Crores of Indians work in factories, offices, shops, farms and on delivery apps. The government protects them through labour laws and gives them security in old age, illness and accidents through social security schemes. In recent years, many old labour laws were merged into four Labour Codes. Bodies like EPFO and ESIC run the main social security schemes. Exams ask about the codes, EPF, ESI and pension schemes. This post explains them in simple words. It ends with 15 previous year questions.
Key Points (Quick Revision)
- Labour is a subject in the Concurrent List, so both Parliament and State Legislatures can make laws on it.
- 29 central labour laws were merged into four Labour Codes passed in 2019 and 2020.
- EPFO runs provident fund and pension schemes under the EPF Act, 1952.
- ESIC runs health insurance for workers under the ESI Act, 1948.
- Schemes such as e-Shram, PM-SYM and Atal Pension Yojana cover unorganised workers.
1. Why labour codes were made
India had a large number of labour laws, some made before independence. They used different definitions and many forms and registers. This made them hard to follow for both workers and employers.
The Second National Commission on Labour (2002) suggested grouping these laws. The government later merged 29 central laws into four codes. The aim was simpler rules, wider coverage and easier compliance.
2. The four Labour Codes
| Code | Year | Main laws it replaced |
|---|---|---|
| Code on Wages | 2019 | Minimum Wages Act, Payment of Wages Act, Payment of Bonus Act, Equal Remuneration Act |
| Industrial Relations Code | 2020 | Trade Unions Act, Industrial Employment (Standing Orders) Act, Industrial Disputes Act |
| Code on Social Security | 2020 | EPF Act, ESI Act, Maternity Benefit Act, Payment of Gratuity Act and others |
| Occupational Safety, Health and Working Conditions Code | 2020 | Factories Act, Mines Act, Contract Labour Act and others |
The codes were brought into force in November 2025. Detailed rules are made by the Centre and the States, so check the latest notifications for exact provisions.
3. Key features of the codes
- Code on Wages - a minimum wage for all employees, and a national floor wage fixed by the Centre below which States cannot set minimum wages.
- Industrial Relations Code - fixed-term employment is recognised. Firms with up to 300 workers (earlier 100) do not need government permission for lay-off, retrenchment or closure. Workers must give advance notice before a strike.
- Code on Social Security - defines gig workers and platform workers for the first time and allows social security funds for them. Fixed-term employees can get gratuity after one year of service.
- OSH Code - common safety and health standards, and women can work night shifts with their consent and proper safety.
4. EPFO - provident fund and pension
The Employees' Provident Fund Organisation (EPFO) works under the Ministry of Labour and Employment. It was set up under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.
- EPF - the employee and the employer each pay 12% of basic wages and dearness allowance. Part of the employer's share, 8.33%, goes to the pension scheme.
- EPS, 1995 - the Employees' Pension Scheme gives a monthly pension after retirement.
- EDLI, 1976 - gives life insurance cover to members.
- UAN - the Universal Account Number lets a worker keep one PF account across jobs.
The interest rate on EPF is decided every year, so use the latest figure.
5. ESIC - health insurance for workers
The Employees' State Insurance Corporation (ESIC) runs the scheme made under the ESI Act, 1948. It was first started in 1952 at Kanpur and Delhi.
- It covers workers earning up to ₹21,000 a month in covered establishments.
- The employer pays 3.25% and the employee 0.75% of wages.
- Benefits include medical care, sickness, maternity, disablement and dependants' benefits.
These limits and rates are revised from time to time, so check the current ones before the exam.
6. Schemes for unorganised workers
Most Indian workers are in the unorganised sector, without EPF or ESI. Main schemes for them:
| Scheme | Started | What it does |
|---|---|---|
| Atal Pension Yojana | 2015 | Pension of ₹1,000 to ₹5,000 a month after age 60, for people who join between 18 and 40 |
| PM Shram Yogi Maan-dhan (PM-SYM) | 2019 | Pension of ₹3,000 a month after 60; the worker and the government pay equal shares |
| e-Shram portal | 2021 | A national database of unorganised workers, with an e-Shram card for each registered worker |
7. Pensions for government employees
- National Pension System (NPS) - started in 2004 for new central government employees (except the armed forces), and later opened to all citizens. It is regulated by the PFRDA.
- Unified Pension Scheme (UPS) - an option for central government employees under NPS, from 1 April 2025. It gives an assured pension of 50% of average basic pay of the last 12 months, for those with 25 years of service.
Some States have their own pension decisions, so check the current position for your State.
8. Previous year questions
- In which list of the Seventh Schedule is labour placed? – Concurrent List
- How many central labour laws were merged into the Labour Codes? – 29
- How many Labour Codes are there? – Four
- In which year was the Code on Wages passed? – 2019
- Which Code defines gig and platform workers? – Code on Social Security, 2020
- Under the IR Code, up to how many workers can a firm lay off without permission? – 300
- Under which Act was EPFO set up? – EPF and MP Act, 1952
- What share of the employer's PF contribution goes to the pension scheme? – 8.33%
- Under which Act does ESIC work? – ESI Act, 1948
- Where was the ESI scheme first started? – Kanpur and Delhi, 1952
- What is the wage ceiling for ESI coverage? – ₹21,000 a month
- What pension does PM-SYM give after age 60? – ₹3,000 a month
- When was Atal Pension Yojana launched? – 2015
- Which body regulates the National Pension System? – PFRDA
- From when is the Unified Pension Scheme available? – 1 April 2025
9. How to revise this topic
Start with the four codes: Wages 2019, Industrial Relations 2020, Social Security 2020, OSH 2020 - 29 laws merged, in force from November 2025.
Next, learn EPFO: 1952 Act, 12% + 12%, 8.33% to EPS, EDLI 1976, UAN.
Then fix ESIC: 1948 Act, Kanpur and Delhi 1952, ₹21,000 ceiling, 3.25% + 0.75%.
Finally, remember the schemes: APY 2015, PM-SYM 2019, e-Shram 2021, NPS 2004, UPS 2025.
10. Frequently Asked Questions
What are the four Labour Codes?
They are the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020. Together they replaced 29 central labour laws.
When did the Labour Codes come into force?
The four Labour Codes were brought into force in November 2025. Detailed rules are made by the Centre and the States, so check the latest notifications.
What is the difference between EPFO and ESIC?
EPFO runs provident fund, pension and insurance schemes under the EPF Act, 1952. ESIC runs health insurance and cash benefits for workers under the ESI Act, 1948.
Who are gig and platform workers?
Gig workers earn outside a regular employer-employee relationship, such as delivery and ride-hailing workers. Platform workers work through online platforms. The Code on Social Security, 2020 defines them for the first time.
What is the Unified Pension Scheme?
The Unified Pension Scheme is an option for central government employees under NPS from 1 April 2025. It gives an assured pension of 50% of the average basic pay of the last 12 months for those with 25 years of service.
For more Economy topics in simple language, see our Poverty and Unemployment, Insurance Sector and IRDAI and MSME and Startup India posts, or browse the Economy section. Preparing for an EPFO or ESIC exam? Start with the EPFO SSA guide and the ESIC UDC guide.