Company Secretary & Startup Compliance Firm in Delhi NCR & India | Bhavya Sharma and Associates
Labour Law Compliance ESIC EPF Registration for Startups Delhi Bangalore Gurgaon 2025
Ensure complete labour law compliance and employee benefit protection for your growing startup. Bhavya Sharma and Associates specializes in ESIC and EPF registration, payroll management, and statutory compliance across Delhi, Bangalore, and Gurgaon. DPIIT-recognized startups enjoy 5-year self-certification relief on 9 labour laws eliminating routine government inspections. Monthly payroll processing, statutory register maintenance, and compliance calendar management ensure zero penalties and employee satisfaction.
48,000 plus monthly searches show startups delay labour law compliance until mandatory thresholds force action. Critical reality: 10 or more employees triggers ESIC mandatory registration. 20 or more employees triggers EPF mandatory registration. Non-compliance penalties exceed 100,000 rupees monthly plus interest accumulation, employee grievances, and business disruption. Startup India self-certification relieves compliance burden for 5 years but requires proper documentation and employee record maintenance.
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When Is Labour Law Compliance Mandatory for Startups 2025 Threshold Guide
Understanding when compliance becomes mandatory prevents penalties and operational disruptions.
ESIC Registration Mandatory at 10 Employees or More
- Employee State Insurance Scheme mandatory when establishment employs 10 or more employees. Non-seasonal factories and non-hazardous industries trigger this threshold.
- Employee Coverage: All employees earning up to 21,000 rupees monthly gross salary must be covered under ESIC. Employees earning above 21,000 rupees can be voluntarily covered.
- Special Category: Persons with disabilities earning up to 25,000 rupees monthly automatically covered.
- Timeline Requirement: Registration must be completed within 30 days of crossing 10-employee threshold. Delayed registration triggers penalty of 1,000 to 5,000 rupees per day.
- Startup Relief: DPIIT-recognized startups self-certify ESIC compliance for 5 years without government inspections. Significant relief from compliance burden during growth phase.
EPF Registration Mandatory at 20 Employees or More
- Provident Fund registration mandatory when establishment employs 20 or more employees. All employees are covered regardless of salary level.
- Employee Coverage: All employees mandatory in EPF scheme. Employees earning above 15,000 rupees can be voluntarily included. No upper salary limit.
- Timeline Requirement: Registration required within 1 month of crossing 20-employee threshold.
- Contribution Rates: Employer contributes 13.61 percent of basic wage. Employee contributes 12 percent of basic wage. Employer contribution split between pension scheme and provident fund.
- Retirement Benefit: EPF provides comprehensive retirement benefit through provident fund accumulation and pension scheme post-retirement.
Combined ESIC and EPF Compliance
- Startup with 20 employees requires both ESIC and EPF registration simultaneously. Neither is optional above thresholds.
- Non-Overlapping Coverage: ESIC covers employee health insurance and sickness benefits. EPF provides retirement and pension benefits. Both mandatory for different protections.
- Joint Compliance: Monthly contributions required to both ESIC and EPF on separate timelines. ECR filing for EPF and claims processing for ESIC handled separately.
Startup India Self-Certification Relief 5-Year Exemption on 9 Labour Laws
- DPIIT-recognized startups enjoy self-certification relief on 9 labour laws and 3 environmental laws for 3 to 5 years from incorporation date.
- 9 Labour Laws Covered: Building and Construction Workers Act, Inter-State Migrant Workmen Act, Payment of Gratuity Act, Contract Labour Act, Employees State Insurance Act, Provident Fund Act, Shops and Establishments Act, Factories Act, and Occupational Safety and Health Code.
- Self-Certification Process: File Form-1 with Startup India portal declaring compliance with all 9 labour laws. No government verification required for 5 years.
- Inspection Relief: Government inspections only conducted if credible written complaint filed and approved by senior officer. Routine inspections suspended for 5-year period.
- Practical Impact: Significant relief from compliance audits, paperwork, and inspection disruptions during critical growth phase. Focus on scaling product and revenue instead of regulatory compliance.
- Limitation: Self-certification does not exempt actual compliance requirements. All labour law obligations must be followed. Self-certification only provides inspection relief.
Frequently Asked Questions Labour Law Compliance ESIC EPF 2025
Q1: When exactly must I register for ESIC?
Answer: Within 30 days of crossing 10 employees. If delay occurs, registration required immediately with penalties. Registration mandatory for all employees earning up to 21,000 rupees monthly.
Q2: When exactly must I register for EPF?
Answer: Within 1 month of crossing 20 employees. Registration covers all employees regardless of salary. Delay attracts penalties from date threshold crossed.
Q3: What is difference between ESIC and EPF?
Answer: ESIC provides health insurance, sickness benefits, maternity benefits, disability benefits for employees earning up to 21,000 rupees. EPF provides retirement and pension benefits for all employees. Both are separate statutory requirements.
Q4: Do I need to cover all employees in ESIC and EPF?
Answer: ESIC covers employees earning up to 21,000 rupees. EPF covers all employees once 20-employee threshold crossed. Employees earning above 21,000 can voluntarily join ESIC.
Q5: What is EPF contribution rate?
Answer: Employer contributes 13.61 percent of basic wage. Employee contributes 12 percent of basic wage. Total 25.61 percent of basic salary. Higher earning employees can voluntarily join with different rates.
Q6: What is ESIC contribution rate?
Answer: Employer contributes 3.25 percent of gross salary. Employee contributes 0.75 percent of gross salary. Rates can vary by state and industry. Special rates apply for PWDs.
Q7: Can I exclude certain employees from ESIC or EPF?
Answer: ESIC covers employees earning up to 21,000 rupees. Employees earning above can be excluded. EPF covers all employees once 20-employee threshold crossed. No exclusions except senior management or directors in rare cases.
Q8: What happens if I miss EPF contribution deadline?
Answer: Interest accrues at 24 percent per annum from due date. Penalty up to 50 percent of contribution amount. Late ECR filing charged 10 rupees per employee per day capped at 50,000 rupees.
Q9: What happens if I miss ESIC contribution deadline?
Answer: Interest accrues at 12 percent per annum. Penalty imposed at 10 percent of premium amount. Form 7 non-filing charged 500 to 2,000 rupees per month.
Q10: What is Startup India self-certification relief benefit?
Answer: DPIIT-recognized startups self-certify compliance with 9 labour laws for 5 years. Government does not conduct routine inspections during 5-year period. Only if credible complaint filed and approved by senior officer inspection occurs.
Q11: What are 9 labour laws covered under self-certification?
Answer: Building and Construction Workers Act, Inter-State Migrant Workmen Act, Payment of Gratuity Act, Contract Labour Act, Employees State Insurance Act, Provident Fund Act, Shops and Establishments Act, Factories Act, Occupational Safety Code. Actual compliance required but inspection relief provided.
Q12: Do I need to maintain statutory registers?
Answer: Yes mandatory. Muster roll, wages register, ESIC register, EPF register, leave register, safety register must be maintained. Physical or digital format accepted. Audits verify register maintenance.
Q13: What is UAN number and why required?
Answer: Unique Account Number generated by EPFO for each employee. Used for employee identification, fund transfer, and online portal access. Employee can view account balance and contribution history using UAN.
Q14: Can I have separate ESIC and EPF registrations for multiple offices?
Answer: Yes. Each establishment with separate business address requires separate registration. Consolidated reporting possible for parent and subsidiary establishments.
Q15: What documents are needed for ESIC and EPF registration?
Answer: PAN, GST certificate or registration certificate, address proof, bank details, employee list, director details. Digital Signature Certificate mandatory for online submission.
Q16: How long does ESIC and EPF registration take?
Answer: 5 to 10 working days for approval. Registration codes issued same day or within 1-2 days for most applicants. Processing faster through Shram Suvidha portal.
Q17: What is 50 percent wages rule in new labour code?
Answer: At least 50 percent of employee remuneration must be classified as wages for statutory purposes. Affects PF, ESI, gratuity, bonus calculations. Impacts CTC structuring.
Q18: Can I use freelancers instead of employees to avoid EPF ESIC registration?
Answer: No. If freelancers are integral to business operations, they may be classified as employees. New labour codes expanding definition to include gig workers and platform workers.
Q19: What happens if I do not pay employee gratuity at separation?
Answer: Gratuity mandatory after 5 years of service. Non-payment attracts 50,000 to 200,000 rupees penalty. Criminal prosecution possible. Employee can sue for gratuity amount.
Q20: How do I process leave encashment for departing employee?
Answer: Unused leave encashed at basic salary rate. Calculate as basic wage multiplied by unused leave days. Pay in final settlement along with gratuity and notice period salary.
Q21: What is notice period requirement for employee termination?
Answer: Depends on employment contract. Typically 15 days to 3 months. Industrial Relations Code mandates notice period as per contract terms.
Q22: Can I hire interns without EPF or ESIC coverage?
Answer: Depends on engagement nature. Unpaid interns not covered. Paid interns working regularly may be classified as employees. Each case evaluated separately.
Q23: What is accident and injury reporting requirement?
Answer: Workplace accidents and injuries must be reported to ESIC within specified timelines. Medical treatment facilitated through ESIC network. Records maintained in safety register.
Q24: What is health and safety audit requirement for startups?
Answer: Occupational Safety Code requires periodic safety audits. Frequency depends on industry and hazard level. Results documented and corrective actions implemented.
Q25: How often is payroll audit conducted by government?
Answer: Government labor department conducts surprise inspections. Frequency depends on industry risk classification. Proper register maintenance and compliance documentation prevents penalties.
Get Expert Labour Law Compliance and Payroll Support Today
Bhavya Sharma and Associates specializes in complete labour law compliance, ESIC and EPF registration, and payroll management for growing startups across Delhi, Bangalore, and Gurgaon. From ESIC and EPF registration to monthly salary processing, statutory register maintenance, and compliance calendar management, we ensure zero penalties and full employee satisfaction.
Available in: Delhi, Bangalore, Gurgaon, and pan-India delivery.
Services: ESIC and EPF registration and employee enrolment, monthly payroll processing and salary distribution, statutory register creation and maintenance, ECR filing and ESIC Form 7 monthly returns, annual compliance and Form 5 filing, employee benefit calculation and gratuity settlement, Startup India self-certification filing and documentation, labour law audit and compliance review, payroll software integration and automation.
Contact us for custom labour compliance plan and get payroll audit for your startup
Why Choose Bhavya Sharma and Associates for Labour Law Compliance in Delhi Gurgain Noida Mumbai and Bangalore?
Startup Focus Expertise: Complete knowledge of DPIIT self-certification relief for 5 years. Startup-specific compliance planning and timeline management.
- Threshold Management: Guide you precisely when 10-employee and 20-employee thresholds approach. Proactive registration before penalties triggered.
- Payroll Automation: Integrated payroll system with automatic PF, ESI, TDS, ITR calculations. Reduces manual errors and compliance gaps.
- Monthly Compliance: Dedicated team managing ECR filing, Form 7 submission, contribution payments by deadline. Zero missed deadlines.
- Register Maintenance: Professional statutory register preparation. Audit-ready documentation for government inspections.
- New Labour Code Guidance: Complete understanding of 4 consolidated labour codes and implementation timeline for your startup.
- Employee Satisfaction: Transparent salary process, timely benefit processing, grievance redressal support. Reduces employee churn.
Related Services Available: Private Limited Company Registration, Startup India Registration, Founders Agreement with employment clauses, GST Registration, Annual ROC Compliance.