months or Fine up to ₹50,000.
3. HR Action Checklist
- Registration: Ensure all establishments are registered on Shram Suvidha.
- Classification: Identify "Fixed Term Employees" vs "Contractors" vs "Gig Workers".
- Gratuity Provisioning: Ask Finance to re-calculate Gratuity liability (actuarial valuation) considering the 1-year rule for FTEs.
- Aadhaar Seeding: 100% Aadhaar seeding is mandatory for PF/ESI benefits.
4. Frequently Asked Questions
Is Gratuity payable after 1 year? ▼
Yes, but only for Fixed Term Employees (FTE). Regular permanent employees still require 5 years of continuous service.
Are Gig Workers covered? ▼
Yes. Aggregators (like food delivery apps) must contribute 1-2% of annual turnover to a Social Security Fund for gig workers.