India’s labour and social-security framework is changing rapidly. New digital platforms are making welfare and employment services easier to access, the Labour Codes are changing how wages and benefits are calculated, and labour authorities are increasingly using conciliation to resolve disputes between employers and workers.
For employers, HR professionals and workers, many of these developments involve technical terms such as social security, wage restructuring, retrenchment compensation, notice pay, terminal benefits, actuarial valuation and conciliation. This edition explains these developments in simple language while also highlighting their practical significance.
1. INDIA’S SOCIAL SECURITY COVERAGE EXPANDS TO 100 CRORE
Prime Minister Narendra Modi, in his Independence Day address on 15 August 2026, highlighted that India’s social-security coverage had increased from approximately 25 crore people before 2014 to 100 crore people within a decade. He linked this expansion with the larger goal of ensuring that development and welfare benefits reach the last person.
What does “social security” mean?
In simple terms, social security refers to systems that provide financial or welfare protection when people face situations such as old age, illness, disability, loss of income or other vulnerabilities. It can include pensions, health coverage, insurance and other welfare benefits.
Therefore, an increase in social-security coverage means that a larger number of people are connected with one or more schemes intended to provide such protection.
The Prime Minister also referred to Ayushman Bharat, under which eligible senior citizens aged 70 years and above can receive healthcare support of up to ₹5 lakh. Employment and entrepreneurship were also highlighted through Startup India, Skill India, Digital India and opportunities emerging in aviation, space and the drone ecosystem.
Key developments include:
- Social-security coverage increasing from around 25 crore to 100 crore.
- Healthcare protection being extended to eligible senior citizens aged 70 years and above.
- More than 2.5 lakh registered startups supporting entrepreneurship and employment.
- A ₹1 lakh crore Innovation Fund supporting innovation and research.
- New employment opportunities arising from aviation, space, digital technology and drone-related sectors.
Why does this matter?
The larger change is that social protection is no longer being viewed only as financial support after a problem occurs. It is increasingly connected with healthcare, skills, employability and economic participation.
For workers, this can mean access to a wider safety net. For employers and HR teams, it means understanding that workforce management increasingly overlaps with social-security systems and digital welfare platforms.
2. IMPLEMENTATION OF E-SHRAM PORTAL
The eShram Portal was launched by the Ministry of Labour and Employment on 26 August 2021 to create a national database of unorganised workers, including migrant workers, gig workers and platform workers. More than 31.82 crore workers had registered on the platform by 3 August 2026.
Who is an unorganised worker?
An unorganised worker generally refers to a person working outside conventional formal employment structures where organised payroll, long-term employment benefits or formal social-security arrangements may not always exist.
Examples can include certain self-employed workers, daily-wage workers, migrant workers, domestic workers, gig workers and platform workers, depending on the applicable legal definition.
What is a UAN on eShram?
Workers registered on eShram receive a Universal Account Number (UAN).
In simple terms, this is a unique identification number linked to the worker’s eShram registration. It helps create a consistent identity for accessing or linking welfare services through the platform.
What is the eShram One-Stop-Solution?
The One-Stop-Solution, launched on 21 October 2024, aims to bring multiple government welfare and social-security schemes together on one platform.
Instead of a worker having to independently identify and navigate multiple programmes, eShram is intended to make it easier to see available schemes and benefits through a single digital ecosystem. Fifteen Central schemes had already been integrated or mapped with eShram as of the August 2026 update.
eShram also connects with:
- National Career Service for employment opportunities.
- Skill India Digital Hub for skill development.
- PM-SYM for pension-related access.
- Various welfare and social-security schemes of Central Ministries.
What is Aadhaar-based eKYC?
eKYC means electronic Know Your Customer verification.
In this context, Aadhaar-based eKYC helps verify a worker’s identity electronically. Certain personal details are fetched from UIDAI, helping reduce duplicate or fraudulent registrations.
Workers can register through the portal, mobile application, Common Service Centres, State Sewa Kendras and UMANG.
Why does eShram matter?
The important development is that eShram is evolving from simply being a database into a gateway to welfare services.
A verified national database can help the Government identify eligible workers, connect them with schemes and improve the delivery of social-security benefits.
3. WAGE RESTRUCTURING UNDER THE LABOUR CODES
Wage restructuring is one of the most important areas for employers because the Labour Codes introduce a more uniform definition of “wages” for statutory purposes.
The Ministry of Labour and Employment has clarified that the revised definition of wages has applied from 21 November 2025.
What does “wage restructuring” actually mean?
Wage restructuring does not necessarily mean reducing or increasing an employee’s total salary.
It means reviewing how the total salary is divided into components such as:
- Basic Pay
- Dearness Allowance
- Retaining Allowance
- House Rent Allowance
- Other allowances
- Incentives and other payments
The objective is to ensure that the salary structure complies with the statutory definition of wages.
What counts as wages?
Under the Labour Code framework, the core included components are:
- Basic Pay
- Dearness Allowance
- Retaining Allowance, where applicable.
Dearness Allowance (DA) is an amount paid to help employees offset the impact of rising living costs.
Retaining Allowance is a payment traditionally associated with certain seasonal establishments to retain workers during periods when regular work may not be available.
What is the 50% rule?
This is one of the most important concepts.
Certain salary components can be excluded from the definition of wages. However, if specified excluded components become more than 50% of total remuneration, the amount exceeding the threshold is added back to wages for statutory calculations.
Simple example
Suppose an employee’s monthly remuneration is ₹60,000.
If excluded allowances are ₹38,000, they exceed 50% of ₹60,000, because 50% would be ₹30,000.
The excess ₹8,000 may therefore have to be added back while determining wages for statutory purposes.
This is why employers cannot simply keep the basic component very low and place most of the salary under allowances without considering the statutory wage definition.
Why does the wage figure matter?
The statutory definition of wages can influence calculations connected with employee benefits and liabilities. The Ministry has specifically clarified that gratuity based on the revised wage definition applies from 21 November 2025.
What is gratuity?
Gratuity is a statutory lump-sum benefit payable to an eligible employee on specified events such as retirement, resignation, termination or death, subject to the applicable law and eligibility conditions.
It is generally linked to the employee’s length of service and qualifying wages.
Employers should therefore review:
- Salary components and allowance structures.
- Payroll calculations.
- Gratuity calculations.
- Employment contracts.
- Salary annexures.
- HR and payroll software.
- Internal records supporting salary classifications.
The practical objective should be correct classification and accurate compliance, rather than merely redesigning salary structures to minimise statutory liability.
4. NATIONAL CAREER SERVICE PORTAL
The National Career Service (NCS) Portal is a government-supported digital employment platform connecting jobseekers, employers, career counsellors and training services.
As of 15 July 2026, more than 6.64 crore jobseekers had registered, of whom 2.89 crore were active jobseekers. More than 10.05 crore vacancies had been mobilised since inception, and 17.68 lakh vacancies were active on that date.
What does “vacancies mobilised” mean?
It refers to job openings that have been collected, sourced or brought onto the NCS ecosystem over time.
It does not mean that all 10.05 crore vacancies were still open at the same time.
The figure for vacancies actually active on 15 July 2026 was 17.68 lakh.
What services does NCS provide?
NCS supports:
- Job search and matching.
- Government and private job opportunities.
- Online and offline job fairs.
- Career counselling.
- Vocational guidance.
- Skill-development information.
- Employer access to registered candidates.
How is it useful for employers?
An employer can use such platforms to reach a wider pool of jobseekers and supplement its existing recruitment channels.
For candidates, the benefit is that job opportunities, career guidance and skilling-related information are available through one platform.
5. ₹26.81 CRORE RELIEF FOR BARGARH CEMENT WORKERS
A major industrial dispute arose at Bargarh Cement Works of ACC Limited after the management issued a closure notice dated 19 June 2026, proposing closure of the establishment from 19 August 2026.
Following conciliation proceedings, a Memorandum of Settlement was signed on 27 July 2026, securing a minimum financial package of ₹26.81 crore for at least 61 Shop Floor Associates.
What is a closure notice?
A closure notice is a formal communication relating to an employer’s intention to permanently close an establishment or undertaking.
A closure can significantly affect workers because their employment may come to an end. Labour laws therefore prescribe procedures and obligations that may apply before an establishment is closed, depending on the nature and size of the establishment.
The Ministry’s employer handbook, for example, sets out prior notice or permission requirements for specified industrial establishments under the Industrial Relations Code framework.
What is conciliation?
Conciliation is a formal dispute-resolution process in which a labour authority helps the employer and workers negotiate and attempt to reach an agreed settlement.
The Conciliation Officer does not simply decide the dispute like a judge. The objective is to bring both parties together, identify the issues and help them arrive at an acceptable resolution.
In the Bargarh matter, the proceedings were led by the Deputy Chief Labour Commissioner (Central), Bhubaneswar.
What is a Memorandum of Settlement?
A Memorandum of Settlement records the terms mutually agreed between the parties after negotiations or conciliation.
In simple terms, it is the documented agreement that explains what both sides have agreed to do to resolve the dispute.
What are “service-related entitlements”?
This phrase can cover benefits or rights connected with a worker’s employment and service, depending on the settlement and applicable laws.
It may include matters such as compensation, dues, benefits or other employment-related protections.
The PIB release does not provide a complete item-by-item breakup of the ₹26.81 crore package, so it would be better not to speculate beyond the confirmed financial, welfare and service-related protections.
The significance of the settlement was that:
- A minimum package of ₹26.81 crore was secured.
- At least 61 workers benefited.
- Welfare and service-related rights were addressed.
- A potentially prolonged industrial dispute was resolved through dialogue.
6. STRENGTHENING ACTUARIAL GOVERNANCE AT EPFO
PDUNASS inaugurated a specialised EPFO-ITC-ILO training programme on Actuarial Practices in Social Security on 10 August 2026 in New Delhi.
The programme focused on strengthening EPFO’s internal capability to assess and manage long-term social-security obligations.
What does “actuarial” mean?
An actuary uses mathematics, statistics and financial models to estimate future financial risks and obligations.
For a pension institution, actuarial work helps answer questions such as:
- How much money may be needed to pay future pensions?
- Are present contributions likely to be sufficient?
- How might changes in life expectancy affect future liabilities?
- What financial risks could affect a scheme over the long term?
What is actuarial valuation?
An actuarial valuation is a financial assessment that estimates the present and future obligations of a pension or social-security scheme.
It helps an institution understand whether its expected assets and contributions are adequate to meet future benefit payments.
What is Asset-Liability Management?
Asset-Liability Management, or ALM, means managing available investments and financial resources in relation to future payment obligations.
For example, a pension organisation may receive contributions today but have to pay pensions decades later.
ALM helps ensure that the organisation’s financial assets are managed with those future liabilities in mind.
The programme covered actuarial valuation methods, Asset-Liability Management and global governance practices in social-security institutions.
Why does this matter for EPFO?
EPFO manages retirement savings, pension and insurance-related responsibilities affecting a very large number of workers.
Better actuarial capability can support:
- More reliable financial projections.
- Better understanding of long-term liabilities.
- Improved risk management.
- Evidence-based policy decisions.
- Greater sustainability of social-security schemes.
In simple terms, strong actuarial governance helps ensure that promises made to workers today remain financially manageable in the future.
7. SETTLEMENT BENEFITTING 210 WORKERS AT PAKAL DUL HYDROELECTRIC PROJECT
A labour dispute involving workers engaged by L&T Construction through subcontractors at the Pakal Dul Hydroelectric Project in Jammu & Kashmir was resolved through conciliation by the Regional Labour Commissioner (Central), Jammu.
A settlement was reached on 13 July 2026, and 210 workers received ₹1,12,70,560 in terminal benefits on 30 July 2026.
The payment included:
- Retrenchment compensation.
- Bonus.
- Leave encashment.
- Notice pay.
- Other admissible terminal benefits.
These expressions may be unfamiliar to general readers, so it is useful to understand them individually.
What are terminal benefits?
Terminal benefits are amounts payable to an employee when the employment relationship comes to an end.
The exact benefits depend on the circumstances and applicable law. They can include compensation, unpaid benefits, leave-related payments, notice-related amounts and other legally payable dues.
What is retrenchment?
In simple terms, retrenchment generally refers to termination of a worker’s employment by the employer for reasons other than certain legally excluded situations.
It is different from an employee voluntarily resigning.
When the applicable legal conditions are met, a retrenched worker may be entitled to statutory compensation.
What is retrenchment compensation?
Retrenchment compensation is the statutory amount payable to an eligible worker when the worker is retrenched.
Under the Industrial Relations Code framework described in the Ministry’s employer handbook, retrenchment compensation is generally calculated at 15 days’ average pay for each completed year of continuous service, subject to the applicable provisions and conditions.
What is notice pay?
Notice pay is money paid instead of requiring the employee to work through the applicable notice period.
For example, if the applicable rule requires one month’s notice before ending employment but the worker is relieved immediately, an amount corresponding to that notice period may become payable, depending on the legal and contractual circumstances.
The Ministry’s compliance handbook states that specified retrenchment situations require advance notice, with requirements varying according to the category of industrial establishment.
What is leave encashment?
Employees may accumulate eligible paid leave during their service.
Leave encashment means receiving money for eligible unused leave instead of actually taking that leave.
When employment ends, accumulated leave may become payable if required under the applicable law, policy, award, settlement or employment conditions.
What is bonus?
A bonus is an additional payment over and above normal wages or salary.
Depending on the circumstances, it may arise from statutory requirements, employment terms or other arrangements.
In the Pakal Dul settlement, bonus formed part of the total terminal benefits paid to workers.
What are “other admissible terminal benefits”?
This means other end-of-employment payments to which the workers were legally or contractually entitled in their particular circumstances.
The PIB release does not provide the full breakup, so the expression should be explained generally rather than assigning specific benefits that are not mentioned in the source.
Why was the settlement important?
The settlement did more than end a strike. It ensured that the affected workers received amounts legally due to them and restored industrial peace at the project site.
For employers using contractors and subcontractors, this also highlights the importance of monitoring:
- Worker documentation.
- Statutory payments.
- Contractor compliance.
- Grievance mechanisms.
- Exit and termination payments.
8. PRADHAN MANTRI SHRAM YOGI MAANDHAN (PM-SYM)
PM-SYM is a pension scheme designed for eligible workers in the unorganised sector.
It was launched in February 2019 and provides an assured pension of ₹3,000 per month after the age of 60 to eligible subscribers who fulfil the scheme requirements.
What does “voluntary and contributory pension scheme” mean?
Voluntary means an eligible worker chooses whether to join.
Contributory means the worker must regularly contribute money towards the pension arrangement rather than receiving the benefit without contribution.
Under PM-SYM, the worker contributes a prescribed monthly amount and the Central Government makes an equal matching contribution.
Who can join?
Eligible workers must generally:
- Be between 18 and 40 years of age.
- Have monthly income of ₹15,000 or less.
- Not be covered under the specified EPFO, ESIC or Central Government-contributory NPS arrangements.
- Not be an income-tax assessee.
How much does a worker contribute?
The monthly contribution ranges from ₹55 to ₹200, depending on the worker’s age when joining.
The Government contributes an equal matching amount.
For example, if the prescribed contribution for a particular subscriber is ₹100 per month, the subscriber contributes ₹100 and the Central Government contributes another ₹100, subject to the scheme conditions.
What is a dormant account?
A dormant account is an account that has become inactive because regular required contributions have not continued.
This can happen because of insufficient money in the linked bank account, a change or closure of the account or because the subscriber stops contributing.
The Government has extended the revival period for dormant PM-SYM accounts from one year to three years, making it easier for eligible subscribers to reactivate their participation.
What is the Revival Module?
The Revival Module is a facility intended to help eligible subscribers restore inactive accounts and resume participation, subject to the scheme requirements.
Other measures include:
- Voluntary Exit facility.
- Claim Status feature.
- Account Statement facility.
- Integration with eShram.
- CSC enrolment incentives.
- SMS awareness campaigns.
- Nationwide registration drives.
As of 29 July 2026:
- More than 54 lakh beneficiaries were enrolled.
- 53.1% of participants were women.
- Government matching contributions had reached ₹2,011.01 crore.
Because the scheme was launched in February 2019 and benefits become payable after subscribers attain 60, the Government stated that pension disbursement would not begin before February 2039.
WHAT DO THESE DEVELOPMENTS MEAN?
Across all eight developments, one broad pattern emerges: India’s labour framework is becoming more digital, interconnected and benefit-focused.
For workers, that means more formal channels for accessing pensions, jobs, social-security schemes and statutory dues.
For employers, it means that compliance increasingly involves much more than filing returns. Organisations need to understand:
- How salaries are structured.
- How workers are classified.
- What must be paid when employment ends.
- How contractors are complying with labour obligations.
- How disputes should be handled.
- How social-security platforms interact with the workforce.
The Bargarh and Pakal Dul cases are particularly useful examples. They show that technical labour-law terms ultimately relate to very practical questions: What happens to workers when operations close? What payments are due? Can a strike be resolved through negotiation? Who ensures that statutory benefits are actually paid?
Similarly, concepts such as actuarial governance may sound highly technical, but their underlying purpose is straightforward: to ensure that institutions responsible for pensions and social-security benefits remain financially capable of meeting their future obligations.
KEY TAKEAWAY
The developments covered in this issue reflect a common direction in India’s labour ecosystem: wider social-security coverage, greater digital integration, stronger worker protection, improved institutional capability and greater reliance on structured compliance and dialogue.
For employers and HR professionals, the practical message is equally clear. Wage structures, employee records, statutory benefits, social-security coverage and industrial-relations processes should increasingly be treated as interconnected elements of workforce governance rather than isolated compliance requirements. For workers, digital welfare platforms, employment services, pension schemes and institutional dispute-resolution mechanisms are expanding the channels through which statutory and social-security benefits can be accessed.
Staying informed and periodically reviewing employment practices against the evolving Labour Code framework will therefore remain essential for organisations seeking both compliance and sustainable workforce relations.
This article is intended for general informational and educational purposes and should not be construed as legal advice. Applicability may depend on the facts, industry, establishment and relevant Central or State rules.
