contract labour

The Contract Labour (Regulation and Abolition) Act, 1970

Introduction

A contract labourer is one who is assigned to work in an establishment for a specific period through a contract by a contractor with or without the knowledge of the principal employer. They are indirect employees who are either paid daily wages or paid the accumulated daily wage at the end of the month. The contractor is responsible to hire, supervise and remunerate the contract labourers.

The practice of employing workers on a contract has been widely used in India for a very long time. Before and after independence the issue of contract labour has been a seriously analyzed topic and innumerable commissions, committees and even the Ministry of Labour have tried to identify the working conditions of such workers.

Studies have shown that contract labourers live in poor economic conditions and since their job is casual in nature they lack job security. Since there were no regulations and controls, the contract labourers were exploited for the gain of the employer and contractor. To regulate the employment of contract labour and free them from exploitation the government enacted a legislation called the Contract Labour (Regulation and Abolition) Act, 1970. On 10th February 1971, the Act came into force and will be applicable throughout the country.

Objectives and scope of this Act

The main objectives and scope of the Act are:

  • To prevent the exploitation of contract labour
  • To provide proper working conditions
  • To lay down the rules and regulations regarding the registration process of the establishments employing contract labour.
  • To state the requirements and the procedures of licensing contracts.
Who does the Act apply to?

The Act will apply to establishments under the following conditions:

  • Any establishment where 20 or more workmen are employed or were contracted as contract labour on any day during the preceding 12 months.
  • Any Contractor who employs or has employed 20 or more workmen on contract labour on any day of the preceding 12 months.
Establishments to which the Act does not apply

The Act does not apply to establishments that perform works of casual or intermittent nature

  • Seasonal work that is performed for less than 60 days
  • The work is considered intermittent if the work is performed for less than 120 days in the preceding 12 months.

Main Definitions

Principal Employer

The Principal Employer includes the head of any government or local authority, the owner or occupier, or the Manager of a factory (Under the Factories Act). The Owner, Agent, or Manager of a mine or any person responsible for the supervision and control of the establishment is also included.

Contractor

The Contractor refers to any person who supplies contract labour for any work to any establishment. This could also include the sub-contractor. A contractor to whom the Act applies has to take a license under the Act.

Establishment and Composition of the Advisory Boards

The Contract Labour (Regulation and Abolition) Act, 1970 provides for the establishment of Central and State Advisory Boards. The Boards are established to advise the Central and State governments respectively on matters concerning the administration of the Act and to carry out the functions assigned under the Act.

The Central Advisory Board

The Central Government constitutes the Central Advisory Board with representation from the Government, the Railways, the coal industry, the mining sector, the contractors, the workmen, and any other sector that is deemed fit by the government. The Central Government may nominate eleven to seventeen members to the Advisory Board.  The Number of members nominated from the workmen’s side should not be less that the number of members representing the principal employer and contractors. Apart from these members, the Board consists of a Chairman appointed by the Central Government and the Chief Labour Commissioner.

The State Advisory Board

The State Advisory Board is constituted by the respective State Governments and consists of a Chairman appointed by the government, the Labour Commissioner of that State and in their absence the State Government will appoint any other officer.

Apart from these members, the State government may nominate nine to eleven members to represent the government, industry, contractors, workmen, and other members from any other sector that the State government decides. The number of members nominated to represent the workmen shall not be less than the members nominated to represent the principal employer and the contractors.

The Central and State Advisory Boards have the power to form committees under the Act as they deem fit. The committee will discharge their duties and responsibilities in accordance with the provisions of the Act.

Registrations of Establishments hiring contract labour

Every establishment that proposes to hire contract labour is required to obtain a certificate of registration from the respective government. The registration procedure is as follows:

  • The Establishment should submit the application in Form No.1 to the Registration Authority along with the receipt of payment of the prescribed registration fee.
  • If the application is found correct in all respects, the Registering authority can register the establishment and issue a copy of the registration certificate in Form II.
  • The Certificate of Registration will contain the name and address of the establishment, the maximum number of workers to be hired as contract labour, the type of business, and any other important particulars.
The Responsibilities of the Employer

The employer has to fulfill the following responsibilities:

  • Register the Establishment.
  • Engage contract labour only through licensed contractors.
  • Display a notice showing the name and address of the Inspector in English and the local language along with details of wages and date of payment of wages.
  • Should ensure that the contractor pays the wages as per the wages fixed by the government or as fixed by the Commissioner of Labour or in their absence pay fair wages.
Licensing of Contractors

Every Contractor who wishes to undertake or execute any work through contract labour is required to obtain a license from the Licensing Authority. This condition applies to a contractor who has employed twenty or more workers during any day of the month.

The Procedure for obtaining a License

The licensing authority issues the license under Sec.12 of the Act.

  • The contractor has to make an official request to the Licensing Authority along with the application form.
  • Deposit the appropriate security deposit.
  • The license will include such conditions as the hours of work, fixation of wages, and other amenities due to contract labour.
  • The application in the prescribed form should contain the particulars regarding the location of the establishment, the nature of the process, operation, or work for which contract labour is to be employed, and such other details.
  • The license is valid for the period mentioned therein and may be renewed from time to time for such a period. The relevant fee has to be paid.

Provide the following facilities:

  • A canteen to the contract labour when they employ 100 or more workers and the work is performed for 6 months or more.
  • Provide adequate urinals for men and women separately.
  • Provide drinking water, washing facility, first aid, crèche, etc.
  • Properly maintain the various registers and records
  • Maintain a separate register of Contractors in Form XII
  • File the required returns (Annual) to the licensing authority by 15th February of the year.

Responsibilities of the Contractor

The Contractor has the following responsibilities:

  • Has to get approval from the Principal Employer.
  • Has to obtain a license from the Licensing Authority.
  • Raise monthly Bills for payment to the contract labour.
  • Maintain all relevant Registers likeMuster Roll, Wage register, etc.
  • Has to pay the wages on or before the 7th of each month.
  • Disburse the wages in the presence of the representative of the employer.
  • Have to distribute employment cards to all the workers three days before the commencement of work.
  • Have to file the half-yearly return in Form XXIV after 30 days from the close of the half-year, i.e. June and December.

Penalties

Anyone who violates any clause of the Act or any of the rules under the Act will be liable to imprisonment to the extent of 3 months or with a penalty of One thousand rupees or both. If the violation continues then an additional fine of one hundred rupees per day for every day of contravention will be imposed.

Shortcomings in the Act that need change

The Contract Labour (Regulation and Abolition) Act, 1970 has several drawbacks that need to be addressed by the legislature for better implementation.

  • The Act does not differentiate between core and peripheral activities and this has led to non-implementation.
  • The Act applies to establishments employing 20 or more contract labourers. Establishments and contractors avoid this responsibility by employing less than 20 labourers.
  • Establishments misuse the provision by taking licenses under different names, a single-window system should be adopted for issuing the registration and there should be a licensing authority to handle the issue in every state.
  • The penal provisions of the Act are not deterrent enough and, therefore, principal employers prefer to pay the penalty rather than follow the provisions of the Act.
  • There is a need to extend the education scheme to contract labour as most of them are unskilled, illiterate, and ignorant of their rights.
  • As there are no direct or independent provisions under the Act to file for claims etc., these claims are filed under the Payment of Wages Act or Minimum Wages Act. This has to be included in the Act itself.

Conclusion

The Central Government enacted the Contract Labour (Regulation and Abolition) Act, 1970 to prevent exploitation of the contract labour by both employers and contractors. The Act provides them with certain rights as contract labour and gives them a legal provision to demand their just dues. However, the shortcomings have to be addressed and must be legislated so that necessary changes can be made to strengthen the provisions. There is also a need to make the Act less complicated for the principal employers and contractors and with provisions for better safeguards and amenities to contract labourers.

GetifyHR, with its years of experience in handlingPayroll and all Statutory Compliance rules and regulations, have assisted clients in handling their requirements of contract labour. We expertly handle all issues pertaining to the employment of contract labour, and establishments have gained from our expertise in the eficient handling of contract labour.  Our high-end, cloud based Payroll module is capable of handling these issues in a seamless manner, making it easier for organizations to have the relevant details at the click of a button, as and when they require it.

 

Labour Welfare Fund

Tamil Nadu Labour Welfare Fund New Amendment


The Tamil Nadu Legislative Assembly introduced a Bill in the Legislative Assembly of the State on 6th September 2021, called the Tamil Nadu Labour Welfare Fund (Amendment) Act, 2021. The Act amends the Tamil Nadu Labour Welfare Fund Act, 1972 with regard to the contribution towards the TNLWF. By this amendment, changes were made in the contribution towards the fund from the employee, employer and the government.

However, by the Notification issued by the Government of Tamil Nadu vide G.O. Ms. No.160 dated 2nd December 2022, the amount of contribution has been further substituted as follows:

1. The employee contribution has been substituted from the earlier sum not exceeding ₹ 10 per year to a sum not exceeding ₹ 20 per year.

2. The employer contribution has been substituted from the earlier sum not exceeding ₹ 20 per year to a sum not exceeding ₹ 40 per year.

3. The Government contribution has been substituted from the earlier sum not exceeding ₹ 10 per year to a sum not exceeding ₹ 20 per year.

G.O Copy link


Changes have been introduced in various labour laws across the country and most companies are hard-pressed to keep track of these changes. GetifyHR has been providing highly efficient service to companies to handle Payroll Processing, Leave and Attendance, Statutory Compliance requirements, etc. Importantly, GetifyHr has enabled companies to be fully updated of all the frequent changes in the different labour laws in operation across the country. With our high-end, cloud-based payroll module we have been able to keep our clients fully compliant of all the statutory rules and regulations.
PF and ESI Inspections

EPF and ESI Inspection criteria and the documents to be produced before the Inspectors!

The need to ensure social-economic justice for the people and establish a Welfare state is enshrined in the Constitution of India. Employees, especially in the private sector found themselves in trouble once they retired.

To alleviate this problem the government introduced a long-term savings scheme that would support them in retirement or superannuation. This legislation is the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952 (EPF and MP Act).

Similarly, there was a need to safeguard the lives of employees against the effect of sickness, physical disability, and death due to the nature of work. The Employees’ State Insurance Act, 1948 was legislated by the government to take care of this aspect. This Act supports them during such eventualities.

Inspection Policy for EPF and ESI

Both these Acts have proper guidelines on the inspection of the registered entities under the Act. In this article, we shall delve into the criteria for inspection and the documents that are required to be produced during such inspections.

EPF Inspection criteria

Inspection guidelines have been passed to achieve the objectives of simplifying business regulation and bring in transparency and accountability to labour inspections.

The inspections can be either mandatory or optional.

Mandatory Inspections

Inspections are mandatory under these conditions:

  1. All new covered/registered establishments are prone to mandatory inspections.
  2. All establishments registered on the Electronic Challan cum Return Portal (ECR) that are not marked as closed and are not complying.
  3. All establishments that have sent in a closure request.
Optional Inspections

Optional Inspections are undertaken under the following conditions:

  1. When the remittances towards EPF drop in excess of Rs:10,000
  2. Membership drops in excess of 50 members
  3. All other units where there is a weightage drop of 20%.
Inspection procedure

Normally the establishment is informed about the inspection and these are carried out during normal working hours. At the time of inspection the following documents have to be produced:

A 100-page notebook that is generally available in Labour Law Stationery Book stores should be kept ready for the Inspector to note his/her remarks. All other records/registers in respect of EPF have to be submitted for inspection and they are:

  1. Attendance Register or Muster Roll
  2. Wage/Salary Register
  3. Bank Statement
  4. Ledger/Cash Book/Vouchers
  5. Copies of the Audited Balance Sheet
  6. Challan Copies
  7. EPF Code Allotment Letter & Form 5A
  8. Bonus Register
  9. Overtime Register
  10. Active UAN List
  11. List of Contractors, nature of work, and compliance made by the

The Inspector, after the inspection, has to note down his/her remarks in the Inspection Book and sign the same.

ESI Inspection criteria

ESI Inspections also follow the same pattern as EPF.

  1. All new units that are covered/registered.
  2. All establishments that have defaulted for a period of 6 months
  3. Units that have made closure requests.
  4. Units where no inspection has been carried out in the last 3 years.
  5. Whenever such inspection is required by Central Data Analysis Unit (CDAU).
  6. When there is a 30% drop in the contribution when compared to the previous contribution period. The top 30% of such units will be inspected.
  7. When there is a drop in the number of employees by 30% and above when compared to the previous contribution period (over a period of 6 months). The top 30% of such units are to be inspected.
  8. Security/Manpower agencies that employ more than 250 employees where inspection has not been conducted in the last 2 years. The top 30% of such units are to be inspected.
  9. Any other units that do not fall into any of the above categories. The top 10% of such units are inspected.
 Inspection procedure

Normally the units are informed about the inspection and these are carried out during normal working hours. At the time of inspection the following documents have to be produced:

  1. Attendance Register
  2. Wages or Salary Register
  3. Bank Statement
  4. Ledger/Cash Book/Vouchers
  5. Copies of the Audited Balance Sheet
  6. Challan copies
  7. ESIC Form 32 register
  8. Accident Book under Rule 66
  9. All other documents related to payments made to employees
  10. List of Contractors, nature of work, and compliance made by them.
Conclusion

The Inspection procedure for both EPF and ESIC are very similar. The Registered units have to be fully prepared with all the relevant records/registers during the time of inspection. Non-availability of such records or registers will be viewed seriously and the authorities are empowered to take strict action against such units.

GetifyHR, which has years of experience in handling these matters can provide the ideal solution for companies to go through these procedures without any stress. Our Payroll and HR module can provide all the required inputs to the authorities as and when required and in the process keep the company fully compliant at all times.

blog - leave type

What are the multiple leave types and their entitlements as per the Labour Acts?

Introduction

Labour laws have been enacted to safeguard the interests of the employees and these required the employers to follow certain statutory rules and regulations.  These laws signify the relationship between the employer, the employee and the governments, both central and state.  The trade unions also play their part in framing these rules especially when it comes to implementing them in various organizations.  The Factories Act, 1948, the Shops and Establishment Act, and the Maternity Benefit Act, 1961 have set the policies for the types of leave that an employee can avail.

Some of these laws contain the provisions for different types of leave that the employees are entitled to take during their period of employment.  The applicability and duration of these leaves may slightly differ from state to state and from company to company.  However, in general the most common types of leave are Casual Leave, Earned Leave, Sick Leave, Maternity Leave and Compensatory off Leave.  A few other leaves like Paternity Leave, Marriage Leave, and Bereavement Leave are also available but these would depend upon the leave policies followed by the company and would, therefore, differ from company to company.  The implementation and applicability of the leaves types are detailed below.

Casual Leave

Casual is a leave that an employee can avail due to some urgent or unforeseen personal needs or circumstances.  Prior permission is required for this leave and any leave that is taken without permission would result in deduction of salary for that particular day.  The number of days that can be availed is decided by the company though most states have framed laws for providing such leave.  Normally the leave could range from 12 to 15 days in a year and would also depend on the type of industry.  In Tamilnadu the Casual leave entitlement is 12 days in a year.

Earned Leave

Earned Leave or Privilege Leave is a type of leave entitlement that an employee can avail when they complete one year of service.  Earned Leave is used for personal reasons such as in taking a vacation, or to conduct certain functions or festivals that are not declared holidays.  Earned Leave can be encashed, which means when you leave the company, you can encash the number of days of unutilized earned leave.  The value of one days earned leave is equal to one day’s Basic salary + DA.

Factory workers who have worked for a maximum of 240 days in a year are eligible for Earned Leave.  An adult worker is entitled to 1 days earned leave for every  20 days of work, whereas, children under 15 get 1 days earned leave for every 15 days worked. Employees involved in Sales or in the Newspaper industry is entitled to one month’s leave for every 11 months worked.

Since this type of leave is long and is normally planned for earlier, prior permission is required.  The administration has to be informed well in advance so that they can make alternate arrangements during the absence.  The unavailed earned leave balance is carried forward to the next year.  However, the number of days that can be carried forward may differ from state to state.  For example, in Tamilnadu, the maximum earned leave that can be carried forward is 45 days, whereas, in Kerala it is 24 days.

Sick Leave

Sick Leave can be availed by the employee when they fall sick.  The employee has to produce a medical certificate to avail this leave if the leave exceeds two or three days at a time. The normal entitlement is 12 days sick leave during a 12 month period.

Sick leave can be carried forward and in some cases it can be encashed at 50% of the basic salary for a day.  An apprentice is entitled to 15 days sick leave in a year whereas, and employee of t he Newspaper industry can avail one month sick leave for every 18 months work.

Maternity Leave

Maternity Leave is a benefit allowed to women employees under the Maternity benefit Act, 1961.  The Act ensures that women employees can avail the benefit of 26 weeks leave during the pre and post delivery period.  This is a paid leave and during this period the employee will be paid Basic salary + DA.  The women employee can opt for 8 weeks pre delivery leave and the balance post delivery leave.  This is applicable only for and 1st and 2nd delivery and a woman employee expecting a 3rd child is entitled for only 12 weeks maternity benefit.

A woman employee who adopts a child is entitled to 12 weeks maternity leave starting from the day of adoption.  This is applicable only when the adopted baby s below three months of age.  Similarly, a commissioning mother ( a biological mother who uses her egg to create an embryo implanted in a surrogate mother) will be entitled to Maternity benefit for a period of 12 weeks from the date the baby is handed over to the commissioning other.

A woman employee who has undergone Tubectomy during pregnancy can avail 2 weeks leave from the date of the Tubectomy procedure. For employees who undergo critical conditions like Pre-mature delivery, miscarriage and medical termination of pregnancy, one month’s maternity benefit is applicable.

Paternity Leave

Paternity Leave is a leave entitlement to expectant fathers after the child is born.  This again depends on the company’s leave policy.  The leave entitlement is for 2 to 4 weeks.  Though this leave is not mandatory, it is important that the HR’s understand the stress involved in bringing up a new born baby during the first few days and allow such leave to the expectant fathers.

Marriage Leave

Marriage Leave is not mandatory in India.  This would depend on the company’s leave policy.  Most companies tend to give 3 days’ marriage leave with the employee asked to provide documentary proof in the form of an invitation or a marriage certificate for its approval. An employee is eligible to only one Marriage Leave during the entire period of employment in the company.

Bereavement Leave

In the event of a death in the family, Bereavement Leave can be granted.  Though it is not mandatory, compassionate leave as it is also called can be granted to allow the grieving employee to participate in the last rites and take care of other personal issues.  Companies that are forward looking and care for their employees offer bereavement leave.

Compensatory Off leave

Employees who have worked for more hours than they are required to is entitled to Compensatory Off leave.  This happens when an employee has worked for more hours or has worked on a weekend of a holiday.  Compensatory Off has to be automatically recorded in the system and the employees must be informed that they can avail an extra day of leave for the extra time they have put in.  Compensatory Off has to be availed within an expiry period of 4 to 8 weeks, therefore, the employee has to utilize the compensatory off within period.

Loss of Pay or Leave without Pay

When an employee has availed all the leave that he or she is entitled to including the leave types like bereavement leave, marriage leave etc, and wishes to take leave, then he can take leave with a pay cut.  This is known as Loss of Pay leave or Leave without Pay.   Any leave availed over and above the leave entitlement as per the leave policy is considered as Loss of Pay leave.

An employee availing leave without prior intimation or not providing medical certificate for the sick leave availed would be treated as Loss of Pay leave.  Loss of Pay leave has to be properly tracked so that the salary deduction can take place for the number of days of Loss of Pay during that month.

Conclusion

Proper maintenance of the leave and attendance of employees is of paramount importance in an organization.  This operation is handled during the Payroll process and it is, therefore, imperative that the payroll process in maintained most efficiently and without any errors.  Manual processing using Excel worksheet and processing with a customized software may be successful when the workforce is small, but where the workforce is large the ideal option is to outsource the process to an experienced service provider

GetifyHR ranks among the top leave management service providers in India.  Our high-end, technology driven software is perfectly designed to address all aspects of leave management that include leave application, approval or rejection of leave, managing leave balances and leave analytics.  All the leave types like casual leave, earned leave, sick leave, maternity leave, paternity leave, marriage leave, compensatory off leave, loss of pay leave etc can be efficiently handled with our module.  This cloud-based package is easy to handle and will provide all the necessary reports at the click of a button.  Leave management has never been an easy task but with GetifyHR by your side this complex task gets overly simplified.

Factories Act

The Factories Act, 1948

A Brief History

This was the time when the British were ruling India, the latter half of the nineteenth century heralded the growth of large-scale industry in the country and there was a need to regulate the working conditions in factories. This need was fulfilled by the provisions of a legislation to regulate the working conditions in factories through the first Factories Act that was enacted in 1881.

The Act regulates the working conditions of the workers, especially concerning the health, safety, working conditions, and hazardous processes in factories. Amendments to the Act followed in the years 1891, 1911, 1922, and 1934 during the British era and once India gained Independence in the year 1947, the Indian Government passed the Factories Act, 1948. This Act extends to the whole of India, and includes Jammu and Kashmir. The Act came into force on 1st April 1949 and amendments came out in the years 1976 and 1987.

Objectives of the Act

The main objective of the Factories Act, 1948 are to regulate the working conditions in factories and it lays down several provisions to protect the health, safety and welfare of workers, and makes provisions to handle hazardous processes in the workplace. The Factories Act, 1948 is more comprehensive than all the previously enacted Factories Acts, and lays down the conditions for the employment of young persons, women and children and also focuses on annual leave entitlements of the workers.

The health of the Workers

The health of the worker finds a prominent mention in the Act. The provisions of the Act require every factory coming under the purview of the Act to protect the health of the workers. The Act lays down that every factory shall keep the premises clean, with provisions for disposal of waste and effluents, proper ventilation and maintenance of temperature, and prevention of dust fumes. The premises should not be overcrowded and should have proper lighting.

There should be provisions for adequate drinking water along with provisions for clean and hygienic latrines and urinals. Sufficient spittoons have to be placed in convenient places and they have to be maintained in a clean and hygienic condition.

Safety

The safety of the workers is paramount in a workplace. The Act lays down provisions for the safety of the workers and they include proper fencing of the machinery. Only skilled workers should handle the dangerous mechanical devices, with assurance of proper maintenance. Young people should not operate such machines. For the worker to escape in the event of an emergency, proper manholes have to be provided.

Working Hours

The Act sets forth provisions to control the working hours of the workers. Adult workers are not allowed to work in a factory for more than 48 hours in any week. Provisions for weekly holidays, for compensatory holidays and proper intervals for rest are a must. The maximum number of hours that an adult worker is required to work is 9 hours in a day. Provisions regarding night shifts, overlapping of shifts, and extra wages for overtime are also provided through this Act.

Welfare Measures

Welfare measures include the facilities provided to workers inside or outside the factory premises. These include provisions for a well-maintained canteen, rest and recreation facilities, housing, and all other services that contribute to the welfare of the workers. Where there are many women workers, crèche facilities have to be provided to take care of their children, especially those below the age of 6 years.

Applicability of the Act

The Factories Act applies to any factory wherein 10 or more workers are employed or were employed on any day of the preceding 12 months, and in any part of which a manufacturing process is being carried out with the aid of power. The Act is also applicable to any factory where 20 or more employees are working or were working on any day of the preceding 12 months, and in any part of which a manufacturing process is being carried out without the aid of power.

A mine or a mobile unit belonging to the Armed forces of the country, a railway running room, or a hotel, restaurant, or eatery is not included in this. All the workers in different groups and relays in a day shall be taken into account when compiling the number of workers in the unit.

Important Definitions

1. The Occupier

The ‘Occupier’ of an organization denotes the person who has ultimate control over the affairs of the factory. Depending on the type of organization, different designations may be given to the occupier.
1.1  If it is a firm or other association of individuals any one of the individual partners or members thereof shall be deemed to be the occupier.
1.2  In the case of a company, any one of the Directors shall be deemed to be the occupier.
1.3  In the case of a factory owned or controlled by the Central Government or any State Government or any local authority, then the person or persons appointed to manage the affairs of the factory shall be deemed to be the occupier.

2. The Worker

The worker means a person who is employed directly or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or not in any manufacturing process, or in any other kind of work incidental to or connected with the manufacturing process, or in cleaning any part of the machinery or premises used for the manufacturing process, or in any other kind of work incidental to or connected with the process of manufacturing. Any member of the armed forces of the country is not included in this.

3. What is the Manufacturing Process?

Manufacturing Process concerns any process for making, altering, ornamenting, finishing, packing, oiling, washing, cleaning, breaking, or otherwise treating or adopting any article or substance with the view to its use, sale, transport, delivery of disposal or pumping oil, water, sewage or any other substance, or in generating, transforming of transmitting power or composing types for printing, printing for letterpress, lithography, photogravure or other similar process or book-binding or processing or storing any article in cold storage.

4. Annual Leave with wages

The Act has provisions regarding the entitlement of Annual Leave with wages to each worker. Every worker who has worked for a period of 240 days or more in a factory during the calendar year shall be entitled to leave with wages for several days in the subsequent year. An adult worker is entitled to one day’s leave for every twenty days worked during the previous calendar year. For a child worker, the entitlement is one day for every fifteen days worked during the previous calendar year.

5.  Provisions regarding Hazardous process

According to the Act, “hazardous process” refers to any process or activity concerning an industry specified in the ‘First Schedule’ where unless special care is taken, raw materials used therein or the intermediate or finished products, by-products, wastes, or effluent thereof that would cause impairment of the health of the persons engaged in or connected therewith or result in pollution of the general environment.

The Occupier or Manager of every factory involving a hazardous process shall disclose in the manner prescribed by the Act, all information regarding dangers, including health hazards and the measures taken to overcome and minimize such hazards arising from the exposure to or handling of the hazardous materials or substances in the manufacture, transportation, storage, and other processes, to the workers employed in the factory, to the local authority under whose jurisdiction the factory is situated, and the general public in the vicinity.

6.  Penalties under the Factories Act, 1948

Contravention of any of the provisions of the Act or any of the rules thereunder or any order given in writing thereunder will have serious consequences. The occupier and manager of the factory shall be held guilty of the offense and punishment include imprisonment for a term that may extend up to 2 years or with a fine that could extend to one lakh rupees or with both. In case the contravention continues after conviction, a further fine of one thousand rupees for each day on which the contravention is so continued is imposed.

In case the contravention of any provisions or any rules results in an accident causing death or serious bodily injury the fine shall not be less than twenty-five thousand rupees in case of death and five thousand rupees in case of an accident causing serious bodily injury.

Conclusion

The Factories Act, 1948 with its amendments in 1976 and 1987 has been in operation for well over 70 years and has provided tremendous service to the factory workers in the country. The Act has considerably improved the working conditions in factories and has effectively killed the exploitation of workers, and provided them with enough teeth to bargain with employers for better working conditions.

The workers are the backbone of the industrial sector and their safety and welfare are critical for industrial growth. Employers have to be fully aware of their legal obligations concerning the Factories Act and GetifyHR, with its years of experience in handling these issues is the ideal choice to assist factories in this vital task. Their cloud-based Payroll Outsourcing module is the perfect choice to not only handle payroll but also handle all Statutory Compliance issues. Complying with the Factories Act, 1948 and the later amendments is vital for all factories, and an associating with GetifyHR will help you to achieve this.

Types of Trainees and Labour Laws related to Trainees in India

A trainee is a person undergoing a training program within an organization, after graduation from the higher and technical course. These trainees may be subsequently absorbed into the organization on completion of the training program.

In India, there are no specific laws that determine or include the word ‘trainees’. We can identify three types of people who undergo training. They are Trainees, Interns, and Apprentices.

Trainees

As mentioned earlier, trainees are those individuals, usually, freshers, who lack specific skills and who undertake the specified training as ‘trainees’. Upon completion of training, they may be absorbed into the organization if found fit. Stipend is paid during the period of training.

Interns

Interns are students who are undergoing their education but due to the requirement of the curriculum, undertake an internship program in an organization. An internship is a temporary position that is mandated in the course that they are undergoing. In most cases, interns do not receive any wages during the period of internship. There are, however, exemptions where interns are paid during their internship.  However, paid internship is an exception.

Apprentices

An apprentice is a person who trains for a career by working under the supervision of a highly experienced individual or worker. The apprentices have a formal contract with the employer. The apprenticeship follows a clear plan and includes on-the-job training combined with an educational curriculum. The individual comes under the Apprentice Act, 1961. Apprentices are paid stipends ranging from Rs:9,000/- to a high of nearly Rs:21,000/-.

Labour Laws related to Trainees

In India, there are no specific labour laws that include trainees. A lot of confusion persists regarding whether they are eligible to receive the benefits that normal employees get. There are instances where trainees are looked upon as employees, and organizations that engage trainees should be aware of certain facts before engaging them.

Are trainees eligible for EPF?

A trainee is eligible to get the benefit of the EPF Act under certain circumstances. If the trainee is not a student and does not come under the Apprentices Act, 1961, then the trainee will be eligible for EPF deductions. This is subject to the trainee attracting Sec.2(b) and Sec.2(e) of the EPF Act.

 

Section 2(b)


section 2(b)

 

Section 2(e)


section 2(b)

Are trainees eligible for ESIC?

Trainees are generally paid a stipend. If the trainee satisfies Sec.2(9) of the ESIC Act, then he is considered an employee and is eligible to be subjected to ESIC contributions.

 

Section 2(9)


section 2(9)
section 2(9)

Are trainees subject to the Minimum Wages Act, 1948?

Trainees, especially in the private sector have to be paid the notified Minimum wages. The Minimum Wages Act contains a listing of the scheduled employment. As per the Act, temporary or probationers under scheduled employment must receive a minimum rate of wages as notified.
The Ministry of Labour and Employment, through its Notification G.S.R 680 (e) dated 22nd September 2014 notified the minimum wages to be paid to trade apprentices.

This minimum rate is calculated as a percentage of the salary of semi-skilled workers of the respective State or Union Territory. The percentages are as follows:

  • 70% during the first year of training.
  • 80% during the second year of training.
  • 90% during the third and fourth year of training.

In the event of a State or Union Territory not notifying the minimum wages then the lowest minimum wages of the scheduled employment for semi-skilled workers shall be considered for calculating the stipend.

 

G.S.R 680 (e)


G.S.R 680 (e)

Are Trainees eligible for Bonus?

Where the trainees are engaged under the Apprentices Act, 1961, they will not be entitled to a Bonus under Sec. 2(13) of the Payment of Bonus Act, 1965. The Apprentice is not considered an ’employee’ and is, therefore, not eligible to receive a Bonus.

If the trainee has not been engaged under the Apprentice Act, 1961, then the trainee is eligible for a Bonus under the Payment of Bonus Act, 1965 subject to satisfying Sec.8 of the Act.

 

section 2(13)


section 2(13)

section 8


section 8

Are Trainees eligible for Maternity benefits?

A trainee with one surviving child, engaged as an Apprentice under the Apprentices Act, 1961, may be granted maternity leave for 90 days from the date of its commencement without payment of the stipend, and the apprenticeship training period shall be extended accordingly.

The apprentice is eligible to receive the stipend during the extended period.

A woman trainee can also avail of the benefit under the Maternity Benefit Act, provided she satisfies Sec. 3(o) and Sec. 5(2) of the Act.

 

Section 3(o)


Sec. 3(o)

 

Section 5(2)


Sec. 5(2)

Conclusion

From the available information, we can understand that

  • Trainees shall be considered for entitlement of EPF and ESI subject to them not being apprentices under the Apprentices Act, 1961.
  • Apprentices engaged under the Apprentices Act, 1961 are not treated as ’employees’ under the ESIC Act, whereas a trainee can be treated as an ’employee’.
  • Interns who are paid needn’t be considered for EPF and ESI, whereas unpaid interns have nothing to be deducted from as they do not receive any remuneration.
  • Trainee women apprentices engaged under the Apprentice Act, 1961 who have one surviving child may be granted 90 days leave under the Maternity Benefit Act, 1961.
  • Apprentices engaged under the Apprentices Act, 1961, or as per the Model Standing Orders, needn’t be considered for EPF.
  • Trade Apprentices are eligible for Minimum Wages.
  • Trainees in the scheduled employment as per the schedule of the Minimum Wages Act must receive a minimum of the notified rate.

GetifyHR has gained tremendous experience in handling these issues. Our Payroll Outsourcing Module is perfectly designed to handle all aspects of Payroll processing like generation of Payslips, Leave and Attendance, and Statutory requirements like EPF, ESI, PT, and TDS. Ours is a one-stop solution for all Payroll related issues.

HRM - Laws and Regulations

Human Resources Management (HRM) – Complying with Laws and Regulations

Introduction

Human Resources Management is a vital activity in any organization.  People are the greatest assets to a company or organization. Human Resources Management is a strategic approach to effectively and efficiently managing the employees in an organization. Human Resource Management is the process of employing people, training them for specific roles, remunerating them for their performance, developing policies for their well being, and strategizing to retain them.

The HR department acts as a liaison between the employer and the employees. The HR team helps to maintain the organizational structure of the workplace and ensures safe and efficient performance of the jobs. HR management holds many responsibilities and in this article, we will briefly touch on the functions of the HR department and fully focus on laws and regulations that companies have to comply with to be fully compliant.

Functional areas of Human Resources Management

HRM activities involve Hiring and Recruitment, Training, and development, maintaining Employer-Employee relationships, instilling and maintaining the company culture, handling the benefits and compensations due to the employees, handling indiscipline, and managing compliance issues. The focus of a company is to generate revenue and this can be achieved by, utilizing the skills and abilities of people.  HRM play a critical role in achieving this.

Hiring and Recruitment

Recruiting the best talent and retaining them is the top priority of many organizations. Similarly hiring to fill a role is a vital activity that is an ongoing process in any organization. The HR department plays a critical role in the hiring and recruitment process. The HR team works very closely with the other department heads or supervisors to identify the needs. The recruitment strategy is formulated and the HR team handles all activities like placing advertisements, screening applications, and interviewing the candidates.

Training and development

Retaining talent is a very critical task for all organizations, and the HR team performs this critical task.  The HR department to help employees to prepare for career advancements within the organization initiates Training and Development programs. This will assist in retaining talent and will benefit both employers and employees. This would usher in higher productivity and lower turnover rates. This also encourages job satisfaction and boosts the employees’ confidence in the organization.

Employer-Employee relationship

Maintaining a healthy employer-employee relationship contributes not only to the growth of the company but also creates greater trust in the management. The HR department is the liaison between the employer and the employees and will help mitigate any disagreements.

Amicable settlement of all employee grievances whether regarding benefits, compensation, work hours, workload, etc are achieved through consultations, thus creating a positive work atmosphere. This is vital for the growth of the company.

Maintaining Company Culture

Company culture may vary from company to company. The HR department may share the company’s values, vision, and rules with the employees during the onboarding process. Maintaining company culture means being able to identify any shortcomings within the organization and being able to address them for better functioning of the company. The HR team addresses these shortcomings effectively.

Benefits and Compensation

Though it is an administrative task, the HR departments oversee both the mandated and voluntary company benefits. Employees contribute towards social security, unemployment, and workers’ compensation are mandated benefits, whereas other benefits like paid time off, disability income, etc are voluntary. They serve as additional incentives to the employees, both potential and current. HR managers are fully aware of the company benefits policy and are capable of clearly explaining this to the employees.

Handling indiscipline

The HR team is highly experienced and is, therefore, well equipped to handle indiscipline. Disciplinary action like issuing show cause notices, and termination are delicate issues and have to be handled fairly and consistently to prevent escalations. HR Managers must have a clear system in place to hold employees accountable. They should be able to consult with legal counsel to ensure they are well within the law in the handling of disciplinary issues.

Complying with Laws and Regulations

Statutory Compliance requirements have to be fully complied with by all companies that employ 10 or more employees. The Government enacts these rules and regulations to safeguard the interests of the employees by providing healthy working conditions and ensuring fair work practices.

The HR teams are entrusted with the task of seeing that the company is fully compliant with all the statutes, rules, and regulations. The government keeps tweaking these rules very often and the onus is on the HR team to update these changes.

These are some of the more important functions of Human Resource Management. We shall now proceed to the Labour Laws and Regulations that are to be managed by the Human Resource Management team.

Labour Laws and Rules

Labour Laws are a body of laws, administrative rulings, and precedents that address the legal rights of working people and the restrictions on their organizations. These laws define the rights and obligations of workers and employers in the workplace. Labour Laws arose due to the demand of employees for better working conditions, and their right to organize. From the employer side, the demand was to restrict the power of workers in many organizations and to keep labour costs down.

A wide number of Labour Laws were legislated and it was made mandatory for companies or organizations to strictly follow them. Companies, especially those employing a large number of employees look upon their Human Resources Management teams to handle these laws and keep the company compliant.

The role of the HR team becomes vital as these are subject to frequent changes, and therefore, there is a need for constant updation at the administrative level.

However, the Ministry of Labour and Employment, Government of India, introduced 4 Bills in 2019 to consolidate 29 of the existing labour laws into 4 Codes.  These Codes or Reforms hope to empower the worker, both in the organized and unorganized sectors, and safeguard their interests.

These 4 Labour Codes are:

  1. The Code of Wages, 2019
  2. The Code of Social Security, 2020
  3. The Industrial Relations Code, 2020 and
  4. The Occupational Safety, Health and Working Conditions Code, 2020

1.  The Code of Wages, 2019

The Code of Wages, 2019 subsumes the following 4 Acts.

1.     The Payment of Wages Act, 1936

The objective of this Act is to regulate the payment of wages to employees in time without delay and deduct the mandated contribution from the employees, and the employers under the provisions of the Act.

2.     The Minimum Wages Act, 1948

The objective of the Minimum Wages Act, 1948 is to secure minimum wages for all the workers whether skilled or unskilled in the scheduled employment. It hopes to safeguard employees and prevents exploitation by employers.

3.     The Payment of Bonus Act, 1965

The Payment of Bonus Act, 1965 provides the payment of bonus to persons employed in certain organizations, employing 10 or more employees, based on profit or productivity. The objective is to impose a legal responsibility upon the employer who is covered by the Act, to pay Bonus to their employees as an incentive.

4.     The Equal Remuneration Act, 1976

The Equal Remuneration Act, 1976 provides for the payment of equal remuneration to men and women employees without discrimination on grounds of gender.

2.  The Social Security Code, 2020

The Social Security Code has subsumed the following 9 Acts:

1.     The Workmen’s Compensation Act, 1923

The Workmen’s Compensation Act, 1923 provides workers employed in certain industries compensation for injuries suffered during employment and to make good the losses.

2.     The Employees State Insurance Act, 1948

The Employees State Insurance Act, 1948 is an Act to provide certain benefits to employees in the event of some eventualities like sickness, maternity, and employment-related injury.

3.     The Employees Provident Fund and Miscellaneous Provisions Act, 1952

The Employees Provident Fund and Miscellaneous Provisions Act, 1952 were enacted to provide social security to employees. Through this Act, the Employees Provident Fund was set up to provide a post-retirement benefit for the employees or their legal heirs in case of the death of the employee. The Act provides for the institution of provident fund, pension fund, and deposit-linked insurance fund for employees employed in establishments that come under the purview of the Act.

4.     The Employees’ Exchanges (Compulsory Notification of Vacancies) Act, 1959

The Employees’ Exchanges (Compulsory Notification of Vacancies) Act, 1959 provides for compulsory notification of vacancies to the Employment Exchange and the submission of returns relating to employment by the employer.

5.     The Maternity Benefit Act

The Maternity Benefit Act was enacted to regulate the employment of women at the time of their maternity. The Act entitles women employees to’ maternity benefit’ which is fully paid wages during the pre-maternity and post-maternity period. Women employees are eligible for maternity leave for 26 weeks.

6.     The Payment of Gratuity Act, 1972

The Payment of Gratuity Act provides for the payment of gratuity to employees as a token of appreciation for their contribution to the company. It is a monetary benefit provided to employees employed in mines, factories, plantations, oil fields, ports, and other establishments after their retirement.

The gratuity is 15 days’ salary for every year of employee service subject to a maximum of rupees ten lakhs.

7.     The Cine-workers Welfare Fund Act, 1981

The Cine-workers Welfare Fund Act, 1981 was enacted to provide for the levy and collection of a cess on feature films to finance the activities to promote the welfare of certain cine-workers. Workers covered under the Act received monthly remuneration of not less than Rs:8000/-.

8.     The Building and other Construction Workers Welfare Cess, 1996

This Act was enacted to regulate the employment and condition of service of building and other construction workers and to provide for their safety, health, and welfare measures and other matters connected therewith.

9.     The Unorganized Workers’ Social Security Act, 2008

The Unorganized Workers’ Social Security Act, 2008 enables the formulation of Welfare Schemes for the workers of the unorganized sector. This welfare scheme covers health and maternity benefits, life and disability cover, old age protection, etc.

3.  The Industrial Relations Code, 2020

The Industrial Relations Code, 2020 subsumes the following 3 Acts:

1.     The Industrial Disputes Act, 1942

The Industrial Disputes Act, 1942 was promulgated in April 1942. It was enacted to make provisions for the prevention and settlement of Industrial Disputes and for providing safeguards to the workers.

2.     The Trade Unions Act, 1926

The Trade Unions Act, 1926 was enacted to provide for the registration of Trade Unions and to define the law relating to registered Trade Unions.

3.     The Industrial Employment (Standing Orders) Act, 1946

The Industrial Employment (Standing Orders) Act, 1946 requires employers in Industrial Establishments to define conditions of employment under them.  The Act defines the laws which govern the relationship between the employer and the workman in an industrial establishment and includes the elements such as classification of worker, working hours, attendance, suspension, termination, etc.

4.  Occupational Safety, Health, and Working Conditions Code, 2020

The Occupational Safety, Health and Working Conditions Code, 2020 subsumes the following 13 Labour Acts in a single code.

1.     The Factories Act, 1948

The Factories Act, 1948 was enacted to consolidate and amend the law regulating labour in factories, with respect to occupational safety and health.

The Factories Act, 1987, amended the Act.

2.     The Contract Labour (Regulation and Abolition) Act, 1970

The Contract Labour (Regulation and Abolition) Act, 1970 is an Act to regulate the employment of contract labour in specific establishments and also provide for its abolition under certain circumstances. The Act was enacted to prevent the exploitation of contract labourers as there was no existing law.

3.     The Mines Act, 1952

The Mines Act, 1952 was enacted to provide measures relating to health, safety, and welfare of workers employed in mines and oil fields. The Act specifies the duties of the employer to manage the mines or mining operations and the health and safety of mines.

4.     The Dock Worker (Safety, Health and Welfare) Act, 1986

The Act provides for the health, safety, and welfare of dock workers and matters connected therewith. Any work within the vicinity of any port where loading, unloading, movement, or storage of cargo into or from a ship or other vessel, port, dock, storage place, or landing place comes under the purview of this Act.

5.     The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996

This Act was enacted to regulate the employment and condition of service of building and other construction workers and to safeguard their health and provide for their safety and welfare measures and other matters connected therewith or incidental thereto.

6.     The Plantation Labour Act, 1951

The Plantation Labour Act, 1951 was enacted to regulate the working conditions of workers employed in plantations, and to provide for their welfare. According to the Act, land refers to any piece of land that measures 5 hectares or more that is used to cultivate tea, coffee, cardamom, cinchona, rubber or any other plant, and which employs 15 or more workers on any day of the preceding 12 months.

7.     The Inter-state Migrant Workmen (Regulation of Employment and Condition of Service) Act, 1979

This Act was enacted by Parliament to regulate the conditions of service of inter-state labourers. The Act’s objective is to protect migrant workers who are deployed outside their native states in India.

8.     The Working Journalists and other News Paper Employees (Conditions of Service and Miscellaneous Provisions) Act, 1955

The objective of this Act is to regulate the services of working journalists and other persons employed in newspaper establishments.

9.     The Working Journalists (Fixation of Rates of Wages) Act, 1958

This Act provides for the fixation of rates of wages of working journalists and matters connected therewith.

10.  The Cine Workers and Cinema Theatre Workers Act, 1981

The Cine Workers and Cinema Theatre Workers Act, 1981 was enacted to provide for the regulation of the condition of employment of certain cine workers and cinema theatre workers and matters connected therewith.

11.  The Motor Transport Workers Act, 1961

The Motor Transport Workers Act, 1961 provides for the welfare of motor transport workers and to regulate the conditions of their work.

12.  The Sales Promotion Employees (Condition of Services) Act, 1996

This Act was enacted to regulate certain conditions of service of sales promotion employees in certain establishments. The establishment in this instance applies to every establishment engaged in the pharmaceutical industry.

13.  The Beedi and Cigar Workers (Condition of Employment) Act, 1966

The Beedi and Cigar Workers (Condition of Employment) Act, 1966 was enacted to provide for the welfare of the workers employed in establishments that were involved in the manufacture of beedi and cigars, and to regulate the conditions of their work and for matters connected therewith.

These 4 Labour Codes were passed by Parliament but are yet to be implemented. These reforms will lead to a stable atmosphere for businesses to invest in and create a win-win situation for both the employer and the employees.

Other Laws that are mandated

A few more laws that are mandated are briefed below:

1.     Apprentices Act, 1961

The Apprentices Act was enacted to regulate and control the training of apprentices in the industry and to utilize the facilities available in the industry for imparting practical training with the view to meeting the requirements of skilled manpower for the industry.

2.     The Employees’ Liability Act, 1938

The Employees Liability Act, 1938 was enacted as a protective umbrella for workmen who bring suits for damages for injuries sustained by them against certain defenses of the employer. The Act has been amended in the year 1970 and is applicable throughout India.

3.     The Environment Protection Act, 1986

The Environment Protection Act, 1986 was enacted with the main objective to provide protection and improvement of the natural environment and for matters connected therewith. The act empowers the Centre to take all such measures as it deems necessary for the protection of the environment.

4.     The Indian fatal Accidents Act, 1855

The Indian Fatal Accidents Act, 1855 was enacted to deal with the recovery of damages for the death of a person caused by a ‘wrongful act, neglect, or default’ of another person.

5.     The Personal Injuries (Compensation Insurance) Act, 1963

This Act imposes a liability on the employers to pay compensation to workmen sustaining personal injuries and to provide for insurance for employers against such liability.

6.     Public Liability Insurance Act, 1991

This is an Act enacted to provide public liability insurance for the purpose of providing immediate relief to the persons affected by accidents occurring while handling any hazardous substances and for matters connected therewith.

7.     The Weekly Holidays Act, 1942

The Weekly Holidays Act, 1942 was enacted to grant weekly holidays to persons employed n shops, restaurants, and theatres without any deduction or abatement of wages. The Act is applicable throughout India but shall come into force only when the state government implements the same through a notification in the gazette.

Conclusion

All these Acts have been enacted with the specific purpose of safeguarding the interests of the workers both in the organized and unorganized sectors. With the Government of India passing the much-awaited Labour Reforms, we can see changes that will empower the worker and at the same time make it easier to do business in India. Human Resources Management teams have to be alert to the ever-changing rules and regulations, and they have to be fully prepared to update these changes as and when they occur.

GetifyHR has been supporting its clients across the country in handling all the relevant laws. With our hugely successful Payroll Outsourcing module, we have been able to handle these laws across industries and have assisted our clients to be fully compliant, always. Our cloud-based outsourcing module is a fully integrated package that can handle all aspects of Payroll including the generation of Payslips, Managing Leave and Attendance, Statutory Compliance requirements, and Recruitment. We are fully prepared to support existing clients and prospective clients in handling the new Labour Codes once the Government implements them. Contact us for more information.

Maternity blog

The Maternity Benefit (Amendment) Act, 2017

Introduction

The Maternity Benefit Act, 1961 was enacted to protect women employees during the maternity period.  The legislation entitles women employees maternity benefit of full paid wages during pre pregnancy and post pregnancy periods.  According to the Act, a woman employee is entitled to 12 weeks maternity benefits.

This has now been amended by the Maternity Benefits (Amendment) Act, 2017 passed by parliament on March 09, 2017.

Maternity Benefit (Amendment) Act, 2017

The provisions of the Maternity Benefit (Amendment) Act, 2017 is effective from April 01, 2017.  The Act is applicable to all establishments that include factories plantations, mines, Government establishments, shops & establishments or any other establishment as may be notified by the Central Government.  Any such establishments that employ 10 or more employees are liable to follow this Act.   As per the amendment, the maternity benefit period has been raised to 26 weeks from the previous 12 weeks.

Eligibility: 

To be eligible to avail the benefit of this Act, a woman must have been employed in an establishment for a period of at least 80 days in the past 12 months. 

The Key Highlights

Increase in Maternity Benefit period

The period of paid maternity leave which is the benefit provided by the Act has been increased from 12 weeks to 26 weeks.  Prior to the amendment, a pregnant woman could avail the benefit for 6 weeks before the date of expected delivery.  Through this amendment, this has been increased to 8 weeks.  The balance 18 weeks can be availed after delivery.

Benefit for 3rd delivery

As per the Amendment the paid maternity period of 26 weeks is only available for the first two children.  Any deliveries beyond the 2nd child will be eligible for only 12 weeks of Maternity Benefit of which not more than 6 weeks can be availed before the date of expected delivery.

Rules pertaining to Adoption or Surrogacy

In the case of a woman employee who adopts a child below the age of 3 months or a commissioning mother (a biological mother who uses here egg to create an embryo implanted in a surrogate mother) will be entitled to Maternity Benefit for a period of 12 weeks from the date the child is handed over to the adopting mother or the commissioning mother.

Establishing a Creche facility

As per the Act, it is mandatory for every establishment have 50 or more employees to have a crèche facility either separately or along with the other common facilities.  The crèche premises should be located within the prescribed distance from the establishment.  The beneficiary woman is allowed 4 (four) crèche visits per day and this includes the interval for rest allowed to her.

Work from Home

Given the present situation where work from home has become the norm, the employer may allow the beneficiary to work from home post the period of Maternity Benefit.  The terms of working can be mutually agreed to between the employer and the woman employee.

Keep the employee informed

The Act requires the employer to provide the woman employer all the relevant information about the maternity Benefit Act during the initial period of appointment.

Conclusion

The Maternity Benefit (Amendment) Act, 2017 is an enactment that provides protection for women employees to exercise here rights to continue with her profession during the maternity period.  This right is guaranteed under the Indian Constitution.  GetifyHR provides excellent consultation to companies regarding all aspects of the Maternity Benefit Act and Amendments.  Our outsourcing package is been perfectly modified to handle all the changes brought on by the amendment and is also future ready for any more changes.

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The government has released four new Labour Codes

The much-discussed New Labour Codes which were to be implemented on 1st July 2022 has been postponed as of now. These 4 Labour Codes are an amalgamation of the 29 Labour laws. According to the Ministry for Labour and Employment, only 23 states and UTs have released the draft rules under the Code of Wages.

The introduction of the new Labour Codes brings about much-needed reforms in the working conditions of employees in the country. They bring about changes relating to wages, social security, labour welfare, health, safety, and working conditions of employees.

Let us now delve into a few takeaways from these new codes when they are implemented by the Government.

Capping of Daily Working hours

The new labour codes allow the capping of daily working hours from the current 8 to 12 hours. However, the weekly work hours remain capped at 48 hours. This means that if any employee prefers a 4-day work week, he or she can increase the daily working hours to 12 and generate the required working hours for the week.

The new code also allows an increase in maximum overtime hours from 50 hours (as per the Factories Act) to 125 hours in any quarter across industries. The law will enable companies to adopt the 4-day week and employ workers on the weekend, if necessary.

However, the 4 day week could also be a double-edged sword. On the one hand, the employees would benefit from a more extended rest period, but on the other hand, it entails longer working hours during the weekdays which may negatively affect the workers’ health. In the same vein, the increase n overtime may enhance the earnings but it will be at the expense of longer working hours or probably working on weekends as well.

Changes in take-home salary

The take-home salary may get reduced especially for employees of the private sector. On implementation of the new codes, the basic salary would be capped at 50% of the gross salary. However, it proposes to increase the PF contributions of both the employees and employers. The changes will also bring about an increase in the retirement corpus and gratuity amounts. This will be beneficial to all employees during their retirement days.

Changes in leave availed

The new codes hope to rationalize the leave an employee can avail of during the course of their employment, carry-forward of leave to a succeeding year, and encashment of leave during the period of employment. The new labour codes have reduced the eligibility requirement for leave from 240 days of work to 180 days of work in a year.

The effect on the unorganized sector

The New Labour codes allow workers of all sectors including the unorganized sector to avail the benefits of the ESIC scheme. A national database of workers in the unorganized sector will be created through registration on a portal under the new labour codes. This will provide medical care to the employees and their family members who work in the unorganized sector.

The ESIC infrastructure that includes the hospitals, dispensaries, and branches is being expanded up to the district levels. On implementation, all 740 districts will get this facility.

Any worker engaged in hazardous work would be given the benefit of ESIC.  Similarly, gig workers engaged in new technology will also become eligible to become ESIC members. Plantation workers will also be eligible for its benefits. Institutions involved in hazardous work have to compulsorily register for ESIC.

Conclusion

These reforms hope to empower the workers in the organized and unorganized sectors. This will herald a major change in labour laws in the country and bring in the much-needed changes that have been discussed about for decades.

GetifyHR is fully prepared to guide our valued clients about all aspects of the new labour codes as and when they are implemented.  Our professional team is fully knowledged about these changes and is capable of providing immediate solutions to any doubts and queries regarding these laws.  Our outsourcing payroll package will also be able to support these changes so that our associates can be fully compliant during the proposed changeover to the new laws.

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EPF & ESI – Companies that are eligible? How to Register? What documents are required?

Introduction:

The constitution of India ensures social-economic justice to the people and establishing of a Welfare State.  The inequalities in the society were slowly being dismantled by regulations brought in by the government.  One such regulation was to introduce a long-term savings scheme for employees, especially in the Private sector, that would support them in retirement or superannuation.  This regulation is the Employees Provident Fund & Miscellaneous Provisions Act, 1952.

With the view to provide further security to the employees in times of adversity like ill-health or accidents, the government introduced the Employees State Insurance (ESI) scheme in the year 1948. Both these acts have gone a very long way in supporting the employees in the organized sector when they are out of job and in times of adversity.

The EPF Act

EPF Act:  the EPF act ensures that all employees have to contribute a percentage of their basic salary to the EPF every month.  An equal is contributed by the employer towards the fund. The amount so contributed would earn interest and can be withdrawn under certain conditions.  The scheme is managed by the Employees Provident Fund Organization (EPFO).

Eligibility – for Employer

Any organization that has 20 or more employees is required to register with the EPFO and contribute towards EPF.  However, subject to certain conditions even organizations employing less than 20 employees are permitted to register and contribute to the fund.

Eligibility – for Employee

Any employee drawing a monthly salary of less than ₹15,000/- has to compulsorily become a member of the EPF.  If any employee drawing a monthly salary more than ₹15,000/- desires to become a member he may do so subject to getting the approval from the Asst. PF Commissioner and the Employer.

How to Register?

EPF Registration is mandatory for all organizations that meet the eligibility criteria of 20 or more employees.  The registration must be obtained within one month of the attaining the minimum strength.  Failure to register will attract penalties.

The registrations can be made offline or online through the official website of the Employees Provident Fund Organization.  Online registration is an early process when you have all the required documents/information readily available, the registration form can be downloaded from www.epfindia.gov.in.

The following information has to be furnished:

Name and address of the Organization

Details of Head Office and Branches if any

Date of Incorporation/Registration of Firm

Details of ownership:  Designation and address of Directors or Partners

PAN details

GST details

Contact details:  email ID and mobile number of authorised person

Name of contact person, Address, Date of Birth, Gender, PAN, Designation and date        of joining

In addition to these, details regarding the type of company have to be furnished.

For Proprietorship Firm

Registration of Firm with date of registration

Name of the Employer

PAN details

Identify proof

Address of the Proprietor (Official)

Address of the Proprietor (Residential)

Contact Number

For Co-operative Societies (Trusts/Societies)

Certificate of Incorporation

Memorandum of Association

Articles of Association

PAN

Address Proof

For Partnership Firm

Name and address

Identity proof of Partners

Certificate of Registration

Details of Partners

For Limited Liability Partnership firm (LLP)

Certificate of Incorporation

Identify proof of Directors

Details of all Directors

Address Proof and ID Proof of all Directors

Memorandum of Association

Article of Association

Other Businesses

If Factory, then the Factory license and date have to given

First Sale Bill

First Purchase Bill towards machinery

Bank name, account Number, IFSC, address

Salary details

Employee details

Number of employees employed, Gender, Type of work

Salary details

Documents Required for ESI Registration

  1. Company Pan Card (Scan Copy & Hard Copy)
  2. Partners/Directors Pan Card (Scan Copy & Hard Copy)
  3. Current Account Cancelled Cheque Leaf (Scan Copy & Hard Copy)
  4. Company Registration Copy (ROC / Partnership Deed)
  5. Partners Details (Name, DOB, Father Name, Partnership starting date)
  6. Employees Aadhaar Card Copy
  7. Employees Bank Passbook Copy
  8. Digital Signature of Authorized Signatory
  9. Specimen Signature
  10. EPF & ESI Application forms
  11. GST Registrations Copy
  12. Rental/Lease Agreement

Steps for Online Registration

Be prepared with all the required documents

Login to the EPF website @ epfindia.gov.in

Read the instructions thoroughly

Fill in the required information

A Digital Signature Certificate of the Authorised Signatory – Proprietor/Partner/Director

Verify their correctness and then submit the form online

Type in the CAPTCHA code and click on “GET PIN” option

Enter the PIN that you receive on your registered mobile or email ID

Click on the SUBMIT button

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The ESI Act, 1948

The Employees State Insurance (ESI) scheme is a welfare scheme for the benefit of employees in the organized sector.  The scheme was introduced by the Government under the ESI Act, 1948 with the objective of providing social-economic protection to employees during adverse situations brought on by ill-health or accidents.  The funding for the scheme comes from the contribution from the employee and employer.  Under this scheme, the employer contributes 3.25% of the monthly salary + dearness allowance, whereas the employees contribute only 0.75% of the salary.  Any establishment employing more than 10 employees (20 in some states) have to register with the Employees State Insurance Corporation (ESIC), an autonomous body under the Ministry of Labour & Employment, Government of India.

Eligibility

Any organization that employs 10 or more (20 or more in some states) is required to register with the ESIC and contribute towards ESI.  The Act however applies for both the employer and the employee.  In case the wage of the employee is less than Rs:176/- per day then the employee is exempted from contributing to the fund.  All employees whose salary does not exceed Rs:21,000/- are eligible to be beneficiaries to the scheme.

The ESI Act covers the following establishments:

  • Shops, Road Transport organizations, Cinema Houses/Theatres, Newspaper Establishments, Non-seasonal Factories, Hospitals & Medical Institutions, Educational Institutions, Restaurants & Hotels. If any of these establishments employ 10 or more persons, they have to register with ESIC.

How to Register?

Registration can be manual or online.  However, now the ESIC registration is fully online.  The steps involved in online registration are given below:

Step 1:  Here you have to login to the ESIC portal @ www.esic.in.  Click on the “Employer Login” option on the home screen.  On the next page click on “Signup” button and fill in the details called for and then submit the form.

Step 2:  The employer will receive a confirmation mail to the email address and mobile number provided earlier at the time of sign-up.  This email will contain the username and password details for registering as an employer under the scheme.

Step 3 :  In this step you have to fill-up the Registration Form-1.  For this you have to login to the ESIC portal and click on the “Employer Login” option and enter the User name and password received in your email or mobile.  You will get redirected to the “New Employer Registration” option.  Click on the option and you will be asked to select the “Type of Unit” from the dropdown list and click on the “Submit” button.

The Employer Registration Form_1 will appear on the screen and all the details required have to be filled in.  The details include Employer details, establishment details, and employee details.  Once this is completed, click on the “Submit” button.

Step 4 :  In this step you have to make the Payment for Registration.  Once the Registration Form is submitted, the “Payment of Advance Contribution” page will be open.  Fill in the amount to be paid and select the payment mode.  Payment of advance contribution for 6 months is required to be remitted.

Step 5 :  This is where you will be sent a system generated “Registration Letter”.  This will contain a 17 digit Registration Number and is a valid proof of registration of the employer under the ESI Scheme.

Documents Required for ESI Registration

The following documents have to be scanned and uploaded

  1. Company Pan Card (Scan Copy & Hard Copy)
  2. Partners/Directors Pan Card (Scan Copy & Hard Copy)
  3. Current Account Cancelled Cheque Leaf (Scan Copy & Hard Copy)
  4. Company Registration Copy (ROC / Partnership Deed)
  5. Partners Details (Name, DOB, Father Name, Partnership starting date)
  6. Employees Aadhaar Card Copy
  7. Employees Bank Passbook Copy (If Gross is below 21 thousand)
  8. Digital Signature of Authorized Signatory
  9. Specimen Signature
  10. EPF & ESI Application forms
  11. GST Registrations Copy
  12. Rental/Lease Agreement

These two Acts have provided the employees and their dependents in the organized sector solace during times of adversity like ill-health and accidents and when they are in retirement.  They have been a great boon for such employees.