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POSH at ten, EPF at twenty, ESI, gratuity, bonus and maternity benefit under the new labour codes — what switches on as a business grows.
Quick Statutory Answer
In India, statutory workforce obligations activate automatically based on headcount: the POSH Internal Committee, gratuity, maternity benefit and ESI trigger at 10 employees; EPF and statutory bonus trigger at 20. Since the labour codes took effect on 21 November 2025, these sit in the Code on Social Security 2020 and the Code on Wages 2019, and a contractor needs a licence only from 50 contract workers (earlier 20). Headcount includes full-time, contractual, probationary and part-time workers across all branches.
| Employee Headcount | Governing Law | Mandatory Requirement | Replaced |
|---|---|---|---|
| 10 Employees | POSH Act 2013, Section 4 | Written order constituting Internal Committee (IC) | — (still in force) |
| 10 Employees | Code on Social Security 2020, Chapter V | Gratuity on exit after 5 years (1 year for fixed-term) | Payment of Gratuity Act 1972 |
| 10 Employees | Code on Social Security 2020, Chapter VI | 26 weeks paid maternity leave and nursing breaks (crèche from 50 employees) | Maternity Benefit Act 1961 |
| 10 Employees | Code on Social Security 2020, Chapter IV | ESI contribution for employees under the wage ceiling | ESI Act 1948 |
| 20 Employees | Code on Social Security 2020, Chapter III | 12% employer + 12% employee provident fund contribution | EPF & MP Act 1952 |
| 20 Employees | Code on Wages 2019, Chapter IV | Annual statutory bonus (8.33% to 20% of wages) | Payment of Bonus Act 1965 |
| 50 Contract Workers | OSH Code 2020 | Contractor licence for engaging contract labour | Contract Labour (R&A) Act 1970 (threshold 20) |
At a headcount of 15 workers, statutory compliance triggers include: ESI, Gratuity, Maternity benefit, POSH — Internal Committee. Crossing 10 employees mandates constituting an Internal Committee under POSH Act (s. 4) and brings in gratuity, maternity benefit and ESI under the Code on Social Security, 2020. EPF and statutory bonus thresholds remain at 20 employees.
Yes. Under the First Schedule to the Code on Social Security, 2020 — which replaced the EPF & MP Act on 21 November 2025 — the provident fund chapter applies to every establishment employing twenty or more employees. Coverage generally continues even if the headcount later falls below twenty.
Ten. Section 4 of the POSH Act, 2013 requires an employer with ten or more workers to constitute an Internal Committee by written order, counting workers of every kind including contractual and part-time. The POSH Act was not folded into the labour codes and remains in force.
To every shop or establishment with ten or more employees on any day in the preceding twelve months, under the First Schedule to the Code on Social Security, 2020, which replaced the Payment of Gratuity Act on 21 November 2025. Once it has applied, it continues to apply even if the number later falls.
Ten. The Code on Social Security, 2020 applies the ESI chapter to every establishment with ten or more persons, other than a seasonal factory. Under the old ESI Act the threshold was left to state notification and some states applied twenty; that variation ended when the Code took effect on 21 November 2025.
From fifty contract workers, under the OSH Code, 2020. The Contract Labour (Regulation and Abolition) Act set the threshold at twenty; the government raised it to fifty when the code took effect on 21 November 2025.
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