Madhya Pradesh Labour Law Compliance Guide for Employers, 2026 Edition

The four Labour Codes came into force on 21 November 2025. The Code on Wages absorbed the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. The Code on Social Security took in the EPF & MP Act, 1952, the ESI Act, 1948, the Payment of Gratuity Act, 1972, and the Maternity Benefit Act, 1961. The Industrial Relations Code absorbed the Industrial Disputes Act, 1947, and the Standing Orders Act, 1946. The Occupational Safety, Health and Working Conditions Code took in the Factories Act, 1948, and the Contract Labour Act, 1970.

The provision with the widest payroll effect is the definition of wages in Section 2(y) of the Code on Wages. Basic pay, dearness allowance, and retaining allowance together must be at least 50% of total remuneration. That's three components measured against total remuneration, not basic pay measured against CTC. The difference matters when you restructure a salary, because it moves the base for provident fund, gratuity, and bonus.

1. Madhya Pradesh Professional Tax

Professional Tax is levied under the Madhya Pradesh Vritti Kar Adhiniyam, 1995, and the Vritti Kar Niyam of the same year.

Note the uneven final month. The annual figure doesn't divide cleanly by twelve, so the last month of the year carries the remainder. A payroll that simply divides by twelve will be a few rupees short every year, which is small but is exactly the kind of thing an inspection picks up.

Remittance is monthly, by the 10th. Returns are quarterly, on Form 7.

2. Madhya Pradesh Labour Welfare Fund

The fund runs under the Madhya Pradesh Shram Kalyan Nidhi Adhiniyam, 1982, and its 1984 Rules.

Deduction is taken against the register at 30 June and 31 December, and remitted by 15 July and 15 January. These rates were revised by an amendment notification dated 28 January 2025, so figures published before that date are out of step.

People employed in a managerial or supervisory capacity drawing above ₹10,000 a month are outside the Act.

3. Madhya Pradesh Shops and Establishments Act

Registration under the Madhya Pradesh Shops and Establishments Act, 1958 is due within 30 days of the Act applying to the establishment.

Privilege leave is written as a period, not a count. The Act grants one month after twelve months of continuous employment, accumulating to three months. Converting that into a fixed number of days is where policies go wrong, because the answer depends on how your establishment defines a month. Casual leave can't be combined with privilege leave, so a policy that lets staff bolt the two together to make a longer break doesn't comply.

Women on night shifts: under Section 43 of the Occupational Safety, Health and Working Conditions Code, 2020, a woman may be employed in all establishments for all types of work and, with her consent, before 6 a.m. and after 7 p.m., subject to conditions the appropriate government prescribes. Madhya Pradesh's specific conditions aren't confirmed. Apply the standard safeguards on transport, batch size, security, and grievance handling, and check the state notification before rostering.

4. Madhya Pradesh Minimum Wages

Madhya Pradesh revised minimum rates effective 1 October 2026 (valid to 31 March 2027). Rates apply uniformly across the state rather than by zone, and are published as a basic component plus variable dearness allowance.

The variable dearness allowance is the same flat amount at every skill level, which is unusual, and it's the component that moves at each revision. Madhya Pradesh revises twice a year, so treat the total as current only until the next notification.

Central Laws Applicable in Madhya Pradesh

• Provident Fund: 12% employee and 12% employer on basic pay and dearness allowance, split 3.67% to EPF and 8.33% to EPS, plus administrative charges and EDLI. The ECR is due by the 15th of the following month.
• ESIC: 0.75% employee and 3.25% employer, within the wage ceiling, due by the 15th of the following month.
• Bonus: 8.33% to 20%, payable within 8 months of the financial year end.
• Gratuity: after 5 years of continuous service. The one-year rule applies to fixed-term employment, not permanent staff.
• Maternity benefit: 26 weeks for the first two children, 12 weeks thereafter.

Minimum wages don't vary by zone in Madhya Pradesh, so an Indore employer and a Jabalpur employer apply the same table. That removes one common source of error but leaves the other two firmly in place: the annual Professional Tax bands, and a Labour Welfare Fund that starts at the first employee. A two-person representative office in Bhopal is in scope for both.

Is Professional Tax applicable in Madhya Pradesh?

Yes, and the bands are set against annual salary. Nil up to ₹2,25,000 a year, then ₹1,500, ₹2,000, and ₹2,500 a year in rising bands. Remittance is monthly by the 10th, and returns are quarterly on Form 7.

What is the Labour Welfare Fund contribution in Madhya Pradesh?

₹10 from the employee and ₹50 from the employer, ₹60 in total per employee, half-yearly. There's no headcount threshold, so it applies from the first employee.

How much privilege leave applies in Madhya Pradesh?

One month after every 12 months of continuous employment, accumulating to three months. Casual leave is 14 days and can't be combined with privilege leave.

What are the working hours in Madhya Pradesh?

Nine hours a day and 48 hours a week, with overtime at twice the ordinary rate and one weekly holiday.

What are the minimum wages in Madhya Pradesh?

From 1 October 2026: ₹12,575 a month for unskilled workers, ₹13,571 for semi-skilled, ₹15,294 for skilled, and ₹16,919 for highly skilled. Rates apply uniformly across the state.

How is Madhya Pradesh compliance handled?

The monthly Professional Tax deduction on the correct annual band, the quarterly Form 7 return, the half-yearly Labour Welfare Fund remittance, Shops Act registration, PF and ESIC filings, and the minimum wage check against the salary structure at each revision.