PF and ESI coverage under the Labour Codes: who is covered?

LiveRec EditorialUpdated

PF and ESI coverage under the Labour Codes follows the Code on Social Security, 2020: the provident fund applies to establishments with 20 or more employees, and ESI to those with 10 or more persons, apart from seasonal factories. ESI also covers hazardous work even with one employee. ESIC coverage now applies across India, not only notified areas.

At a glance

  • PF: 20 or more employees; the "scheduled employment" condition was removed.
  • ESI: 10 or more persons; one employee in notified hazardous work; voluntary opt-in below 10.
  • Wage base: the new wage definition applies from 21 November 2025.
  • ESI coverage ceiling: the Ministry says Rs 21,000 a month in wages continues to apply for now.

Provident fund

The Code allows three schemes: the Employees' Provident Fund Scheme, the Employees' Pension Scheme and the Employees' Deposit Linked Insurance Scheme. The employer's and the employee's contributions are equal, and an employee can choose to contribute more. Rates and the PF wage ceiling are set by notification, so check EPFO for the current figures. See PF and EPFO, UAN and EPS.

Other changes the Ministry lists:

  • A five-year limit for starting EPF inquiries and recovery, to finish within two years.
  • Employers appealing EPFO orders deposit 25% of the assessed amount.

ESI

  • Benefits: sickness, maternity, disablement, dependants', medical benefit and funeral expenses.
  • Coverage extends to plantations that opt in and to port and dock work.
  • For a female employee, dependants include parents-in-law.
  • The Ministry's FAQ says Rs 21,000 a month wages notified for ESI coverage applies until rules are finalised.

See ESI.

What employers should check on PF and ESI coverage under the Labour Codes

Headcount by establishment, wages under the new definition, and registrations on the EPFO and ESIC portals. See what changes for employers.

Where to confirm

Ceilings and rates change by notification. Use the official EPFO and ESIC sites rather than a third-party table.

Sources

This is general information, not legal, tax or immigration advice. Rules change and your situation may differ. Consult a licensed attorney or qualified adviser.