Bhatia said the change marks a step toward formalisation of India’s labour market, alongside measures like GST 2.0 and the Employment Linked Incentive (ELI) scheme.
The Union Cabinet on Wednesday (September 16) approved raising the EPFO wage ceiling for mandatory coverage from ₹15,000 to ₹25,000 a month. Bhatia said the shift could add roughly 10 lakh new records to staffing companies as more of the informal workforce moves into EPFO coverage, with knock-on gains for the government’s pension corpus and infrastructure spending.
He also flagged a separate, longer-term trend: India’s gig workforce, currently around 1.2 crore people who choose variable daily wages over social security, could rise to 2.4 crore over the next five to six years, according to estimates from NITI Aayog and other reports.
For companies, the immediate effect is a straightforward cost increase. Ramani Dathi, Chief Financial Officer of TeamLease Services, explained that the incremental ₹10,000 added to the wage ceiling attracts a 12% contribution, translating to ₹1,200 per employee. “With the wage ceiling going up from 15,000 to 25,000 straight away on the incremental ₹10,000, 12%, which translates to ₹1,200 per employee, that would be the incremental cost to the companies,” Dathi said.
For staffing firms, that cost does not stay on their books for long. Dathi said client contracts are structured so statutory cost changes are passed through, pointing to a similar increase in 2014, when the ceiling rose from ₹6,500 to ₹15,000.
“The entire cost has been passed on to the clients with immediate effect. So, we don’t have to fund for the impact, for the incremental impact out of our pocket,” she said, adding that any pass-through delay affecting employees is offset by a matching delay on the company side, leaving TeamLease’s margins unaffected.
Bhatia broke down what the change means for take-home pay. Under the current ₹15,000 ceiling, deductions are capped at ₹1,800 a month from the employee and ₹1,800 from the employer, totalling ₹3,600.Under the new ₹25,000 ceiling, that rises to about ₹3,000 each, or ₹6,000 total — meaning roughly ₹2,400 less in employees’ hands each month. He noted the change lands during the festive period, which could shape how it is received, and said staffing contracts require his company to indemnify clients on all statutory and minimum-wage compliance, limiting the impact on Quess’s own margins.
Both executives were asked whether the reduced take-home pay could push younger workers away from formal jobs and toward gig or informal work instead. Bhatia said the debate over cash-in-hand versus social security will never get settled, citing 250 million people in India still seeking entry into the formal labour market, against roughly 10 lakh people turning working age every month. He added that workers will continue moving between formal, temporary and gig roles as the labour market evolves, and that Quess covers all three categories.
Dathi said rolling out the change will take time on the operational side. TeamLease works with more than 3,000 clients, and renegotiating cost-to-company structures across all of them is expected to take one to two quarters, with the approach varying by client — some absorbing the cost, others passing it on, and others restructuring pay entirely.
She said the compliance burden this creates for lower-salary roles could push more companies to outsource entry-level hiring to staffing firms altogether. She also noted the change applies only to employees already enrolled with EPFO; first-time contributors retain the option to opt out.
For the full interview, watch the accompanying video
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