Statutory Employee Benefits in India: A Checklist for Employers
Before an employer designs a benefits program that wins talent, it needs to get the floor right. Statutory employee benefits in India are the benefits the law requires you to provide, and they depend on your headcount, the wages you pay, the states you operate in and the kind of work your people do. Getting them wrong can mean interest, penalties and, more importantly, employees who are left without protection when they need it.
This checklist covers the main statutory benefits in plain language. It is general information, not legal advice. Labour law in India is in transition, so always confirm details with your legal or payroll adviser.
A note on the labour codes
India has consolidated 29 central labour laws into four labour codes: the Code on Wages, the Industrial Relations Code, the Code on Social Security and the Occupational Safety, Health and Working Conditions Code. The central government brought the codes into effect in late 2025, but central and state rules are still being finalised in places. In practice, many employers are mapping their existing obligations under the older Acts to the new codes while watching for state notifications. The checklist below uses the familiar names because most HR and payroll teams still work with them.
The statutory employee benefits in India checklist
1. Provident Fund (EPF) and EDLI
- Applies to establishments with 20 or more employees.
- Employer and employee each contribute a share of basic wages and dearness allowance, commonly 12% each, with the wage ceiling for mandatory coverage set by the EPFO.
- The Employees' Deposit Linked Insurance (EDLI) scheme gives a life cover benefit to the nominee if a member dies while in service.
Check: Are all eligible employees, including new joiners and fixed-term staff, enrolled from day one? Are Universal Account Numbers linked and KYC complete?
2. Employees' State Insurance (ESI)
ESI provides medical care, sickness benefit, maternity benefit and disablement benefit to covered employees.
- Generally applies to establishments with 10 or more employees in notified areas.
- Covers employees earning up to the wage ceiling notified by ESIC (currently Rs 21,000 per month).
- Employer and employee contribute a percentage of wages.
Check: As salaries rise, employees can move above the ceiling and out of ESI. Do you have a plan, such as group health insurance, so they are not left without cover?
3. Gratuity
- Payable to employees who leave after the qualifying period of continuous service (traditionally five years; the Code on Social Security provides a shorter period for fixed-term employees).
- Calculated on last drawn wages and years of service, subject to a statutory ceiling.
Check: Is gratuity liability funded or provisioned? Are fixed-term contracts reviewed under the new rules?
4. Maternity benefit
The Maternity Benefit Act, now part of the Code on Social Security, provides up to 26 weeks of paid maternity leave for eligible women for the first two children, along with benefits for adoptive and commissioning mothers, a crèche facility above a headcount threshold, and the option of work from home where the work allows it.
Check: Is your leave policy written down, communicated and applied the same way across locations?
5. Statutory bonus
- Payable to eligible employees under a wage threshold, within a minimum and maximum percentage of wages.
Check: Has the eligibility threshold been applied correctly after salary revisions?
6. Employee compensation for workplace injury
Employers are liable to pay compensation for injury, occupational disease or death arising out of and in the course of employment. Employees covered under ESI are protected through ESI instead. Many employers buy employee compensation insurance to cover this liability for those outside ESI.
7. Occupational health duties
For factories, mines, construction and other hazardous processes, the law expects more than insurance:
- Pre-employment and periodic medical examinations for workers in specified hazardous processes.
- An occupational health centre, first-aid boxes, trained first-aiders and ambulance arrangements, depending on headcount and risk.
- Health records maintained for the period the rules require.
Check: Do you know which of your sites fall under these requirements and when each worker's next examination is due?
8. Workplace safety and dignity
- An Internal Committee under the POSH Act for workplaces with 10 or more employees.
- Safe working conditions, welfare facilities and working-hours limits under the OSH Code and state shops and establishments laws.
A quick compliance summary table
| Benefit | Who it typically applies to | What HR should track |
|---|---|---|
| EPF and EDLI | Establishments with 20+ employees | Enrolment, monthly filings, nominations |
| ESI | 10+ employees, wages up to the ceiling | Coverage changes after salary revisions |
| Gratuity | Employees meeting the service period | Liability funding, fixed-term rules |
| Maternity benefit | Eligible women employees | Policy, leave tracking, crèche, return to work |
| Statutory bonus | Employees under the wage threshold | Annual calculation and payment |
| Employee compensation | Employees not covered by ESI | Insurance and incident records |
| Occupational health | Factories and hazardous processes | Medical exams, records, first aid |
Thresholds and ceilings change over time and can vary by state. Treat this table as a starting point for a conversation with your adviser.
Where statutory benefits stop
Statutory benefits are designed as a safety net. They do not usually cover:
- Hospitalisation for employees above the ESI wage ceiling.
- Family members beyond what a scheme defines.
- Everyday outpatient care, such as doctor visits, diagnostics and medicines.
- Mental health support, preventive checkups or chronic condition management.
That is why most employers layer voluntary benefits, such as group health insurance, OPD cover and wellness programs, on top. A good rule: fix compliance gaps first, then design voluntary benefits around what your people actually need.
Practical steps for HR this quarter
- List every site, its headcount and its state, and map which laws apply.
- Reconcile payroll data with PF and ESI enrolment.
- Identify employees who have recently crossed the ESI wage ceiling.
- Review the health exam schedule for workers in hazardous processes.
- Check that policies (maternity, POSH, leave) are documented and shared.
- Book a review with counsel on how the labour code rules in your states affect you.
How MeWeSalus Care can help
MeWeSalus Care helps employers organise pre-employment, periodic and statutory health checkups, along with onsite camps and clear health records, as part of its corporate health checkup packages. If you want help planning occupational health checkups or building voluntary benefits on top of your statutory base, talk to our team.
Frequently Asked Questions
Do the new labour codes replace the older employment laws?
The four labour codes consolidate many older central laws, including the EPF, ESI, Gratuity and Maternity Benefit Acts, into the Code on Social Security and related codes. Rules and state notifications continue to evolve, so confirm the current position for your states with your legal adviser.
Is group health insurance a statutory benefit in India?
For most private employers, group health insurance is a voluntary benefit, not a legal requirement. Employees covered under ESI already receive medical benefits through the ESI scheme.
Can a company offer benefits above the statutory minimum?
Yes. Statutory benefits are a floor. Many employers add group health insurance, OPD cover, wellness programs and mental health support on top of their legal obligations.
This article is for general information only and is not medical, legal or financial advice. Please consult a qualified professional about your specific situation.