While less concentrated than in the Coimbatore-Tiruppur region, Madurai's smaller textile units and printing presses often operate on thin margins. The key compliance challenge is the threshold breach—MSMEs crossing the 20-employee EPF/10-employee ESIC limits without formal registration, often under-reporting headcount.

The mandatory 50% wages in CTC rule will drastically impact the Granite and MSME sectors, where low basic pay and high allowance/informal cash components are common. Reclassification of wages will increase EPF liability and necessitate a complete overhaul of current payroll structures.

MSME and textile units in Madurai often keep their workforce numbers just below statutory EPF/ESIC thresholds, exposing themselves to compliance risk during inspections or worker-triggered inquiries. Proactive voluntary registration is the safest strategy — enabling units to adopt EPF/ESIC even before crossing mandatory limits. ESIC’s e-Pehchan Card can also be used as a recruitment and retention incentive, strengthening employee benefits while ensuring full statutory readiness under NWC 2025.

Many informal and service-sector establishments in Madurai maintain artificially low Basic Pay to reduce statutory contributions, creating major compliance risk under NWC 2025. A staged payroll restructuring approach is essential—implemented in three phases—gradually raising Basic Pay toward the mandatory 50% threshold. Clear communication with employees about the long-term benefits of higher retirement savings through EPF helps manage resistance caused by temporary reductions in take-home pay.