01 Before the first hire
Write down the job: what the person will do, the hours, the pay, and how you will judge good work. Give a written appointment letter with the wage, working hours, leave and notice period.
Pay at least the minimum wage notified by your state government for that kind of work, pay on a fixed date, and pay through the bank where possible so there is a record.
02 When EPF becomes compulsory
Under the Code on Social Security, 2020 (in force since 21 November 2025), EPF applies to every establishment with 20 or more employees, whatever the industry.
From 17 September 2026 the wage ceiling for compulsory EPF coverage is ₹25,000 a month; it was ₹15,000 before. Employees earning up to this ceiling must be covered. The employer and the employee each contribute, and the standard rate is 12% of wages. Smaller establishments can also join voluntarily.
Example (hypothetical numbers, not data): a worker earns ₹18,000 a month in a unit covered by EPF. The employer's share at 12% is ₹2,160 a month, and the same amount is deducted from the worker's pay. Budget for the employer's share as part of the real cost of hiring.
03 When ESI becomes compulsory
Under the Code, ESI coverage applies to establishments with 10 or more employees across India. For hazardous or life-threatening work, ESI is compulsory even for a single worker. Establishments with fewer than 10 employees can join voluntarily if employer and employees agree.
ESIC's current wage limit for coverage is ₹21,000 a month (₹25,000 for persons with disability), in effect since 1 January 2017. ESI gives the worker medical care, sickness pay and maternity benefit.
- Count all employees, including contract and casual staff, when checking the 10 and 20 thresholds; ask EPFO or ESIC if unsure.
- Register on the EPFO and ESIC portals as soon as you cross a threshold.
- Deposit contributions by the due date each month; late payment attracts damages and interest.