Employers may restructure salaries to absorb new social security costs but a key clause blocks it

A pay restructure idea hits a legal wall

India’s Social Security (Central) Rules, 2026 update compliance under the Code on Social Security, 2020 and expand the definition of wages, raising employer social security and gratuity liabilities. Employers may want to restructure salary components to manage these costs, but Section 124 restricts any move that reduces employee wages or benefits to offset the additional liabilities.