- October 5, 2026
- Posted by: Consultation Expert
- Category: Blog_posts, Labour Law Consultants, New Labour Code
Under the new labour code, compliance duties switch on at set headcounts. In short: 10 workers brings an establishment under the OSH Code and ESIC, 20 brings in EPF, factory status for units using power and a Grievance Redressal Committee, 50 brings in contract labour licensing and a crèche, 100 brings in a canteen and Works Committee, 250 brings in a welfare officer, and 300 brings in standing orders and government permission for lay-off, retrenchment and closure. The full picture depends on whether you run a factory, an office, a shop or a construction site, and on how you count contract labour.
This guide from Gupta & Company Consultants (G&CC) lists each threshold, the law behind it and what the employer has to do.
Table of Contents
Headcount thresholds at a glance
| Headcount | What applies | Law |
|---|---|---|
| 10 or more workers | Establishment registration, appointment letters and other employer duties | OSH Code, 2020 |
| 10 or more employees | ESIC coverage (in notified areas) | Code on Social Security, 2020 |
| 20 or more employees | EPF coverage | Code on Social Security, 2020 |
| 20 or more workers (with power) / 40 or more (without power) | Factory status and factory licence | OSH Code, 2020 |
| 20 or more workers | Grievance Redressal Committee | Industrial Relations Code, 2020 |
| 50 or more contract workers | Contract labour provisions and contractor licensing | OSH Code, 2020 |
| More than 50 workers | Crèche facility and rest rooms | OSH Code, 2020 |
| 100 or more workers | Canteen (contract labour counted) and Works Committee | OSH Code / IR Code |
| 250 or more workers | Welfare officer (factories, mines, plantations) | OSH Code, 2020 |
| 300 or more workers | Standing orders; prior permission for lay-off, retrenchment and closure | Industrial Relations Code, 2020 |
State governments can modify some of these figures through notification, so confirm the number that applies in your state.
10 workers: OSH Code registration and ESIC
The OSH Code applies to establishments carrying on any industry, trade, business or occupation with 10 or more workers, and to mines and docks with any number. Such establishments must register under the code and issue appointment letters to every employee under Section 6.
ESIC coverage generally starts at 10 employees in areas where the ESI scheme is notified. Our labour laws registration service handles OSH and ESIC registrations together.
20 workers: EPF, factory status and grievance committee
EPF applies once an establishment has 20 or more employees. From 17 September 2026, the wage ceiling for mandatory EPF coverage went up from ₹15,000 to ₹25,000 a month, so employees earning in that band now come under compulsory PF. Payroll configurations need updating for this. Our PF and ESIC compliance team can make the change.
A unit using power becomes a “factory” at 20 workers, and a unit without power at 40 workers. Under the old Factories Act the limits were 10 and 20, so some smaller units have moved out of factory status, though they still fall under the OSH Code as establishments. See our factory compliance page for licence and register work.
An industrial establishment with 20 or more workers must also set up a Grievance Redressal Committee with equal employer and worker representation, up to 10 members, and women represented at least in proportion to their share of the workforce.
50 workers: contract labour and crèche
Contract labour provisions under the OSH Code apply to establishments that employed 50 or more contract workers on any day in the previous 12 months, and to contractors with 50 or more. The old Contract Labour Act triggered at 20. A principal employer still remains liable for unpaid wages of contract workers, so the higher threshold does not remove the need to monitor contractors. Our contract labour compliance service covers licences, contractor audits and wage verification.
A crèche is required where more than 50 workers are employed. Under the old law the trigger was 30 women workers, so the new rule counts all workers regardless of gender.
100 workers: canteen and Works Committee
A canteen is required where 100 or more workers are employed, and contract labour counts towards this number. An industrial establishment with 100 or more workers must also constitute a Works Committee under the IR Code.
250 workers: welfare officer
Factories, mines and plantations with 250 or more workers must appoint a welfare officer. Construction establishments and factories with hazardous processes have separate safety officer requirements under the code and state rules.
300 workers: standing orders and retrenchment permission
Industrial establishments with 300 or more workers need standing orders under Sections 28 to 30 of the IR Code. The earlier limit was 100. Employers can adopt Model Standing Orders notified by the Central Government. The same 300 figure applies for prior government permission before lay-off, retrenchment or closure. G&CC provides standing order consultant services for drafting and certification.
How to count your headcount correctly
- Count per establishment, not per company. A company with a 120-worker plant and a 30-person office has two establishments with different duties.
- Include contract workers where the law says so, such as the canteen threshold.
- For contract labour, the test is the highest number on any day in the previous 12 months, not the monthly average.
- Recheck after seasonal hiring. Crossing a threshold for a short period can still trigger a duty.
Our compliance audit and consultation service counts heads site by site and lists the duties for each.
How G&CC helps
Gupta & Company Consultants has handled registrations, licences and monthly statutory compliance for employers since 2004. Our labour law consultants work with factories, IT companies, hospitals, construction firms and automobile suppliers across India. If your sites are in Haryana and you want a labour law consultant in Gurgaon, our Sector 33 branch handles licences and inspections locally. For licences under multiple laws, see our labour laws licensing service.
Frequently Asked Questions
At how many employees does PF become mandatory?
EPF applies to establishments with 20 or more employees. From 17 September 2026, the wage ceiling for mandatory coverage is ₹25,000 a month.
At how many employees does ESIC apply?
ESIC generally applies to establishments with 10 or more employees in areas where the ESI scheme is notified.
What is the contract labour threshold under the new labour code?
The contract labour provisions apply to establishments and contractors with 50 or more contract workers on any day in the previous 12 months. It was 20 under the old Contract Labour Act.
When does a company need standing orders?
Industrial establishments with 300 or more workers need standing orders under the Industrial Relations Code. The earlier threshold was 100.
Is a Grievance Redressal Committee required for small companies?
It is required in industrial establishments employing 20 or more workers. Below that number it is not mandatory.
Talk to Gupta & Company Consultants
Not sure which thresholds your sites cross under the new labour code? Contact our team for a headcount-based compliance review.
Head Office: B2B/3, Janakpuri, New Delhi-110058
Phone: +91-8744079902
Email: contact@guptaconsultants.com