The Ministry of Labour & Employment has notified three new social security schemes under the Code on Social Security, 2020, with effect from 29 June 2026.

Client Compliance Advisory | August 2026

The Ministry of Labour & Employment has notified three new social security schemes under the Code on Social Security, 2020, with effect from 29 June 2026. These schemes replace the earlier provident fund, pension and deposit-linked insurance schemes and introduce a more consolidated, digital and compliance-focused framework for employers and employees.

The three new schemes are:

Existing EPF members continue under the new framework, and their accumulated PF balances, memberships and accrued rights are carried forward. The transition is therefore primarily a legal and administrative modernisation rather than a reset of existing PF benefits.

1. PF CONTRIBUTION STRUCTURE – ₹15,000 WAGE CEILING AND HIGHER-WAGE CONTRIBUTIONS

The basic contribution rate remains 12% for the employee and 12% for the employer, subject to the applicable statutory provisions.

The currently notified statutory wage ceiling remains ₹15,000 per month. For employees whose wages exceed this ceiling, the new framework formally clarifies the distinction between mandatory contributions up to the ceiling and contributions on higher wages.

Accordingly:

• Statutory PF contribution is calculated up to the notified wage ceiling.
• For wages above ₹15,000, higher PF contribution can continue where the employer and employee jointly opt for such contribution.
• An employee may also voluntarily contribute more than the statutory ceiling without creating a corresponding obligation on the employer to match the excess, unless another applicable obligation requires it.
• Employers should therefore review whether their existing payroll policy provides for PF on actual basic wages or restricts the contribution to the statutory ceiling.

Practical implication for employers

Employers should not automatically reduce existing PF contributions to ₹1,800 per month merely because the new scheme has been introduced.

Where an organisation currently contributes PF on actual basic wages exceeding ₹15,000, it should first review:

1. Existing employment terms and appointment letters;
2. Company PF policy;
3. Existing employee/employer practice;
4. Any applicable settlement or agreement;
5. Existing higher-wage contribution arrangements; and
6. The documentation required for continuing higher-wage contributions.

The new framework makes higher-wage contribution arrangements more explicit and should be incorporated into the organisation's payroll governance and documentation process.

Recommended action: Complete a payroll impact assessment before finalising the July 2026 wage-month contribution and subsequent ECR filings.

2. ELECTRONIC RECORD-KEEPING AND REPORTING

The 2026 framework significantly strengthens electronic compliance.

Employers are required to maintain prescribed employee and contribution records electronically and submit prescribed returns through the designated electronic system. Monthly electronic returns are required within the prescribed timeline, including reporting of employees who become eligible for EPF membership.

Recommended action

Organisations should conduct an EPF digital compliance audit covering:

• Employee master data;
• UAN and Aadhaar/KYC records;
• Date of joining and exit;
• Wage and contribution records;
• ECR filings;
• Contractor/contract labour records;
• International Worker records, where applicable;
• Nomination details;
• Electronic employee statements and access;
• PF reconciliation between payroll, ECR and accounting records.

Any manual or fragmented process should be identified and progressively migrated to a controlled electronic workflow.

3. ADDITIONAL RESPONSIBILITIES FOR EXEMPTED PF TRUSTS

Organisations operating exempted PF trusts should pay particular attention to the enhanced governance and compliance requirements.

The new framework places greater emphasis on:

• Electronic maintenance and reporting;
• Proper accounting and member records;
• Investment compliance;
• Audit and governance;
• Timely reporting and reconciliation; and
• Continued compliance with exemption conditions.

In addition, the Government has introduced an AMNESTY Scheme, 2026 providing certain establishments operating PF trusts without formal EPFO exemption approval an opportunity to regularise their status, subject to prescribed conditions. The scheme is available for six months from notification.

Recommended action: Exempted establishments should immediately review their exemption status, trust documentation, investment compliance, member balances, accounting records and audit position.

4. INTERNATIONAL WORKERS – UPDATED COMPLIANCE REQUIREMENTS

The new EPF framework continues to provide specific provisions for International Workers (IWs).

Employers should review their expatriate and cross-border employee population to determine whether any employees qualify as International Workers and whether an exemption under an applicable Social Security Agreement is available.

Employers are also required to electronically maintain and report relevant International Worker information, including nationality, wages, contributions, membership status and exit details.

Recommended action: Conduct an International Worker compliance review wherever the organisation employs foreign nationals or employees covered by applicable Social Security Agreements.

5. PRINCIPAL EMPLOYER AND CONTRACT LABOUR COMPLIANCE

The new framework also strengthens the compliance responsibilities of principal employers in relation to contract workers.

Where applicable, principal employers and contractors have specific reporting and information-sharing obligations relating to contractual employees, including details such as UAN, wages and contributions.

This makes contract labour PF reconciliation an important area for HR, payroll, finance and procurement teams.

Recommended action: Employers should reconcile:

Contractor manpower → Attendance → Wage sheet → PF contribution → ECR → Payment → Contractor invoice

on a monthly basis.

6. CLAIM SETTLEMENT TIMELINE

The existing principle that PF claims are required to be processed within 20 days continues to be reflected in the EPFO framework.

For employers, this reinforces the importance of maintaining accurate employee records, KYC, nomination and exit information so that employee claims are not delayed because of incomplete or inconsistent employer-side data.

Recommended action: HR teams should establish a periodic review mechanism for:

• UAN/KYC status;
• Bank account details;
• Nomination;
• Date of joining;
• Date of exit;
• PF transfer records; and
• Pending employee corrections.

7. EMPLOYEE NOMINATION – AN IMPORTANT HR ACTION POINT

One of the important areas requiring HR attention under the new framework is PF nomination.

Organisations should review existing employee nomination records and communicate the need for employees to ensure that their nominations are valid and updated in accordance with the new framework.

This is particularly important following events such as:

• Marriage;
• Birth/adoption of children;
• Change in family circumstances; or
• Death of a nominee.

Recommended action: Consider conducting an organisation-wide PF Nomination Update Drive through the employee self-service/UAN platform.

8. NEW WITHDRAWAL FRAMEWORK

The 2026 framework also rationalises PF withdrawal provisions.

Partial withdrawals continue to be available for specified purposes, subject to prescribed conditions. The new framework provides for partial withdrawal after the required membership period while requiring a minimum balance to remain in the account. Complete withdrawal is also subject to specified circumstances and waiting requirements.

Accordingly, employees should not assume that all historical withdrawal conditions remain identical under the new framework.

Employers should update employee FAQs, HR helpdesk material and onboarding/separation communication accordingly.

KEY ACTION PLAN FOR EMPLOYERS

We recommend that organisations undertake the following actions during the transition:

Immediate – Payroll & Compliance

1. Review PF contribution methodology

Confirm whether PF is being calculated on:

• Statutory wage ceiling; or
• Actual eligible wages above the ceiling.

Document the basis and obtain the required consent/option where applicable.

2. Validate July 2026 payroll

Reconcile employee contribution, employer contribution, EPS and EDLI components before completing the relevant ECR/payment cycle.

3. Review employee master data

Verify UAN, Aadhaar/KYC, bank account, date of joining, date of exit and nomination records.

Within 30–60 Days

4. Conduct an EPF compliance audit

Review payroll, ECR, contribution, accounting and employee records.

5. Review contractor compliance

Reconcile contractor manpower and PF contributions with payroll/ECR records.

6. Review International Worker compliance

Identify applicable employees and verify Social Security Agreement/exemption requirements.

7. Review PF trust compliance

For exempted establishments, verify exemption status, audit, investments, member records and statutory reporting.

Strategic HR Action

8. Review CTC and salary structures

Assess whether the organisation's PF policy and salary structure remain aligned with the new contribution framework.

9. Update HR policies and SOPs

Revise:

• PF Policy;
• Payroll SOP;
• Joining documentation;
• Exit/separation checklist;
• Employee nomination process;
• Contractor compliance SOP; and
• Employee communication material.

IMPORTANT COMPLIANCE NOTE

The introduction of the EPF Scheme, 2026 does not mean that every employer must automatically shift all employees to a ₹15,000 PF wage base.

The statutory wage ceiling remains ₹15,000, but the new framework expressly addresses contributions above that ceiling and permits higher-wage contribution arrangements subject to the applicable requirements and documentation. Employers should therefore assess their existing contractual and payroll practices before making any unilateral change.

Similarly, the 2026 framework should not be viewed solely as a change in PF deduction. It introduces wider requirements covering digital records, reporting, contract labour, International Workers, nominations, withdrawals and exempted PF trusts.

CONCLUSION

The new provident fund framework represents a significant step toward a more integrated, digital and accountable social-security system in India.

For employers, the immediate priority should be to ensure that payroll, HR, finance, PF administration and contractor-management processes are aligned with the 2026 framework.

We recommend that organisations complete a structured PF compliance review covering contribution methodology, employee records, ECR filings, nominations, contract labour, International Workers and, where applicable, exempted PF trusts.

We will continue to monitor further notifications, EPFO circulars, FAQs and clarifications issued under the new framework and recommend that organisations review their processes as further operational guidance becomes available.

For any clarification or assistance in assessing the impact of the 2026 PF framework on your organisation, please feel free to contact the undersigned.

Disclaimer: This advisory is intended for general compliance awareness and should be read together with the applicable Gazette notifications, EPFO directions and organisation-specific facts. Employers should obtain professional advice before making material changes to their existing PF contribution or contractual arrangements.