Section 8 Company Staff Now Covered under Labour Law Mandates

In a landmark move to extend social and legal protections to the workforce of charitable organizations, the Government of India has brought employees of Section 8 companies under the purview of key labour law mandates. This policy shift ensures that staff members of non-profit companies registered under the Companies Act, 2013, are now entitled to the same rights and benefits as employees in other formal sectors.

The new directive, issued jointly by the Ministry of Corporate Affairs (MCA) and the Ministry of Labour and Employment, confirms that all Section 8 companies must comply with central labour laws, including the Employees’ Provident Fund (EPF) Act, Employees’ State Insurance (ESI) Act, Minimum Wages Act, Payment of Gratuity Act, and the Maternity Benefit Act, among others. This move legally affirms the status of staff—such as teachers, healthcare workers, field agents, and administrators—employed by non-profit entities, regardless of whether the organizations are profit-generating or grant-funded.

Section 8 companies employing ten or more workers must now register with the relevant labour authorities and ensure timely contributions to provident fund and insurance schemes. They must also maintain wage records, provide safe working conditions, and uphold equal opportunity employment practices. Failure to comply will invite penalties and may also affect the company’s eligibility for government grants, CSR partnerships, and tax benefits.

Officials stated that the intent is to protect workers in the rapidly growing non-profit sector, which has often operated in regulatory grey zones despite providing essential public services. By bringing Section 8 employers into the formal labour law framework, the government aims to institutionalize fairness, reduce exploitation, and promote dignity of labour within mission-driven organizations.

Labour rights activists and legal experts have welcomed the reform as a long-overdue step toward inclusivity and equality in employment law. It signals a shift in how the state views the non-profit sector—not as an exception, but as an integral part of India’s formal workforce ecosystem.