NEW DELHI: The central government’s new labour code now makes it mandatory for employers to issue appointment letters in a specific format, ensuring that employees know exactly what they are being hired for, what they will be paid, and what benefits they are entitled to — before they even begin work.Until now, only certain industries were required to follow a standard format for appointment letters. This left workers in informal, traditional or semi-organised sectors with little clarity about their job terms, wages or social security entitlements, making them vulnerable to disputes with employers over basic service conditions.The new Occupational Safety, Health and Working Conditions (Central) Rules, 2026 changes this. Rule 6 of the code requires all employers to issue appointment letters in a prescribed format before work begins. The letter must clearly spell out the employee’s designation, category, wages, allowances, applicable social security benefits including EPFO and ESIC entitlements, and a broad description of their duties and responsibilities.Who does it cover?The rule covers everyone — skilled, semi-skilled, unskilled, supervisory, administrative, technical and managerial staff. The only exceptions are apprentices and interns.Sajai Singh, Partner at JSA Advocates and Solicitors, said the concept of mandatory appointment letters is not entirely new as several states already required them under their Shops and Commercial Establishments Act.“It is not something new in that sense. It is now just that the recognition is at a national level,” he said.Why informal workers needed thisWorkers in informal and semi-organised sectors often had no written record of their basic terms of employment — not their wages, not their work location, not their leave entitlements, and not even whether they were entitled to a notice period before being let go.Amrita Tonk, Partner at CMS INDUSLAW, said the more transformative impact of the rule will be felt precisely in these sectors. “Workers in the informal sector typically received no such document, leaving them with no written record of their wages or entitlements,” she added.Penalty for non-complianceNon-compliance carries financial penalties. Singh said Section 94 of the code provides for penalties ranging from Rs 2 lakh to Rs 3 lakh for a first offence, with additional per-day penalties for continued non-compliance.Existing employees can demand a letter tooYes. The code expressly requires employers to issue appointment letters to existing employees within three months of the rules coming into force.For central establishments, that three-month window has already passed. For the rest, since most state rules are yet to be notified, lawyers are advising employers to go ahead and issue letters using the central format now, with a note that an addendum may be added once state rules come into force.The rule is in force at the central level, but until states follow with their own rules, millions of workers governed by state laws will have to wait.