Glossary

60 terms you will meet, in plain English.

A

AggregatorAggregator: A digital intermediary or marketplace that connects a buyer or user of a service with the seller or service provider. Under the Code aggregators contribute 1% to 2% of annual turnover, capped at 5% of what they pay gig and platform workers, to a social security fund for those workers.; Code on Social Security, 2020 (ss. 2(2), 114)
Appropriate GovernmentAppropriate Government: The government with authority to make rules, fix wages and enforce a Code for a given establishment. It is the Central Government for establishments such as railways, mines, oilfields, major ports and central-government bodies, and the State Government for most others.; All four Codes
AS 15 / Ind AS 19Accounting Standard 15 (Revised) / Indian Accounting Standard 19, Employee Benefits: The accounting standards that tell a company how to measure and show gratuity, leave encashment and other employee-benefit liabilities in its accounts, usually on an actuary's valuation. AS 15 is used by companies following Indian GAAP and Ind AS 19 by those following Ind AS; the two sit side by side.; Companies (Accounting Standards) Rules / Companies (Indian Accounting Standards) Rules

B

BOCWBuilding and Other Construction Workers: Workers engaged in construction, repair, maintenance or demolition of buildings, roads, bridges, pipelines, towers and similar works. Safety and working conditions now sit in the OSH Code, while the employer's cess of 1% to 2% of construction cost, which funds worker welfare boards, sits in the Social Security Code.; OSH&WC Code, 2020 and Code on Social Security, 2020 (ss. 100-106)
BonusStatutory bonus: An annual payment due to every employee who earns up to the limit the government sets and has worked at least 30 days in the accounting year. It is paid at a minimum of 8.33% and a maximum of 20% of the wages earned.; Code on Wages, 2019 (s. 26)

C

ChallanPayment challan: The payment slip or receipt generated when an employer deposits a statutory due such as PF, ESI, professional tax or labour welfare fund. Its number is the proof of payment that supports the returns and any later audit.; All statutory payments (PF, ESI, professional tax, labour welfare fund)
ClosureClosure of an industrial establishment: The permanent closing down of a place of employment or part of it. Factories, mines and plantations with 50 to 299 workers must give the government 60 days' notice, while those with 300 or more workers must obtain prior permission, applying 90 days ahead.; Industrial Relations Code, 2020 (s. 2(h), Chapters IX-X)
CLRAContract Labour (Regulation and Abolition) Act, 1970: The older central law that required a principal employer to register, and a contractor to hold a licence, when contract workers were used (20 or more workers). It has been replaced by the contract-labour chapter of the OSH Code, which applies from 50 contract workers.; Replaced by the OSH&WC Code, 2020 (s. 45 onwards)
Compounding of offencesCompounding of offences: Settling a minor offence by paying a prescribed amount instead of being prosecuted, introduced for the first time by the Codes. Under the Code on Wages it is available only for a first offence, and a repeat within five years can mean up to three months' imprisonment, a fine, or both.; All four Codes (Code on Wages, 2019 for the repeat-offence rule)
Contract labourContract labour: A worker hired for or in connection with an establishment's work by or through a contractor, whether or not the principal employer knows. It includes inter-State migrant workers, but not a worker the contractor employs regularly on permanent-type terms with periodic increments and social security.; OSH&WC Code, 2020 (s. 2(m))
ContractorContractor (under the OSH Code): A person who delivers a given result for an establishment through contract labour, or who supplies contract labour as mere human resource; a sub-contractor is included. A contractor employing 50 or more contract workers needs a licence, valid for five years.; OSH&WC Code, 2020 (ss. 2(n), 47, 48)
Core activityCore activity of an establishment: An activity for which the establishment is set up, plus anything essential or necessary to it; cleaning, security, canteen and similar support services are not core unless the establishment exists for them. Contract labour is barred from core activities except where the work is ordinarily done through contractors, does not need full-time workers, or involves a sudden time-bound rise in work.; OSH&WC Code, 2020 (ss. 2(p), 57)

D

DSCDigital Signature Certificate: An electronic signature, usually held on a USB token, issued by a licensed Certifying Authority under the Information Technology Act, 2000. An authorised signatory uses it to sign and file returns and applications on portals such as EPFO, ESIC and MCA.; Information Technology Act, 2000 (used across all filings)

E

ECRElectronic Challan cum Return: The monthly online return an employer files on the EPFO portal, listing each employee's wages and PF, pension and EDLI contributions and generating the payment challan. It is generally due by the 15th of the following month.; EPF Scheme (Code on Social Security, 2020)
EDLIEmployees' Deposit Linked Insurance Scheme: A life-insurance cover for PF members that the employer pays for entirely; the member contributes nothing. If a member dies while in service, the nominee receives a lump sum linked to the member's recent wages and PF balance.; EPF Scheme (Code on Social Security, 2020, ss. 15-16)
EmployeeEmployee (under the Code on Wages): Anyone, other than an apprentice, employed on wages by an establishment for skilled, semi-skilled, unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work. It is wider than 'worker' and covers managers and office staff, so minimum wages and timely payment apply to all employees.; Code on Wages, 2019 (s. 2(k))
Employees' CompensationEmployees' Compensation: Compensation an employer pays when an employee is injured or dies in an accident arising out of and in the course of employment, including the journey between home and the workplace. Where the dependants are minors, the amount is deposited with the competent authority.; Code on Social Security, 2020 (ss. 74, 81)
EPFEmployees' Provident Fund: A retirement-savings fund to which the employer and the employee each add a share of the employee's wages every month. It covers establishments with 20 or more employees; the Code's default rate is 10% of wages, with 12% for establishments the Central Government notifies, which is the rate still applied in practice.; EPF Scheme (Code on Social Security, 2020, Chapter III)
EPFOEmployees' Provident Fund Organisation: The central government body that runs the provident fund, pension and deposit-linked insurance schemes. It issues UANs and runs the employer portal where ECRs are filed and member claims are settled.; Code on Social Security, 2020 (Chapter III)
EPSEmployees' Pension Scheme: The pension part of the PF system, paid out of part of the employer's contribution (up to 8.33% of wages). It gives a monthly pension on retirement or permanent disablement, and pensions to a widow, widower, children or nominee after a member's death.; EPF Scheme (Code on Social Security, 2020, ss. 15-16)
ESICEmployees' State Insurance Corporation (the ESI scheme): The body that runs ESI, a health and cash-benefit insurance scheme for employees earning up to the notified wage limit (Rs 21,000 a month at present). Employer and employee both pay contributions, and the employee and family get medical care plus cash benefits for sickness, maternity, disablement and dependants' benefit.; ESIC (Code on Social Security, 2020, Chapter IV)
EstablishmentEstablishment (under the OSH Code): A place where an industry, trade, business, manufacture or occupation is carried on with 10 or more workers, with the same threshold for motor transport, newspaper, audio-visual, construction and plantation work; mines and docks are included. It must register once, online, within 60 days of coming into existence.; OSH&WC Code, 2020 (ss. 2(v), 3)

F

Fixed-term employmentFixed-term employment: Direct engagement of an employee on a written contract for a fixed period, with hours, wages and benefits no less than a permanent employee doing similar work. Statutory benefits apply proportionately, and gratuity is payable after one year of service; ending the contract on expiry is not retrenchment.; Industrial Relations Code, 2020 (s. 2(o)) and Code on Social Security, 2020 (ss. 2(34), 53)
Floor wageFloor wage: A national baseline wage, which can differ by region, fixed by the Central Government with minimum living standards in mind. State minimum wages cannot be set below it, and a State's earlier higher minimum cannot be reduced to it.; Code on Wages, 2019 (s. 9)
Form 11EPF Composite Declaration Form (Form 11): A self-declaration a new employee fills in when joining a PF-covered establishment, giving personal details, UAN and any previous PF and pension membership. It lets the new employer link and transfer the earlier PF accounts.; EPF Scheme (Code on Social Security, 2020)
Form 5AReturn of Ownership (EPF Scheme, Form 5A): A return an establishment files with the EPFO under Para 36A of the EPF Scheme, naming its owners, partners or directors, its branches and its EPF code. It has to be updated when ownership or the board changes, and it is not the form used to report new employees.; EPF Scheme (Code on Social Security, 2020)

G

Gig workerGig worker: A person who performs work or takes part in a work arrangement and earns from it outside a traditional employer-employee relationship. Gig workers register to receive benefits under schemes the government notifies.; Code on Social Security, 2020 (ss. 2(35), 113)
GratuityGratuity: A lump sum an employer pays on leaving after five years of continuous service (retirement, resignation, death or disablement), at 15 days' last-drawn wages for each completed year, with a ceiling of Rs 20 lakh at present. The five-year rule does not apply on death, disablement or fixed-term expiry, and payment is due within 30 days.; Code on Social Security, 2020 (ss. 53-56)
Grievance Redressal CommitteeGrievance Redressal Committee (GRC): A committee every industrial establishment with 20 or more workers must set up for individual worker grievances, with equal employer and worker representatives and at most 10 members. A worker can apply within one year of the cause of action, and the committee must finish within 30 days.; Industrial Relations Code, 2020 (s. 4)
Group gratuity policyGroup gratuity policy (insurer-funded gratuity scheme): A group insurance contract in which the employer, as master policyholder, funds its gratuity liability with an insurer such as LIC (for example LIC's New Group Gratuity Cash Accumulation Plan). The employer's contributions sit in a group account, benefits are paid under the employer's scheme rules when employees leave, and the policy renews every year.; Gratuity funding under the Code on Social Security, 2020

I

Improvement noticeImprovement notice: A notice an Inspector-cum-Facilitator issues after an inspection, pointing out what the employer must put right under the OSH Code and Rules. Under the 2026 central rules it is issued in Form XXV, giving the employer a chance to comply before any penal action.; OSH&WC Code, 2020 (Central Rules, 2026, rule 78)
Industrial disputeIndustrial dispute: Any dispute or difference between employers and employers, employers and workers, or workers and workers, connected with employment or non-employment, terms of employment or conditions of labour. It also covers an individual worker's dispute over discharge, dismissal, retrenchment or termination.; Industrial Relations Code, 2020 (s. 2(q))
Inspector-cum-FacilitatorInspector-cum-Facilitator: The officer, replacing the old Inspector, who both checks compliance and helps employers and workers understand the law. Inspections can be randomised and web-based, and after an inspection the officer can issue an improvement notice.; All four Codes (Code on Wages s. 51; OSH&WC Code s. 2(ze))
Inter-State migrant workerInter-State migrant worker (ISMW): A worker recruited in one State, directly or through a contractor, to work in an establishment in another State, or who has come on their own and found work there. Where an establishment employs 10 or more such workers, the employer must pay a lump-sum journey allowance once a year for travel to and from the native place.; OSH&WC Code, 2020 (ss. 2(zf), 59-61)
IP numberInsured Person number (the 2026 central rules call it the insurance number): The number ESIC gives each employee covered by ESI; the employer uses it to file contributions and the employee uses it to claim benefits. Under the Social Security (Central) Rules, 2026 it is allotted automatically when the employer registers the employee on the portal, and it lapses if the employee's details are not updated within 30 days.; ESIC (Code on Social Security, 2020, Chapter IV)

K

KYCKnow Your Customer: For PF, the linking of a member's identity and bank details (Aadhaar, PAN, bank account) to their UAN and its approval by the employer or EPFO. A member with complete KYC can claim, transfer or withdraw PF online.; EPF Scheme (Code on Social Security, 2020)

L

Labour CodesThe four Labour Codes: Four laws that consolidate 29 central labour Acts: the Code on Wages, the Industrial Relations Code, the Code on Social Security, and the Occupational Safety, Health and Working Conditions Code. They came into effect on 21 November 2025, with central rules notified in 2026.; Code on Wages, 2019; IR Code, 2020; Code on Social Security, 2020; OSH&WC Code, 2020
Lay-offLay-off: An employer's failure or inability, because of shortage of coal, power or raw materials, accumulated stock, machinery breakdown, natural calamity or a similar reason, to give work to a muster-roll worker who has not been retrenched. A worker not given work within two hours of reporting is treated as laid off for that day, and is paid compensation of 50% of basic wages plus dearness allowance.; Industrial Relations Code, 2020 (s. 2(t), Chapters IX-X)
Lock-outLock-out: The temporary closing of a place of employment, suspension of work, or an employer's refusal to continue employing any number of workers. An employer who issues a lock-out notice must report it to the government and the Conciliation Officer within five days.; Industrial Relations Code, 2020 (ss. 2(u), 62)

M

Maternity benefitMaternity benefit: Paid leave for a woman employee who has worked at least 80 days in the preceding 12 months: 26 weeks, plus a medical bonus of Rs 3,500, nursing breaks after she returns and a crèche in establishments with 50 or more employees. Shorter periods apply for miscarriage, medical termination of pregnancy and tubectomy.; Code on Social Security, 2020 (Chapter VI)
Minimum wagesMinimum rate of wages: The lowest wage an employer may legally pay, fixed by the appropriate Government for time work or piece work and applying to all employees, not only those in scheduled employments. It is to be reviewed or revised ordinarily at intervals not exceeding five years.; Code on Wages, 2019 (ss. 5, 6, 8)
MLWFMaharashtra Labour Welfare Fund: A State fund for worker welfare to which the employer and the employee each make a small contribution twice a year, collected by the Maharashtra Labour Welfare Board. It is a State law and is not one of the four Labour Codes.; Maharashtra Labour Welfare Fund Act, 1953 (State law)

N

Negotiating union / negotiating councilSole negotiating union or negotiating council: The body the employer must recognise for collective bargaining: the only registered union, or the union backed by 51% or more of muster-roll workers. If none has 51%, a council of unions with at least 20% support each is formed, valid for three years and extendable to five.; Industrial Relations Code, 2020 (s. 14)

O

OvertimeOvertime: Work beyond the normal limit of eight hours a day or 48 hours a week, which must be paid at no less than twice the normal rate of wages. The wages are paid at the end of each wage period.; Code on Wages, 2019 (s. 14) and OSH&WC Code, 2020

P

Platform workerPlatform worker: A person engaged in platform work, meaning work arranged through an online platform where organisations or individuals reach others to solve problems or provide services for payment. Like gig workers, platform workers register to receive scheme benefits.; Code on Social Security, 2020 (ss. 2(60), 2(61), 113)
Principal employerPrincipal employer (of contract labour): The person who supervises and controls the establishment that uses contract labour: the owner or occupier of a factory, the owner or agent of a mine, and otherwise whoever controls the establishment. The principal employer must give contract workers the prescribed welfare facilities and must pay their wages if the contractor fails to.; OSH&WC Code, 2020 (ss. 2(zz), 53, 55)
PTECProfessional Tax Enrolment Certificate: The enrolment a business, proprietor, partner, director or self-employed professional takes to pay professional tax on their own account. A firm with no employees generally needs only a PTEC; one that also pays salaries needs a PTRC as well.; Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975 (State law)
PTRCProfessional Tax Registration Certificate: The registration a Maharashtra employer takes to deduct professional tax from employees' salaries, pay it to the State and file the returns. It is separate from the PTEC, which covers the tax on the business owner's own account.; Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975 (State law)

R

RetrenchmentRetrenchment: Termination of a worker's service for any reason other than disciplinary punishment, excluding voluntary retirement, retirement on superannuation, non-renewal or completion of a fixed term, and continued ill-health. It needs notice, compensation of 15 days' average pay for each completed year of service, and an employer contribution to the Worker Re-Skilling Fund.; Industrial Relations Code, 2020 (s. 2(zh), Chapters IX-X)

S

S&E licenceShops and Establishments registration (licence): The registration a shop, office, hotel or similar commercial establishment in Maharashtra holds under the Shops and Establishments Act, which governs working hours, weekly offs, leave and similar conditions. Establishments with 10 or more workers register; smaller ones generally only notify the Facilitator.; Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 (State law)
Shram Suvidha PortalShram Suvidha Portal (Ministry of Labour and Employment): The Ministry's online portal for labour-law filings. Under the 2026 central rules an establishment applies there for its single registration, a contractor applies there for a licence, and the principal employer files the contract-labour annual return there.; OSH&WC Code, 2020 (Central Rules, 2026)
Standing ordersStanding orders: Written rules on matters such as shift timings, attendance, leave, discipline and termination, certified by a Certifying Officer. Under the IR Code they apply to industrial establishments with 300 or more workers, who may adopt the central Model Standing Orders and simply inform the Certifying Officer.; Industrial Relations Code, 2020 (ss. 2(zj), 28-30)
StrikeStrike: A cessation of work, or concerted refusal to work, by a body of persons acting together, including concerted casual leave by 50% or more of the workers on a day. Workers must give prior notice, cannot strike within 14 days of giving it, and need no government permission.; Industrial Relations Code, 2020 (ss. 2(zk), 62)

U

UANUniversal Account Number: A 12-digit number the EPFO gives every PF member, which stays the same for life whichever employer they work for. All of a person's PF accounts attach to it, so balances can be tracked and moved between jobs.; EPF Scheme (Code on Social Security, 2020)

W

Wage ceilingMonthly wage limit for PF and ESI coverage: The monthly wage up to which an employee is compulsorily covered by PF or ESI. The ESI limit is Rs 21,000; the PF ceiling was raised from Rs 15,000 to Rs 25,000 with effect from 17 September 2026.; EPF Scheme and ESIC (Code on Social Security, 2020)
Wage periodWage period: The interval for which wages are paid: daily, weekly, fortnightly or monthly. Monthly wages are due by the 7th day of the next month, and wages owed on leaving must be paid within two working days.; Code on Wages, 2019 (ss. 6, 17)
Wages (Code on Wages)Wages as defined in section 2(y) of the Code on Wages, 2019: All remuneration for employment, whether salary, allowances or otherwise, including basic pay, dearness allowance and retaining allowance, but excluding items such as house rent allowance, conveyance, overtime, commission, bonus and the employer's PF share. If those excluded payments together exceed 50% of total remuneration, the excess is added back to wages; this one definition applies across all four Codes from 21 November 2025.; Code on Wages, 2019 (s. 2(y)); applied across all four Codes
WorkerWorker (under the IR and OSH Codes): A person employed to do manual, skilled, technical, operational, clerical or supervisory work for hire or reward, including working journalists and sales promotion employees. It excludes managerial and administrative staff and supervisors drawing more than Rs 18,000 a month (or a notified amount).; Industrial Relations Code, 2020 and OSH&WC Code, 2020
Worker Re-Skilling FundWorker Re-Skilling Fund: A fund the government sets up to which the employer pays 15 days' last-drawn wages for every retrenched worker. The same amount is credited to the retrenched worker's account within 45 days to pay for re-skilling.; Industrial Relations Code, 2020 (s. 83)
Works CommitteeWorks Committee: A joint committee of employer and worker representatives, with workers' representatives at least equal in number to the employer's. The government may require an industrial establishment that has employed 100 or more workers in the preceding 12 months to set one up to promote harmonious relations.; Industrial Relations Code, 2020 (s. 3)