04-06-26 New wage blog

NEW WAGE CODE IN INDIA: Impact on Salary and Compliance explained.

by with No Comment BusinessLabour ActNews & Updates
Introduction

Labour Laws refer to the legal framework that regulates and controls the relationship between employers and employees.  These laws govern various aspects of employment such as wages, working hours, leave policies, health and safety measures, social security, and Industrial relations.

Independent India has a highly complex framework of Labour Laws.  The first major Act to be introduced was the Factories Act of 1948. This Act regulates the working conditions in factories and includes safety and health measures, working hours, and leave policies.  Other Key labour laws include the Industrial Disputes Act, the Payment of Wages Act, the Minimum Wages Act, the Employees state Insurance Act, and the Employees’ Provident Fund and Miscellaneous Provisions Act.

Over the years, successive governments have continued to introduce new Labour Laws and amendments to update existing ones to be in consonance with existing economic and social conditions.

The 2nd National Commission on Labour (2002) had recommended that the existing Labour Laws should be broadly grouped into 4 Labour Codes.  Based on these recommendations, the Ministry of Labour and Employment, Government of India, had introduced 4 Bills in 2019 to provide a simpler and more coherent system to regulate and control the relationship between the employers and employees.

The Bill consolidates 29 existing labour laws into 4 Labour Codes, and these are:

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

Through the enactment of the 4 Labour Codes, 1228 sections were amalgamated into 480 sections, and 1436 rules were reduced to 351.  31 multiple Returns have been replaced by a single electronic return and the number of forms have reduced from 181 to 73, and the Registers to be maintained by the employers have reduced from 84 to just 8.

In this article, we explain the features of the Code on Wages, 2019, and highlight its impact on salary and compliance.

The Code on Wages, 2019

The Code of Wages is a well formulated effort to regulate wages and bonus payments in all forms of employments be it any industry, trade, business, or manufacturing industry.  The Code on Wages, 2019 amalgamates 4 existing Acts, namely, the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act,  1965, and the Equal Remuneration Act, 1976.

The main focus of the Code is to balance the rights of employees and facilitate ease of compliance for employers.  It safeguards the interests of employees through universal minimum wages, ensuring dignity and timely payment of wages.  The Code supports women employees through equal pay and representation, thus fostering inclusive participation.  These measures will generate greater employment and promote workplace equity, and give a boost to productivity and labour welfare, thus strengthening economic growth, generate employment and promote workplace equity.

Minimum Wages and National Floor Wage

One of the most important changes is the universalization of Minimum Wages and the introduction of the National Floor Wage.  As per the Code, all employees have a statutory right to Minimum wages.  The Central Government will fix the National Floor Wage based on the minimum living standards, and the State Governments can set the Minimum Wages.  However, no state government can set a minimum wage that is below the National Floor Wage.

Floor Wage and Compliance

The National Floor Wage not only stabilizes labour costs by creating a universal wage baseline for organizations across multiple states, but also ensures simplified compliance.  By ensuring that no state can set its Minimum Wage below the floor level, it reduces regional wage disparity and compliance risks of tracking multiple fragmented state laws.  These changes allow companies to standardise their national payroll structures and HRMS Logic, thus simplifying administrative tasks and providing a clear and strong foundation for financial planning and cost projections across multiple locations.

Equal Pay for Equal Work

One of the important features of the Code is its support for women workers by ensuring equal pay for equal work. This will ensure that there is discrimination among employees on the basis of gender (including Transgender identity) in matters relating to wages for the same work or work of a similar nature.  This obligation has been extended to all genders in respect of conveyance allowance, house rent allowance, and any remuneration payable under an award or settlement.

The Code not only promotes workplace quality, but also mandates that overtime work must be compensated at a rate of at least twice the normal rate of wages, thus providing a uniform standard for all workers.

The Mandatory 50% Rule

One of the most important provisions in the Code on Wages is the mandatory 50% rule.  The Code stipulates that the core statutory components of pay, i.e., Basic Pay, Dearness Allowance, and Retaining Allowances, must constitute 50% or more of the total Cost to Company (CTC).  This means that the excluded components of remuneration, such as House Rent Allowance (HRA), Conveyance Allowance, Overtime Allowance, retirement benefits including PF & NPS, and other Tax-friendly Allowances, must not exceed 50% of the employees’ total remuneration (CTC).

The 50% rule is a mandatory provision that restructures the salary by ensuring that the core salary component (Basic Pay, DA etc) are at least half of more of the total take home salary (CTC).  The effect is two-sided.  On the one hand, the monthly take-home salary is likely to decrease marginally because statutory deductions like PF increases as they are calculated on a higher basic pay.  On the other hand, the employees’ future savings and security shows significant increase as the higher basic Pay boosts mandatory PF contributions, thus generating a substantially higher Gratuity payout on retirement, resignation, or termination.

Payment of Wages – Timeline

The employer is mandated to pay wages to all employees within the timeline fixed for each period.  This will enable all employees to receive their wages on time, thus providing wage protection.  The wage payments have to be digitized through a Bank account & Electronic mode. The employer is required to issue wage slips to the employees as per the time fixed for each wage period.  The same is tabulated below:

Wage Period Payment Schedule
Daily wage basis At the end of the shift
Weekly wage basis On the last working day
Monthly wage basis Less than 1,000 employees Before the expiry of the 7th day of the succeeding month

1,000 or more employees Before the expiry of the 10th day of the succeeding month

The responsibility of paying all dues rests with the employer, and in case of a claim relating to non-payment, the onus is on the employer to produce the proof.

In case of resignation or retrenchment, termination, or becoming unemployed due to the closure of the unit, wages shall be paid within 2 working days.

Payment of Wages

The employer cannot make any arbitrary deductions from the wages of employees except those that are specifically authorised by the Code.  Under the Code, an employee’s wages can be deducted on the following grounds:

  1.  Fines imposed.
  2.  Absence from duty.
  3.  Towards accommodation provided by the employer.
  4.  Towards recovery of Advances/Loans given to the employee.
  5.  Towards Income-tax or other statutory levy.

The total amount of deductions shall not exceed 50% of the employee’s total wage in any wage period. In case the authorized deductions exceed 50%, it cannot be deducted in full in that wage period; instead the excess amount must be recovered in the subsequent pay periods as prescribed by law.

Compliance

The Code incentivizes organizations by reducing compliance burden and transaction costs.  Terms like “Wages”,  “Worker”, “Employees”,  “Employers”,  “Establishments”,  “Appropriate Government”, etc have been given a uniform and common definition.

Some important Definitions
  •  Wages:  All remuneration by way of salaries, allowances or otherwise that is payable to a person by the employer in respect of his/her employment, subject to all terms of employment being fulfilled.
  •  Establishment:  A place where any industry, business, trade, manufacture or occupation is carried on and includes Government Establishments.
  •  Workers:  Any person (except an Apprentice) employed in any industry to do any manual, skilled, unskilled, operational, technical, clerical, or supervisory work for hire or reward.  The term also includes working journalists and sales promotion employees.
  •  Employee:   Any person employed on wages by any establishment to perform any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical pr clerical work for hire pr reward.
  •  Employer: A person who employs others directly or through any other person, or on his behalf or on behalf of any person, one or more employees in his establishment, and where the establishment is carried on by any department of the Central or the State Government or Local Authorities, the head of department, the chief executive of the local authority.
  •  Appropriate Government:  Refers to an establishment carried on by or under the authority of the Central Government, and includes railway, mines, oil fields, major ports, air transport, telecommunications centre, banking and insurance company, or a corporation or other authority established by a Central Act or CPSU’s/Autonomous bodies established by the Central Government.

The Code incentivizes businesses by reducing compliance burden and transaction costs.

  • By bringing uniformity in the common definition of frequently used terms, it has reduced complexity in compliance.
  • The number of authorities in the tripartite boards has been reduced, and this will be implemented only through 1 Rule instead of 8 different rules that exist at present.
  • The options for filing and maintenance of registers, returns, and forms electronically and prescribing one template for the registers, returns, and forms instead of multiple ones at present make compliance hassle-free.

The Code brings cultural changes in the Inspection system to reduce corruption & arbitrariness and infuse transparency.

  • The Inspector-cum-Facilitator is not only entrusted with the job of inspecting and imposing fines, but is also tasked to provide information and advice to the employers.
  • The introduction of web-based inspection schemes enables calling for information under the Code electronically for inspection and conferment of jurisdiction of inspector-cum-facilitator based on randomized selection of inspection.
  • The Code mandates Inspector-cum Facilitator to provide prior opportunity to the employer to rectify and comply with the provisions of the Code by way of a written direction before initiating prosecution. On compliance, the Code stops initiation of prosecution proceedings against the employer. This provision is meant to assist employers who have committed an offence under the Code for the first time and is not applicable to repeat offences.
Bonus Determination
  • Employers are mandated to pay Bonus to every employee who draws wages up to a limit set by the appropriate government and has worked for at least 30 days in the accounting year, i.e., the year commencing on the 1st day of April.
  • The annual minimum Bonus will be at least 8.33% and maximum up to 20% of the wage earned by the employee.
  • The Wage Code has not prescribed any threshold for the applicability of statutory bonus provisions, and appropriate governments are empowered to prescribe such thresholds. For an organization with multiple branches in more than one state, this may create compliance issues as each state may prescribe different thresholds. However, employers are to maintain the status quo and continue with the statutory bonus coverage as is existing till a new threshold is announced.
  • Termination of service on the ground of sexual harassment is now identified as an additional ground for disqualification from the statutory bonus.
Cognizance of Offences
  • The Appropriate Court shall take cognizance of any offence punishable under this code only on a complaint made by..
      • Authority/Official of the appropriate government or
      • By any employee or
      • A registered Trade Union or
      • An Inspector-cum-Facilitator
  • No court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the First Class shall try the offences under the Code.
Penalties – Power to impose Penalties
  • The appropriate Government will appoint officers not below the rank of Under Secretary, who will impose penalties for the offences.
  • The Officer is authorised to hold an enquiry and to summon and enforce the attendance of any person acquainted with the case to give evidence or to produce any documents.
  • If on such enquiry, the Officer is satisfied that the person has committed an offence, then he may impose such penalty as he deems fit.
Standardized Penalty Provision

The Code has standardized penalty provisions, introduced the concept of “graded penalty,” and has enhanced penalty provisions, especially the fine amount manifold. This is done to act as a strong deterrent and is expected to improve compliance and the effective application of the provisions.

S.No Type of Offence Penalties
1 First offence:  Pay the employee lesser that the amount due under the Code Punishable with fine which my extend up to ₹ 50,000/-
2 Repeat offence:  Similar to 1 above within 5 years from date of the commission of the first significant offence Punishable with imprisonment for a term which may extend to 3 months or with fine which may extend to ₹ 1,00,000/-
3 First Offence: Contravenes any other provisions of the Code or any rule made or order passed or issued there under Punishable with fine which may extend to ₹ 20,000/-
4 Repeat Offence:  Similar to 3 above within 5 years from the date of the commission of the first or subsequent offence Punishable with imprisonment for a term which may extend to 1 month or with fine which may extend to ₹ 40,000/-
5 Offences on non-maintenance or improper maintenance of records in the establishment Punishable with fine which may extend to ₹10,000/-
Maintenance of Records, Returns and Notices
  • The Code mandates that every employer of an establishment shall maintain a register of persons employed, muster roll, wages, and other provisions as prescribed in the Code.
  • Every employer shall display in a prominent place on the Notice Board an abstract of the Code on Wages, category-wise wage rates, wage period, day or date, and time of payment of wages, and name and address of the Inspector-cum-Felicitator.
  • Every employer is mandated to issue wage slips to all employees.
Conclusion

The Code on Wages is a well-intentioned piece of legislation that has been widely accepted by the industry.  The Code aims to balance the interests of the employers and employees.  India’s economic growth and development are inextricably tied to the productivity and well-being of its workforce.

As the nation continues its economic march upwards, the importance of progressive labour laws that safeguard the workers’ rights while fostering a conducive business environment cannot be overstated.   The Code on wages is a decent attempt to replace the obsolete provisions of the earlier laws.  The Code will help in removing the multiplicity of definitions and authorities.  Compliance is maintenance of records and registers, filing of returns, and display of notices will be substantially reduced through this legislation.  The cost of compliance is expected to reduce, and it is hoped that it will eliminate any litigation based on a complex definition of wage, worker, employee etc.

The provisions of the Code inspire confidence in the business community and for all workers, as it will help in bringing all workers under the ambit of the law.  There will be a lot of challenges in the coming days as the respective state government has to address the issues and bring their own laws in consonance with the Code of Wages.  Implementation may pose challenges, but the fact remains that the Code on Wages is a piece of legislation in the right direction and in accordance with the changing times.

We at Getify are fully geared to assist all our clients in implementing the new Code on Wages. As a highly tried and trusted Payroll Processing & HR Management service provider, we can streamline your entire payroll process to be in alignment with the new rules and regulations.

Employee Linked Incentive (ELI) Scheme – Benefits, Eligibility & Impact

Employee Linked Incentive (ELI) Scheme – Benefits, Eligibility & Impact

by with No Comment Labour ActNews & Updates
Introduction:

The Employee Linked Incentive (ELI) Scheme is a major initiative launched by the Union Government in the Union Budget 2024-25, to address the country’s growing unemployment challenges. India is currently facing high levels of unemployment among the youth, underemployment, and a mismatch between the skills and industry demand. The ELI scheme is proposed to stimulate the private sector to participate in job creation and workforce development. The scheme seeks to incentivize and motivate employers to hire more youth, especially freshers while encouraging skill development and enhancing job retention.

The ELI Scheme is a package of 5 schemes to create more job opportunities and improve the livelihood of people across the country. The scheme envisages providing employment, skilling, and other opportunities for 4.1 crore youth over five years with a total central outlay of ₹ 2 lakh crore. Out of this, 1.07 crore is allocated to implement Plan A, B, and C, ₹63,000 crore for Plan D to provide an Internship programme for skilling 1 crore youth in 5 years, and ₹30,000 crore for Plan E for upgrading of Industrial Training Institutes (ITI’s) across the country.

The package highlights the government’s strong commitment to tackling unemployment and boosting economic recovery, especially after the challenges posed by COVID – 19 pandemic.

The Objectives:

The ELI Scheme hopes to address the country’s growing unemployment by incentivizing the private sector for job creation, skill development, and retention.

The main objectives are:

  1. Promote the employment of youth: The scheme primarily aims to reduce unemployment among the youth by encouraging organizations to recruit youngsters especially those joining the workforce for the first time.
  2. Encourage job retention: The ELI scheme has features to encourage job retention by offering incentives to employers who maintain higher workforce levels over a period of time, especially those who recruit beyond a specified threshold.
  3. Encourage Skill Development: Skilling has been the Government’s objective, and this initiative aligns with this aim. This is achieved by encouraging skill development among the youth, by motivating employers to invest in training and skill development of their workforce.
  4. Enhance Formal Employment: Historically, industries have depended on informal labour. This scheme aims to formalize employment by incentivizing employers who transition workers into the formal economy by providing social security such as Provident Fund (PF) coverage.
  5. Boost employment in the Manufacturing Sector: The Scheme has features that target the Manufacturing Industry to boost job opportunities by promoting the recruitment of first-time-employees.
  6. Reduce Economic Disparity: the Scheme aims at reducing economic disparity and improve social mobility by prioritizing on job creation and skill enhancement for youth especially those from the underprivileged backgrounds.
  7. Assist Employers in recruitment: The programme aims to lower the expenses of employers and motivate them to increase their employment levels by providing financial assistance such as reimbursing employers for their PF contributions towards new hires.
The Schemes

The Employment Linked Incentive Schemes encompass 5 programs aimed at employment generation, retention, workforce formalization, skill development, and enhancing full compliance with all statutory rules and regulations.

The total outlay for the entire scheme is ₹2 lakh crores for 5 years. Out of this, ₹1.07 lakh crore is allocated for Scheme A, B, and C to generate employment for 3.1 crore new employees, ₹ 63,000 crore is allocated for Internship Programme for skilling 1 crore youth in 5 years, and ₹30,000 crore for upgrading of Industrial Training Institutes (ITI’s)

Scheme A: First-time Employees Support Scheme

This scheme is designed for youth who are entering the formal workforce for the very first time. All newly joined employees in the formal sector will receive one month’s salary up to ₹15,000 to be disbursed through direct transfer in 3 installments. The first-time employment scheme is expected to benefit around 210 lakh youth over 2 years. The Central outlay for the scheme is ₹23,000 crores. Enrolment is open for 2 years and the expenditure coverage extends to 3 years. The subsidy paid under this scheme supports employees and boosts the hiring of first-time employees by employers.

The salient features of the scheme are briefed below:

  1. Applicable to all newly joined employees in the formal sector.
  2. Applicable to newly joined employees enrolled in EPFO and drawing a wage or salary of less than ₹ 1 lakh per month.
  3. Eligible employees will receive a subsidy of up to ₹ 15,000 directly in 3 installments.
  4. The eligible employee has to mandatorily undergo a financial literacy course to receive the second installment.
  5. The employer has to refund the subsidy to the employee if the employment ends within 12 months of recruitment.
  6. The scheme will be applicable for 2 years after enrolment with EPFO.
Scheme B: Incentives for Job creation in the Manufacturing Sector

This scheme is designed to enhance employment in the manufacturing sector. The scheme rewards both employers and first-time employees who contribute towards EPFO. The incentive will be paid at a specified scale to both the employee and employer directly based on the EPFO contributions made in the first 4 years of employment. The incentives will be paid partly to both the employees and employers for 4 years as detailed below:

Year Percentage
First year 24% shared equally between employee and employer
Second year 24% shared equally between employee and employer
Third year 16% shared equally between employee and employer
Fourth year 8% shared equally between employee and employer

This scheme is aimed at incentivizing employment in the manufacturing sector and is expected to benefit 30 lakh youth and their employers. ₹52,000 crore has been earmarked for this scheme. The program has a 2 year enrolment plan with the expenditure phase spanning 6 years. This will allow sustained support that will boost long term employment in the manufacturing sector.

The salient features of the scheme are briefed below:

  1. The scheme applies to first-time employees in the manufacturing sector.
  2. All corporate and non-corporate employers who have a 3-year track record with EPFO contributions will be eligible.
  3. Employees who contribute towards EPFO and who earn a wage or salary of up to ₹1 lakh per month will be eligible for this scheme.
  4. The employees must be directly employed by the organization that pays the salary.
  5. Where the salary of the employees exceeds ₹25,000 per month, the incentive will be calculated at the capped amount of ₹25,000 per month.
  6. If the employment ends within 12 months of recruitment, then the employer will refund the subsidy to the employee.
  7. The scheme requires the employer with a 3-year EPFO contribution to hire either 50 new employees or 25% of their workforce, whichever is lower to qualify for the incentive.
  8. Employers should maintain the enhanced level of employment throughout, failing which they will not receive the subsidy.
  9. The incentive will be paid over 4 years, shared equally between the employee and the employer as per the table given above.
  10. The scheme will apply to an employee for 2 years after enrolment with EPFO.
Scheme C: Support to Employers for EPFO contributions

The third scheme under the Employment Linked Incentive Scheme is to support employers who contribute towards EPFO. This is a fully employer focussed scheme that covers every additional employment within a salary of ₹1 lakh per month within all sectors.

The salient features of the scheme are briefed below:

  1. The scheme incentivizes employers who increase their workforce above the baseline (the previous year’s number of EPFO employees) by at least 2 employees for companies with less than 50 employees or 5 employees for companies with 50 or more employees and maintain this level.
  2. The scheme applies to employees earning up to ₹1 lakh per month.
  3. New employees need not be newly enrolled with EPFO.
  4. The EPFO will reimburse contributions paid by the applicable employer for the additional employees hired in the previous year up to ₹3,000 per month for 2 years.
  5. When the employer creates more than 1000 jobs, reimbursement will be done for every quarter.
  6. The subsidy will continue for the 3rd and 4th years on the same scale as employers benefit provided under job creation for manufacturing sector.
  7. The subsidy provided under this scheme is in addition to the subsidy provided under the first-time employment scheme.
  8. The scheme is applicable for 2 years after joining employment.

The Central outlay for this scheme is ₹32,000 crores and is expected to benefit 50 lakh youth. The program has 2 year enrolment duration and the expenditure duration is for 6 years.

Scheme D: Internship Scheme with Top Companies

The Internship Programme envisages skilling 1 crore youth aged between 21 to 24 years over 5 years in top 500 companies. The total outlay for the scheme is ₹63,000 crores.

The salient features of the scheme are briefed below:

  1. The duration of the Internship is 12 months with a monthly allowance of ₹5,000 and a one-time assistance of ₹6,000.
  2. Unemployed youth in the age group of 21-24 are eligible.
  3. The government will contribute significantly to the allowance costs, while the administrative and training expenses will be borne by the Company through CSR funding.
  4. Priority will be given to candidates with lower employability metrics.
  5. Actual skill training is mandatory with a focus on hands-on-work over classroom learning.
Scheme E: Skilling programme and upgradation of ITI’s

This is a scheme to skill youth with state and industry collaboration. This centrally sponsored scheme has a total outlay of ₹60,000 crores, where the Central Government spends ₹30,000 crores, the State Government spends ₹20,000 crores and the Industry ₹10,000 crores (this includes CSR funding).

The salient features of the scheme are briefed below:

  1. The objective is to skill 20 lakh youth so that industry standards can be met and employability enhanced.
  2. The programme envisages the upgradation and revamping of 1000 Industrial Training Institutes (ITIs), in a “hub and spoke” model with 200 hubs and 800 spokes nationwide with the cooperation of the industry.
  3. A complete Re-design and review of existing courses.
  4. Introduction of New courses with 1 and 2 year courses offered in all the 1000 ITI’s
  5. Offering specialized short-term courses in Hub ITI’s.
Key Takeaways of the Employment Linked Incentive Schemes

The ELI Scheme offers several key benefits and they are:

  1. Promoting Job Creation: the ELI scheme acts as stimulus to companies to hire more employees by offering incentives tied to EPFO Contributions. This will stimulate industrial growth and promote employment in various sectors.
  2. Supports fresh graduates and new entrants: The first-timers scheme helps to integrate fresh graduates and new entrants into the formal workplace. This scheme reduces the financial strain and ensures a smooth entry into the job market by providing a stable income at the start of a career.
  3. Strengthens financial security for employees: By incentivizing formal employment through EPFO contributions, the scheme ensures access to retirement benefits thus enhancing the long-term financial security of employees.
  4. Encourages workforce expansion for employe₹ The job creation in the Manufacturing sector scheme encourages employers to expand their workforce by linking incentives to EPFO contributions. This reduces the financial barrier for employers to hire more workers, helping the companies to meet the increasing demand and grow in the process.
  5. Reduces the financial burden of the employe₹ The Support to Employers scheme reimburses a portion of the EPFO contributions for newly hired employees. This specifically helps Small and Medium-sized Enterprises (SMEs) to reduce the cost of hiring, making it more viable for SMEs to expand their workforce.
  6. Boosts Economic growth: By creating more job opportunities and incentivizing businesses to hire, the ELI scheme ensures that the growth driven by other manufacturing incentives such as the PLI scheme, translates into actual long-term employment gains.
  7. Encourages the formalization of the workforce: Incentivizing the formal sector employment, this helps to transition workers from the informal sector to the formal sector, providing greater stability and access to social security benefits.
Conclusion

The Employment Linked Incentive (ELI) Scheme is a strategic approach by the Central Government to address the unemployment problem in the country and to drive economic growth. The incentives targeted at both employers and employees aim to create a more inclusive and dynamic job market. The initiatives under the ELI scheme will not only support workforce expansion and formalization but will also significantly enhance the financial relief to employers, especially SMEs, thus making it easier for them to grow and hire.

GetifyHR, with its vast experience in Payroll processing and HR Management, assures all stakeholders of our continued support in helping them to make use of these schemes to foster growth and job creation, and to ensure a thriving and sustainable business in the long term.

EPFO’s new flexible savings scheme

EPFO set for a Major Upgrade: Flexible Savings and Instant PF withdrawals through ATMs

by with No Comment Labour ActNews & Updates

The Employees’ Provident Fund Organization (EPFO) is poised to introduce ground-breaking upgrades through EPFO 3.0 slated for roll-out in June 2025. The upgrade will allow Provident Fund (PF) users to withdraw their savings using ATM cards thus bringing EPFO services closer to the banking experience. Other features include a revamped Mobile App, flexible pension options with enhanced digital security, faster claims, and better service. EPFO 3.0 represents a major leap that introduces a host of new features and reforms aimed at simplifying processes, reducing paperwork, and empowering employees to manage their PF accounts independently.

What is EPFO 3.0?

EPFO 3.0 is the upcoming phase of digital transformation introduced by the EPFO to make PF management more user-friendly, transparent, and efficient. Once these reforms are rolled out, employees can self-correct personal details such as name, date of birth, and marital status directly through the EPFO Portal. This will significantly reduce administrative time delays.

In addition to this, Provident Fund account transfers will no longer require verification by the employer due to the introduction of Aadhaar–based OTP authentication. Another rather interesting upgrade is the introduction of an EPFO ATM card that enables instant PF withdrawal through ATMs. The upcoming EPFO 3.0 Mobile app provides on-the-go account management, faster claim processing, and seamless access to retirement savings. Once rolled out, the system is expected to benefit millions of salaried employees who contribute to the EPF scheme.

Salient features of EPFO 3.0

EPFO 3.0 introduces a range of innovative features to streamline processes, enhance user convenience, and reduce administrative delays, thus empowering employees to manage their PF accounts.  This Employee Provident Fund Update is poised to change the way the funds are used and managed by the members.

  • User-Friendly Interface: The proposed revamp of the EPFO website will offer a robust, interactive, and user-friendly interface for seamless navigation and easier management of Accounts.

 

  • Self-correction of Personal Data: EPF members can now independently correct discrepancies or make changes in personal information like name, date of birth, gender, nationality, etc., directly through the EPFO Portal. This eliminates the need for employer approval or supporting documents in most cases.

 

  • ATM cards for instant EPF withdrawals: EPFO members will issue ATM Cards to members that function as debit cards. Members can directly withdraw their EPF savings from ATMs, offering Instant P.F withdrawal process in India, a first of its kind in the country. This will provide instant access to funds thus reducing the hassle of waiting for approval.

 

  • EPFO Mobile App: A new Mobile App is to be launched that will streamline the management of EPF Accounts. Through this Mobile App, members can check account balances, file claims, and access a wide variety of services. This is a one-stop solution for all EPFO-related tasks.

 

  • Reduction in PF Transfer time: Members can now file their PF transfer claims directly with EPFO using Aadhaar-based OTPs without employer intervention. This will significantly reduce the delays in transferring PF accounts when switching jobs.

 

  • Self Attestation features: EPFO proposes to introduce a self-attestation feature that will allow members to complete the Know Your Customer (KYC) process without the approval of the employer.

 

  • More Efficient Pension System: Employees are allowed to choose higher voluntary contribution towards Pension. The system also proposes support to the pension system that will make it more efficient with focus on addressing the delays in issuing pension payment orders.

 

  • Seamless User Experience: EPFO 3.0 aims to make all the processes starting from Account Management to filing of claims and transferring funds, more efficient, user-friendly and faster.

 

How do the EPFO 3.0 ATM Cards work?

EPFO ATM card is a revolutionary update being introduced in EPFO 3.0 that enables withdrawals from EPF accounts. As of now, members have to wait anywhere between 7 to 10 days for withdrawals from the EPF account. The process required either online or offline requests and employee attestation.

With the new features, members can access their PF accounts directly from designated ATMs for instant access of their funds without waiting for approval from employers. EPFO ATM withdrawal thus eliminates lengthy waiting time, and offers the much-needed convenience and instant access to their savings.

The EPFO ATM card functions like a regular Bank ATM card and allows members to withdraw up to 50% of their total savings in the PF accounts without lengthy approval processes. Similar to Bank ATM transactions, EPFO ATM transactions will require authentication via OTP, PIN, or Biometric verification for added security.

EPFO Mobile App

The proposed launch of the EPFO Mobile App through EPFO 3.0 is set to be a game-changer. The EPFO Mobile App will make it easier to manage your EPF account. It will allow you to quickly check your account balance, track contributions, and file claims from the convenience of your living room or when on the move through your Smartphone. The user-friendly interface is designed to save both time and effort, making it easier to have full control of your retirement savings and manage your account on the go. Regardless of whether you are at home or on the move, everything you need will be at your fingertips.

Flexibility in Pension Contributions

EPFO 3.0 proposes changes in Pension contributions by making it more flexible. Currently, EPF contributions are fixed at 12% of the Basic salary plus Dearness Allowance, split equally between the employee and employer. One part of the contribution goes into the Employees’ Pension Scheme (EPS). Under EPFO 3.0 the following changes are proposed.

  1. Employees are allowed to choose higher voluntary contributions towards Pension.
  2. They are given the flexibility to opt for different pension schemes.
  3. Enhancing benefits under EPS based on contribution levels.

This is EPFO’s new flexible savings scheme that aims to enhance retirement savings and provide employees with greater financial control and independence.

Self-Correction of Member Personal Details:

Currently, members have to depend on employers to correct discrepancies in the personal information on the EPFO Portal, resulting in undue delays and added Administrative pressure. However, with the EPFO’s new features, members can access their personal details and correct discrepancies without the requirement of supporting documents. The high volume of grievances is primarily related to member profiles and Know Your Customer (KYC) issues. This is nearly 27% of total complaints. These proposed changes aim to drastically reduce these grievances. For example, errors in details like father’s name, spouse name, etc., or nationality that hitherto required online requests and supporting documents, can now be quickly and efficiently updated, thus streamlining the entire process.

Eliminating delays in PF Transfers

For long, there has been a demand to reduce the delays in transferring PF Accounts when members switch jobs. Currently, employer verification is a key step often resulting in significant delay. On an average, the employers took 12 to 13 days to submit transfer claims to the EPFO. As per records, over the past 9 months nearly 20 lakh claims were held up with employers for more than 15 days.

EPFO 3.0 allows employees with fully compliant e-KYC EPF accounts to file transfer claims directly with the EPFO using Aadhaar-based OTPs, without requiring employer intervention. The proposed change is expected to significantly reduce transfer claim processing time by doing away with the bottleneck of employer verification.

EPFO 3.0 – Launch Timeline

Initial announcements revealing formal details about EPFO 3.0 began circulating in early 2023 highlighting the process of digitization and self-service enhancements. As a pilot phase which is still ongoing, certain features like online PF transfer and partial self-correction are already available like under EPFO 2.0.

According to official timelines, EPFO 3.0 is scheduled to be fully operational by June 2025 and will culminate in the complete roll-out of the new infrastructure that includes the EPFO ATM Card system, a revamped Mobile App, and flexible pension contributions.

Conclusion

EPFO 3.0 symbolizes an important step towards modernizing India’s Provident Fund Infrastructure. The aim is to deliver a hassle-free experience that benefits employees across the country, and this is emphasized in user autonomy, instant access to funds, digital security, and streamlining the entire workflow. Even though a few challenges remain, especially in implementing robust security measures and ensuring widespread digital literacy, the long-term prospects suggest a more robust, transparent, and member-friendly system.

In simple terms, EPFO 3.0, the latest updates on EPFO Reforms, is a comprehensive digital overhaul of the EPFO platform, that is designed to provide members greater control over their accounts, introduces ATM-enabled withdrawals and streamlines PF transfer with reduced paperwork.

GetifyHR is a highly reputed Payroll and Statutory Compliance Service Provider with years of experience in handling matters relating to Payroll and Statutory Compliance that includes Employees Provident Fund.  We are fully geared to handle all the proposed changes and will be able to fully support all our valued clients and the employees once these changes are notified. We are there to lend a shoulder to all these changes and all forthcoming changes in all aspects of Payroll Processing, HR Management and Statutory Compliance requirements.

statutory compliance blog

Statutory Compliance Checklist for Starting a Business in India

by with No Comment Labour Act

India is emerging as one of the fastest-growing economies globally and is projected to become the 3rd largest economy after the USA and China in the next few years. The Corporate sector has a major role to play in this growth and this can be achieved only when they adhere fully to all the statutory rules and regulations. Therefore, it is important that any startup, whether big or small, has to fully comply with these laws. In this article we have compiled a detailed statutory compliance checklist that will safeguard the business. We hope this would be a Start-up guidance for being fully compliant of all statutory requirements.

What are Statutory Compliance and the Risks of Non-compliance!

Statutory Compliance is a framework established by the Government to regulate the operations of a business and entails meeting legal, financial, and regulatory requirements. This includes how a business treats its employees, handles its finances and HR policies. Every company regardless of its size or industry has to ensure fair treatment of the employees, safe working conditions, and regular payment of salaries, taxes, and other benefits.

Statutory compliance is a legal framework and any non-compliance will attract legal proceeding that includes fines, legal issues and damage to reputation. Complying with these compliance deadlines ensures that you are:

  • Avoiding Legal pitfalls: Non-compliance or late filing can lead to fines, penalties, or more severe legal ramifications.
  • Streamlining Operational Efficiency: Regular compliance will ensure smooth operational efficiency and avoids last minute rushes that can disrupt the business processes.
  • Upholding Company Reputation: Being recognized as a compliant organization boosts stakeholder confidence and maintains business goodwill in the industry.

Companies in India, including start-ups must ensure compliance in 4 key areas.

1.  Industrial Relations

The provisions with regard to the payment of salaries and other benefits to employees top the list as they have to be strictly adhered to. To this effect, the provisions under the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, the Maternity Benefit Act, 1961, the Equal Remuneration Act, 1976, need to be strictly implemented. In addition to these, the Social Security contributions through the Employees Provident Fund and Miscellaneous Provisions (Amendment) 1992, The Employees State Insurance Act,1948, the Labour Welfare Fund and Payment of Gratuity Rules, 1976 have to be given due importance.

2.  Labour Laws

The provisions of the Labour Laws lays out the working conditions of the employees like fixed working hours, overtime, maintenance of workplace safety standards, and prevention of discrimination on the basis of race, colour, gender or sexual orientation.

3.  Tax Compliance

Tax compliance is the willingness of a taxpayer to abide by the applicable tax laws, file tax returns and pay the tax dues within the stipulated period. Tax compliance is, therefore, crucial for all businesses and being fully compliant will ultimately facilitate business growth. The types of tax compliance includes the Central taxes such as the Income Tax Act (IT), Goods & Service Tax (GST)and Customs Act and the State Government taxes like Professional Tax, Stamp Duty & Registration Fees Act, Road Tax & Motor Vehicle Act and Excise Duty. The relevant registrations like PAN, TAN, and GST are mandatory. The relevant Income Tax Returns, audits, GST Returns need to be filed along with the tax dues within the stipulated time.

4.  Additional Compliance

In addition to these there are compliance laws that pertain to environmental clearance, data privacy regulation and IP protection.

The Risks of Non-Compliance

Non-compliance of the Statutory Rules and Regulations can bring about potential harm to the entire working of the company. The risks stemming from non-compliance are far-reaching and can seriously affect the company’s credibility, performance, and overall growth. We envisage the following risks of non-compliance:

1.  Imposition of Fines and Penalties

Non-compliance can lead to the imposition of hefty fines and penalties by the concerned authorities. This will negatively impact the working of the company.

2.  Loss of Productivity and Revenue

The workplace is thrown into disharmony due to non-compliance especially if the social security schemes have not been complied with. This disharmony leads to a loss of productivity and revenue.

3.  Damages the Brand Image and Business Integrity

Non-compliance damages the Brand Image and Business Integrity of the company and this will negatively impact the company’s standing and growth.

4.  Loss of Customer Loyalty

Customer Loyalty is negatively impacted by non-compliance leading to loss in business volume.

5.  Government sanctions and license suspension

Non-compliance when serious and repeated many times will bring about sanctions and ultimately may lead to license suspensions by the government authorities.

Statutory Compliance Checklist

This Statutory Compliance Checklist has been designed keeping in mind the 4 key areas that companies need to be compliant with.

1.  Industrial Relations

Complying fully with the rules and regulations enshrined in the Acts pertaining to Industrial relations will ensure fair working conditions, smooth resolution of disputes, and prevention of discrimination in the workplace. These rules and regulations are meant to strengthen the interests of the employees and employers and pave the way for a fair and harmonious work environment.

1.1 Minimum Wages Act, 1948

The calls to pay Minimum wages to employees had been an oft-repeated demand much before India gained Independence, and this call fructified after Independence when the Minimum Wages Act was passed in the year 1948. The Act ensures the payment of minimum wages to employees and this figure is decided at the national, state or district levels. The minimum slab may be arrived at based on the occupation and cost of living of the region where the business operates.

The Act prevents the exploitation of employees and ensures that they receive fair remuneration for their work.

1.2 Payment of Wages Act, 1936

The Act was enacted in the year 1936 to ensure that the employees receive their wages on time and in full. The Act regulates the payment of wages and lays conditions on the timing, mode of payment and deductions from wages that are allowed. Depending on the number of employees, the wages have to be paid before the 7th or 10thday after the end of the wage period. Unauthorised deductions are prohibited and it limits deductions for fines, damages or advances to specified percentage of the wages.

1.3 Payment of Bonus Act, 1965

Any company having 20 or more employees is subject to pay an annual bonus under the Payment of Bonus Act, 1965. Under this Act, eligible employees are entitled a minimum bonus of 8.33% of their annual wages or ₹ 100/-, whichever is higher. There is a maximum cap of 20% bonus payable.

1.4 The Maternity Benefit Act, 1961

The Maternity Benefit Act, 1961 has been passed to protect the health and well being of pregnant women and new mothers in the workforce. Under the Act, eligible women employees are entitled to maternity leave of 26 weeks of which 8 weeks of leave can be availed before the expected date of delivery. Employers have to pay full wages during the maternity leave period, thus ensuring that pregnant employees can avail leave without facing any financial hardships.

1.5  EPF and ESI

The Employees Provident Fund & Miscellaneous Provisions (Amendment) Act, 1992 was enacted to implement social welfare and employee security measures. The Act requires the Employee to contribute 12% of the Basic salary + DA towards the Fund with an equal amount being contributed by the employer. These contributions accumulate during the service period and can be withdrawn at retirement, resignation, or in case of any emergencies. The Employer is entrusted with the job of maintaining these records and remitting the contribution amounts to the department every month without fail.

In addition to this, the Employees State Insurance Act, 1948 offers social security benefits to employees in case of sickness, maternity, disablement, or death due to occupational hazard. Both the employee and employer contributes towards this fund at 0.75% and 3.25% of wages respectively. These contributions fund the Employees State Insurance Corporation (ESIC) and provide medical and cash benefits to insured employees and their families.

Employers have to strictly adhere to the rules and regulations, and any non-compliance will entail payment of penalty of up to ₹ 10,000/- and may also have to face imprisonment of up to 3 years.

2.  Labour Laws

The labour laws are meant to safeguard employees from discrimination and exploitation on the grounds of gender. They enable all employees regardless of gender to be equally remunerated.

2.1 Equal Remuneration Act, 1976

This Act was passed to encourage gender equality as it prohibits paying women lower wages when compared to men for the same work. The purpose of this Act is to prevent discrimination against women and to economically empower them.

2.2  Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Act was enacted to prevent sexual harassment of women in the workplace and address them with diligence and in a fair manner. Any company that employees 10 or more employees has to form an Internal Complain Committee (ICC) to investigate sexual harassment complaints and is empowered to give verbal or written warning, transfer, suspend or terminate the accused if found guilty.

Not forming the ICC is non-compliance that would result in a fine of up to ₹ 50,000/- and additional fines will be imposed for additional non-compliance. The aggrieved employee can approach courts for legal action against the accused.

2.3 Health and Safety at the Workplace

This statutory compliance operates under the Factories Act and 12 other similar acts pertaining to Industrial Safety and Health.  The Occupational Safety, Health and Working Conditions Code, one of the Codes under the New Labour Laws subsumed these13 Acts.  The New Labour Laws were passed by parliament and notified by the Government, but is yet to be implemented.

The safety guidelines apply to all factories, mines, constructions sites and offices. The law and its rules ensure the prevention of occupational accidents, injuries and diseases. Non-compliance can lead to fines and legal action, leading to imprisonment for negligence as an employer.

2.4 Payment of Gratuity Act, 1976

Any company or start-up with 10 or more employees is governed by this Act. The Act envisages the payment of Gratuity to employees who have completed 5 years of service with the company. Contravention of the Gratuity Act can result in a fine of ₹ 20,000/- or imprisonment up to 2 years or both.

3.  Tax Compliances

The Government needs to mobilize significant amounts of tax to finance infrastructure development programs. Both the Central and State Governments impose taxes on companies that are required to comply with each of these tax laws. We can classify taxes in India into two types, namely Direct and Indirect Taxes.

3.1 Direct Taxes

Direct Tax is the Tax that a company or individual pays directly to the respective governments. Some of the Direct Taxes in India are:

  • Income Tax or Corporate Tax
  • Capital Gains Tax
  • Security Transaction Tax
  • Dividend Distribution Tax
  • Gift Tax
  • Wealth Tax

These taxes are levied based on the respective tax legislation. The Income Tax Act of 1961 requires corporate or start-ups to ensure that Tax Deducted at Source (TDS) is deducted according to taxable income of the assessee. Under the TDS rule, every payment made to an assessee is subject to a TDS deduction. Employees have to deduct TDS from the employees’ wages and remit it to the department. The employees can then file a TDS return to claim a refund of the deducted TDS.

3.2 Indirect Taxes

Indirect Taxes are levied on the consumption of goods and services. The amount of taxes has no direct linkage with personal income or business profit. The following are the Indirect Taxes levied in India.

  • Goods and Services Tax (GST)
  • Service Tax
  • Excise Tax
  • Entertainment Tax

For being compliant with the Indirect Tax laws, companies need to follow the underlying tax legislations. Voluntarily disclose taxable activities, remit the tax payments within the stipulated time limits, and perform tax audits and documentation.

GST is the most important Indirect Tax legislated by the government. The new GST rules were passed under the 10th Constitution Amendment Act of 2016. All companies are required to comply with the rules under these amendments. Service Tax, Excise Duty, Customs Duty, Entry Tax, Entertainment Tax, etc., are all consolidated under one single indirect tax, the Goods and Service Tax (GST). Though the implementation of GST is complex it is essential to know the category of GST applicable to one’s line of business and comply with the rules.

3.3 Tax Liabilities for Investors

Start ups that receive funds from Investors are subject to taxation as these investments are deemed as “Income from other sources”. This is taxed at corporate rates under sections 56(2) and 68 of the IT Act. Angel Tax i.e., tax levied on investments into a Company through sale of shares above market value have seen changes that makes it taxable now for foreign investments also.

3.4 Tax Liabilities of Foreign Companies in India

Foreign companies that set up units in India are also liable to pay taxes as the IT Act of 1961 and GST rules. The following table gives details of the Taxes and Compliance requirements of Foreign Companies in India.

Types of Tax Compliance Requirement
Direct Taxes – IT & TDS Filing of IT Returns,  TDS
Indirect Taxes – GST GST Dues and Returns
Investor Tax Taxes on Investments received
Foreign Company Taxes Pay taxes as applicable to Foreign Companies in India
4. Additional Compliance

These include the laws pertaining to Environmental clearance, Data Privacy, and IP Protection.

4.1 Environmental Clearance

The regulations fall under various Acts including the Factories Act, 1948, Environment Protection Act, 1986, Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981, Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2016 and the Companies Act, 2013. Non-compliance with any of these rules will attract heavy fines, license suspension, and even closure of the unit.

4.2 Data Privacy

Companies must put in place measures to protect the data privacy of employees and customers. The Data Protection Act of 2013 and the IT Act of 2000 spells out the rules to this effect. Preventing unauthorized access, utilization, and unwanted disclosures can damage the reputation of the company and attract fines and legal proceedings.

4.3 IP Protection

The Patents Act, 1970, the Trademark Act of 1999,the Designs Act of 2000, and the Copyright Act of 1957 provide the rules for IP protection. These regulations safeguard inventions, trademarks, and designs and prevent plagiarism. Non-compliance leads to prosecution.

Ways to combat Non-compliance with all Statutory Compliance rules and regulations.

We recommend 3 ways to be compliant of all the Statutory Compliance rules and regulations.

1.  Stay Updated and Audit Regularly.

Stay updated on all changes that take place in the rules and regulations. Conduct regular Audits to check your compliance performance. Your updated compliance trends and reports will help you to ascertain your readiness to be compliant always.

2.   Prepare a “What to do List”.

Draw a list of the due dates applicable to all the Statutory Compliance rules and regulations and track the performance. Conduct team meetings to review the process to confirm the completion of your operation to stay compliant. Such a plan will help to optimize costs, save time, and prevent negative results.

3.   Hire Professionals

You can get the assistance of Professionals who will be able to keep you updated on all the changes and maintain full compliance. This may pose to be an additional expense for start-ups; you cannot ignore the fact that being non-compliant would be more expensive.

Conclusion

Navigating the Statutory Compliance rules and regulations can be a very challenging task given the complexities of the compliance laws. Outsourcing this critical task to an external agency is the ideal solution for start-ups. GetifyHR is one of t he leading outsourcers of Payroll Processing and Statutory Compliance and an association with us would ensure greater accuracy and full adherence to all the compliance requirements. By outsourcing Payroll Services, businesses can reduce the risks associated with non-compliance and continue to focus on their core business activities.

GetifyHR offers a comprehensive solution for Payroll Processing and Statutory Compliance. With years of experience in handling this process, we ensure that start-ups can navigate through this complex set of rules and regulations with ease. Companies can handle their core business activities with greater focus and peace of mind, once they are confident that a tried and tested expert partner is efficiently handling their payroll and statutory obligations.

POSH Act

Comprehending the POSH Act 2013: An All-Inclusive Manual for Occupational Safety

by with No Comment Labour Act

Maintaining workplace safety is essential to creating a respectful, upbeat, and productive atmosphere. The Prevention of Sexual Harassment (POSH) Act is a crucial piece of legislation in India that aims to protect workers’ safety and dignity—especially that of women—in the workplace. This in-depth manual seeks to clarify the main points of the POSH Act and its role in improving workplace safety.

Overview of the POSH Act

2013 saw the enactment of the POSH Act, also known as the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act. It aims to shield female employees from sexual harassment at work and to offer a complaint resolution process. The Supreme Court of India’s 1997 Vishaka Guidelines, which emphasized the necessity of law to stop sexual harassment in the workplace, served as the foundation for the Act.

Important Clauses of the POSH Act

1. Sexual Harassment Definition

Sexual harassment is defined by the POSH Act as a broad range of unwanted acts or behavior (directly or indirectly), including advances and physical contact, requests or demands for sexual favors, sexually suggestive comments, the display of pornography, and any other unwanted physical, verbal, or nonverbal behavior of a sexual nature.

2. The Act’s Scope

The POSH Act applies to both the organized and unorganized sectors and protects all women, regardless of age or job position, whether they work directly or indirectly. It comprises regular workers, contract workers, ad hoc workers, trainees, interns, and even those who drop by the office.

3. Committee for Internal Complaints (ICC)

It is required for each organization with more than ten employees to set up an Internal Complaints Committee (ICC) in each branch or office. This provision guarantees a formal, structured procedure for handling complaints about harassment and discrimination in the workplace. The ICC is in charge of receiving employee complaints, looking into them thoroughly, and suggesting suitable measures to be taken against violators. This committee is essential to preserving organizational integrity, guaranteeing adherence to legal and ethical requirements, and preserving a respectful and safe work environment..

4. The LCC or Local Complaints Committee

The Act requires the District Officer to form a Local Complaints Committee (LCC) for workplaces with less than 10 employees or when the complaint is directed towards the employer. This guarantees that the POSH Act applies to every workplace.

5. Know the Difference

It’s critical to understand the differences between the International Criminal Court (ICC) and the Internal Complaints Committee (ICC). The latter is an international court that hears cases against defendants for crimes like crimes against humanity, war crimes, and genocide. It is situated in The Hague, Netherlands. The International Criminal Court has worldwide jurisdiction and resolves serious international crimes, in contrast to the organizational ICC, which deals with internal workplace disputes. Despite the fact that they both use the abbreviation “ICC” and engage in investigative procedures, their responsibilities, purviews, and functions differ significantly.

6. The Process of Complaint and Redress

A detailed procedure for submitting complaints is outlined in the POSH Act and it must to be completed in writing within three months of the incident. The employer or District Officer must receive the report from the ICC within 90 days of the investigation’s conclusion, and they have 60 days to implement the recommendations.

7. Secrecy

The POSH Act places a strong emphasis on maintaining secrecy throughout the complaint process, from filing to inquiry to suggestion implementation, in order to safeguard the complainant’s privacy and dignity.

Interesting Insights into POSH:

The Act, which went into force on December 9, 2013, aims to shield women against sexual harassment at work and offers procedures for filing complaints and seeking remedies if such an instance occurs. Employers’ obligations in this regard are outlined in the POSH Act, which includes disclosing complaint data in yearly reports.

Furthermore, the Securities and Exchange Board of India required all listed businesses to provide information on sexual harassment allegations in their annual reports starting in 2018.

The requirement for data pertaining to the Act’s execution to be disclosed is a useful addition to the legislation. It can facilitate efficient monitoring of the effectiveness of the law and act as a significant accountability mechanism.

Nevertheless, almost ten years later, there is still no publicly accessible database that compiles information from various employers and businesses. Finding trends and patterns across the sector is tough since the data is still dispersed over different business reports and frequently presented in unintuitive ways.

Stunning Statistics:

Together, the focal companies reported 161 cases in FY 2013–14, the first year the POSH Act went into effect. In a year, this figure shot up to 465.

The figures increased in every year that followed until the first year of the COVID-19 epidemic, FY 2020–21. Across the 300 companies, 586 incidents were reported overall, down from 961 cases in the previous year.

In FY 2021–2022, this number gradually rose to 767; the next year, it surged by 51.2% to 1,160. About 109 accusations of sexual harassment were settled against these companies in FY 2013–14. In FY 2014–15, this increased to 406.

But the number of instances that have been settled has generally lagged behind the number of complaints over time. In FY 2016–17, 2.1% fewer complaints were addressed than the previous year, despite a 12.9% increase in the number of reported instances.

In a similar vein, after FY 2020–21, the first year of the pandemic, the number of complaints increased dramatically, but the number of instances that were successfully resolved fell short.

Advantages of the POSH Law

POSH Act’s implementation offers the following advantages:

Establishes a Safe Work Environment:

It promotes a courteous and safe work environment, which is critical for both the health of employees and the organization’s general output.

Promotes Reporting:

The Act promotes victims’ coming forward without fear of reprisal by offering a transparent process for remedy.

Increases Awareness:

Consistent training and sensitization initiatives required by the Act increase knowledge of what sexual harassment is and how to stop these kinds of situations.

Assures Accountability:

The Act makes businesses responsible for maintaining a secure workplace and handling grievances in a timely and efficient manner.

GetifyHR and Safety at Work

We at GetifyHR recognize the value of a polite and safe work environment. Being a top supplier of payroll outsourcing services, we guarantee quick and accurate payroll processing in addition to providing complete compliance management solutions, which include POSH Act compliance. Our knowledgeable staff helps businesses establish Internal Complaints Committees, provide training programs, and make sure the Act’s legal requirements are met.

Organizations that engage with GetifyHR may concentrate on their main business operations while we handle their payroll and compliance requirements, guaranteeing a secure and law-abiding environment.

In summary

One important piece of law that attempts to give women a safe and respectable place to work is the POSH Act. Comprehending and executing the POSH Act’s provisions is not only legally required but also an ethical duty for all establishments. Establishing a respectful and safe culture can help firms increase employee happiness, lower attrition, and boost overall productivity.

GetifyHR is dedicated to assisting businesses diligently in their efforts to establish a secure and legal workplace. With our proficiency in compliance and payroll outsourcing services, we assist companies in managing the intricacies of labor regulations and guarantee POSH Act compliance. By working together, we can create a workplace where everyone is valued, respected, and feels safe.

Blog EPF

EPFO – Standard Operating Procedure for Joint Declaration

by with No Comment Labour ActNews & Updates

The Employees Provident Fund Organization (EPFO) has brought about changes to the Standard Operating Procedure (SOP) for receiving Joint Declarations for correcting mistakes in members’ Universal Account Number (UAN) profile, and employers’ EPF Accounts, and the procedure to be followed by the Field Office.

The notification to amend the SOP was released by the EPFO vide No: SU/2022/Rationalisation of work areas/Joint Declaration/17 dated 11-04-2024.

Purpose of the Amendment

The purpose of the amendment is to describe accurately and in detail the procedures of receipt of Joint Declaration for corrections in UAN profiles by the members and employers and the procedure to be followed by the field office in making these corrections. The proposed changes to SOP will make it easier and simpler to minimize both incompleteness and mismatches.

The changes would also ease the difficulties encountered in claim settlement due to data mismatches, especially in parameters such as:

  1. Name
  2. Gender
  3. Date of Birth
  4. Father’s Name/Mother’s Name
  5. Relationship
  6. Marital status
  7. Date of Joining
  8. Reason for Leaving
  9. Date of Leaving
  10. Nationality and
  11. Aadhaar Number.

The SOP for Joint Declaration aims to streamline the process of rectifying discrepancies in member profiles, thereby reducing claim rejection and minimizing the risk of impersonation and fraud through the manipulation of UAN.

The process

The process entails a collaborative effort between the employees and the employers with due authentication by a process of Initiation, Verification, and Approval by the Field Office (FO).

1.  Initiation

As and when a member files a Joint Declaration, it gets authenticated by the Employer. The submitted documents are then verified for accuracy by the designated Verifier within the FO.

2.  Verification

The modification request and supporting documents are then cross-checked by the designated Verifier to ensure compliance with EPFO guidelines and regulations.

3.  Approval

Upon verification, the JD is forwarded to the designated Approver for approval. This could be the Regional Provident Fund Commissioners (RPFC), Additional Provident Fund Commissioners (APFC), or other authorised officers of the organization.

List of acceptable documents that can be submitted for the different parameters

Name and Gender
  1. Aadhaar (mandatory)
  2. Passport
  3. Death Certificate
  4. Birth Certificate
  5. Driving License
  6. Service photo identity card issued by Central, State, UT Govt./PSU/ Banks
  7. School Leaving Certificate (SLC) or School Transfer Certificate (TC) or SSC certificate or Mark Sheet issued by Board/ University containing name and photograph.
  8. Bank passbook having the name and Photograph cross-stamped by the Bank Official.
  9. PAN Card/e-PAN
  10. Ration/PDS Photo Card
  11. Voter ID/e-Voter ID
  12. Pensioner Photo Card/Freedom Fighter Photo Card
  13. CGHS/ECHS/Medi-Claim Card with Photo issued by State/Central Govt/PSUs/Rashtriya Swasthya Bima Yojana (RSBY) Card.
Date of Birth
  1. Birth Certificate issued by the Registrar of Births and Deaths.
  2. School Leaving Certificate (SLC) or School Transfer Certificate (TC) or SSC certificate containing Name and Date of Birth or Marksheet issued by any recognized Government Board or University.
  3. Service records certificate issued by the Central/State Government Organizations.
  4. Where proof of date of birth is not available, a Medical Certificate issued by a Civil Surgeon after medical examination of the member and supported with an affidavit on oath by the member duly authenticated by a Competent Court.
  5. Aadhaar
  6. Passport
  7. PAN Card
  8. Central/State Pension Payment order
  9. CGHS/ECHS/Medi-Claim Card issued by Central/State/UTs Govts./PSUs having Photo & Date of Birth.
  10. Domicile Certificate issued by the Government.
Father / Mother name, and Relationship
  1. Passport of Father/Mother
  2. Ration card/PDS Card
  3. CGHS or ECHS/ Medi-Claim Card with photo issued by Central/ State Govt./PSUs.
  4. Pension Card
  5. Birth Certificates issued by Municipal Corporation, and other notified local Government bodies like Taluk, Tehsil, etc.
  6. Marriage Certificate issued by the Government.
  7. Photo ID card issued for schemes like Bhamashah, Jan-Aadhaar, MGNREGA, ARMY Canteen Card, etc., by Central/ State Govt.
Marital Status
  1. Marriage Certificate issued by the government
  2. Aadhaar Card
  3. Divorce Decree
  4. Passport.
Date of Joining
  1. Employee register
  2. Attendance register
  3. Appointment letter or any other document as establishments maintain under any central or State Labour Act
  4. Letter of establishment on the letterhead duly signed by the Employer or the Authorized Signatory showing the date of joining, supported by ECR of the employee during the said period.
Reason for Leaving
  1. Resignation letter
  2. A letter from the organization on their letterhead clearly stating the reasons for leaving, supported by the ECR of the employee during the said period.
  3. Termination letter issued by the employer to the employee.
  4. Any document as the organization deems fit to establish the reason for exit of the employee duly signed by the Employer or the authorized signatory of the organization on their letterhead.
Date of Leaving
  1. Resignation letter/termination letter
  2. Experience certificate or any other document an organization maintains under any Central or State Labour Act
  3. Wage slip/salary slip/full and final letter
  4. Letter of organization on their letterhead clearly stating the date of joining and duly signed by Employer or the authorized signatory.
Nationality
  1. Copy of Passport
  2. Copy of Person of Indian Origin (PIO) card issued by the Govt. of India
  3. Long Term Visa (valid) along with a Foreign passport (valid or expired) of country of origin issued to minority communities of Pakistan, Afghanistan and Bangladesh, namely Hindus, Christians, Sikhs, Buddhists, Jains, and Parsis.
  4. Valid Visa issud to a Foreign National along with a valid Foreign Passport.
  5. Tibetan Refugee Card (supported by one more ID)
Aadhaar
  1. Member Aadhaar card or e-Aadhaar card with details of linked active mobile phone.
Submission of Documentary Proof

All changes to parameters have been classified into Minor and Major changes and these have been detailed in Table 2 of the SOP.

All requests for Minor or Major corrections will have to be supported by documentary proof as prescribed in Annexure 1.  For Minor corrections, at least 2 documents from the list of documents mentioned in Annexure 1 for that particular parameter are required to be submitted. For Major corrections, at least 3 documents from the list of documents mentioned in Annexure 1 for that particular parameter are required to be submitted.

Frequency of Corrections

The SOP has fixed the frequency at which corrections to various parameters can be made through the Joint Declaration Form. The same is tabulated hereunder:

Sl. No. Parameters No.of times changes can be made

1.

Member Name

1
2. Gender

1
3.

Date of Birth

1
4. Father/Mother Name

1
5. Relationship

1
6. Marital Status

2

7.

Date of Joining

1

8.

Date f Leaving

1

9.

Reason for Leaving

1

10.

Nationality

1

11.

Aadhaar

1

The Procedure

The EPFO has streamlined the process of updating profile parameters by embracing digital technology thus making it accessible through the online platform. The process is simple and both the employees and employers alike can leverage the power of digital technology to submit the JD online.

Firstly, log on to the EPFO website at https://www.epfindia.gov.in/.  Then log into the Employee login using the Universal Account Number (UAN) and the Password. Employers can use their EPF credentials to log in. After logging in, click on the “Online Services” option on the portal and look for the Update or Correct EPF details, and select the Joint Declaration Form (JDF). Once the Form opens, fill in the required details accurately and ensure that all the details called for are filled in. Depending on the parameter that you are updating or changing, upload the supporting documents.

Next, submit the Form after fully verifying that the details provided by you are correct. After submission, you can track the status of the Joint Declaration Form submission through the EPFO portal and ensure that the processing is taking place and the details are fully updated.

Once the changes are approved, the member’s photo which is retrieved by the EPFO interface with UIDAI Aadhaar data will become visible in the member profile on their portal and the IT interface of various authorities.

Conclusion

Through this highly efficient and structured process, EPFO not only aims to maintain the profile integrity of the member but also hopes to minimize claim rejections and reduce the risk of impersonation and fraud. By leveraging technology through the Unified Portal Application, EPFO endeavors to enhance transparency, streamline efficiency, and usher in greater accountability in its operations. EPFO’s commitment to providing the best of technology for the benefit of employees and employers alike demonstrates a step towards a brighter and more streamlined future on social security and the management of EPF Accounts.

GetifyHR has been fully supportive of the needs of the employees and employers in handling EPF, and we have always updated ourselves immediately on all the changes brought in by EPFO from time to time. We are fully geared to handle these changes and support our clients and through them the employees in all aspects of EPF.

Life Certificate

What is the Life Certificate in PF and what are all its uses?

by with No Comment BusinessLabour Act

All Central and State Government employees are eligible to receive Pension on retirement at the age of 58.  The benefit was not available to employees in the private sector.  However, the Government of India, with the view to support the employees in the private sector legislated the Employees Provident Act in the year 1952.  Controlled by the Employees Provident Fund Organization (EPFO), the scheme envisages providing benefits to the employees in the private sector that they hitherto had no access to.  One such scheme under the EPF Act is the Employees Pension Scheme (EPS) which was launched in the year 1995 by EPFO to enable retirees in the private sector to get regular pension after retirement at the age of 58.

All pensioners, whether they are pensioners of the Private Sector, Central Government, the State Government or members of any Government Organization are eligible to receive pension upon retirement at the age of 58. These pensioners are required to submit an Annual Life Certificate (ALC) to the authorised Pension Disbursing Agency (PDA) like the authorized Banks, Post Office for further continuation of the pension.  This certificate has to be submitted in the month of November for receiving pension.  The ALC has to be submitted in the form prescribed in Annexure XIII of CPAO Booklet Scheme, 2021.  However, in case of pensioners of the age of 80 years or above, the Life Certificate can be submitted from 1st October onwards.

In order to get the Certificate the pensioner has to either personally present oneself before the Pension Disbursing Agency (PDA) or have it delivered to the Agency through the authority where they have served earlier.  This procedure was causing a lot of hardship to the pensioners, especially for the aged and infirm pensioners who cannot present themselves always before the agency to secure the ALC.  Moreover, many employees post retirement choose to move to different locations either to be with the family or for some other reasons.  This would pose a lot of hardship in getting the ALC from the Agency and adversely affect the receipt of pension in the subsequent months.

To overcome this problem, the Government initiated the Digital Life Certificate for Pension Scheme also known as the Jeevan Pramaan.  This scheme addresses this problem by digitising the entire process of generating the Life Certificate.  Jeevan Pramaan is a Biometric enabled digital service for Pensioners that streamlines the entire process and makes it easier and hassle free for pensioners.  Pensioners of the Private Sector,  Central Government, State government and any other Government Organization can take benefit of this facility.  By this process the presence of the pensioner before the Pension Disbursing Agency is done away with thus benefitting the pensioner and also cutting down on unnecessary logistical hurdles.

How it Works?

Jeevan Pramaan uses the Aadhaar Platform for Biometric authentication of the Pensioner.  On successful completion of the authentication, the Digital Life Certificate is generated.  This gets stored in the Life Certificate Repository, which again can be accessed by the PDA online.

How to Register?

Pensioners have to register first to receive the Jeevan Pramaan Patra or Life Certificate.  They can approach the nearest Citizen Service Center (CSC), Banks or Government Offices to register.  The filled in application has to be submitted here and the Biometric authentication using the Aadhaar will be conducted.  Once this is successful, a Jeevan Pramaan ID will be generated.

Alternately you can download a Mobile App or PC App to register online from the official website https://jeevanpramaan.gov.in.  For this purpose you will require Internet and STQC Certified Biometric Device.

The Jevan Pramaan Application can be downloaded from the official website.  Click on the download option to provide your email ID, Captcha and click on “I agree to Download”.  Enter the OTP that you receive in your email and click on “Download for WindowsOS”.  You will receive the download link in your email.  Click on this link and a Zip file containing the Jeevan Pramaan application will get downloaded.  You can unzip this file and follow the instruction provided in the client installation document.

Once the Jeevan Pramaan ID has been generated, the pensioner needs to connect to the Portal once again using another OTP.  Next he/she has to select “Generate Jeevan Pramaan” and enter the Aadhaar and mobile number.  Click on the generate OTP option and enter the OTP number that you receive on your email or mobile.  You will also be required to input the Pension Payment Order (PPO) number, the name of the Disbursing Agency, your name and a few other required information.

On successful completion of this operation, an SMS acknowledgement is sent to your mobile number including your Jeevan Pramaan Patra or Certificate.  The Certificate is stored in the Life Certificate Repository and is available anytime and anywhere for the Pensioner and the Pension Disbursing Agency (PDA).

This scheme is not available to remarried or re-employed pensioners.  They are required to submit the Annual Life Certificate in the conventional way to the Pension Disbursing Agency.

Conclusion

The Jeevan Pramaan Patra effectively addresses the problems faced by the Pensioners who have to present themselves in person at the Pension Disbursing Agency every year to continue getting their pension dues.  Under this scheme the pensioners have the option to generate Jeevan Pramaan Patra, either online or via a mobile app.  By using Jeevan Pramaan, a pensioner can now digitally provide proof of his/her existence to the authorities for continuity of pension every year, instead of requiring appearing in person before the Pension Disbursing Agency.  By employing biometric authentication to authenticate the pensioner’s identity, the scheme effectively prevents fraudulent activities.

This is a great boon to all beneficiaries and we at GetifyHR have been assisting our clients and their employees who have retired in effectively generating a vital document like the Annual Life Certificate.

EDLI Benefits

EPF Act – Family Cover through EDLI and its benefits!

by with No Comment Labour Act

Introduction

The Employees Provident Fund Organization (EPFO) is one of the two main Social Security schemes under the Government of India, the other being Employees State Insurance (ESI). The EPFO comes under the aegis of the Ministry of Labour and Employment and is responsible for the regulation and management of Provident Funds in the country. The EPFO manages and administers the Employees Provident Fund (EPF), Employees Pension Scheme (EPS), and Employees Deposit Linked Insurance (EDLI).

EDLI

All the members of the EPFO are covered under the insurance scheme known as EDLI or Employees Deposit Linked Insurance. In this article, we explain the key features of the scheme, eligibility, and benefits of the scheme.

The EDLI scheme was launched in the year 1976 to provide insurance cover to members of the EPFO. Through this scheme, the family of a member gets financial assistance in the case of the death of the member while in service. The insurance cover will depend on the salary drawn in the last 12 months of employment before death.

Under this scheme, there is no exclusion.

EDLI Contribution

The employees and employers contribute to the EPFO scheme and this contribution is split among the three schemes namely, Employees Provident Fund (EPF), Employees Pension Scheme (EPS), and Employees Deposit Linked Insurance (EDLI). There is no contribution from the Employees towards the EDLI scheme, whereas, the employee contribution is 0.5% of the Basic salary + DA, subject to a maximum of Rs:75/-. Eligibility kicks in only when the member has continuously worked for 1 year and is an active member of the EPF.

EDLI Calculation

The average salary drawn by the deceased member during the 12 months before death is taken for calculation of the EDLI benefit. 35 times the average salary in the last 12 months is taken for the calculation, subject to a maximum salary that is capped at Rs:15,000/-. The calculation is as follows:

35,000 x 15,000 = Rs: 5,25,000/-

To this amount, an additional bonus amount of Rs:1,75,000/- is added taking the total amount payable to Rs:7,00,000/-.

Eligibility to claim the EDLI Benefits

The insurance benefits can be claimed by the family members, legal heirs, and nominees of the member.

– Member of the family nominated by the member under the EPF scheme

– In case a nomination has not been made, all the members of the family except major sons, married daughters with major sons, and married granddaughters.

– In case there is no family and no nomination, then legal heirs.

– In the case of a minor, the guardian/family member/legal heirs.

Forms Required

To claim the insurance, the nominee, legal heir, and family member have to apply in EDLI Form 5 IF. The claim form has to be filled separately by each claimant and if the claimant is a minor, the guardian has to fill the form on his/her behalf.

The form has to be filled offline and has to be submitted to the regional EPF Commissioner’s Office along with the Death Certificate issued by the Employer, mentioning the date of death of the member. The Form should also mention the mode of fund transfer.

How to claim EDLI benefits?

  • The member should have been an active member of EPF at the time of death.
  • Form 5 IF has to be filled and submitted to the EPF Commissioner to get the insurance benefit.
  • The form has to be signed and certified by the employer.
  • Where there is no employer, the form has to be attested by any of the following officials:

– A gazetted officer

– The District Magistrate

– Member of Parliament or MLA

– President of the Village Panchayat

– Chairman/Secretary/Member of the Municipal or District Local Board

– Postmaster or Sub-Postmaster

– Regional Committee of EPF or Member of CBT

– Manager of the Bank in which the account is maintained.

Documents required for claiming EDLI

    • Death Certificate of the Member
    • Guardianship Certificate if a person other than the natural guardian files the claim on behalf of a minor family member/nominee/legal heir.
    • Succession Certificate in case the legal heir makes the claim
    • A copy of the canceled cheque of the Bank account to which the payment has to be made.
    • Where the member was last employed under an establishment that is exempted under the EPF Scheme, the employer of such establishment should furnish the PF details of the last 12 months under the certificate part and also submit an attested copy of the Member Nomination Form.

The EPF Commissioner is liable to settle the claim within 30 days failing which he is liable to pay interest @ 12% per annum from the stipulated date to the actual date of settlement.

The EDLI Scheme under the EPF Act provides critical support to the family members of a member who has died while in service. The family members, nominees, and legal heirs are eligible to get a maximum of ₹ 7,00,000 in the event of the death of the member in service. This is a great boon to the family at a very critical juncture.

GetifyHR has been able to provide strong support to clients across the country through its Payroll and HR management outsourcing module. This has provided our clients with a strong edge and helped them to improve the overall performance of the company. Through this outsourcing module, the entire gamut of Payroll processing and HR Management are handled seamlessly and efficiently. This has not only enhanced the performance of the company but has also ushered in a more harmonious work atmosphere.

Labour welfare fund

What is the Labour Welfare Fund and what are its benefits?

by with No Comment Labour Act

Introduction

The Labour Welfare Fund is an initiative by the Government of India to extend a measure of social assistance to employees in the unorganized sector.  It is a kind of financial assistance for workers to improve their working conditions and standard of living.

Out of the 36 states and Union Territories, only 16 States/UTs have so far implemented this Act. As per the Act, the employees and employers contribute towards this Fund, and in some states, the state also contributes.  Since the Fund is managed by independent states, the rules vary from one state to another.  Any business/industry that satisfies the criteria of number of employees required by the Act to come under its purview has to register with the concerned Labour Department of the state.

Eligibility

In Tamil Nadu, if a company has 5 or more employees on its payroll then it has to register with the Labour Department.  In Kerala, it is 2 or more employees and in Gujarat, it is 10 or more employees. Each State/UT has its own rules to become eligible for registration.

The Act is not applicable to all categories of employees, and depends on the wages earned and the designation of the employees.  Those employees who are in the managerial or supervisory position and drawing salary that is more than what is stipulated in the Act are not eligible for the Fund.  This will vary from state to state.

States/UTs that have implemented the LWF Act

The following States and Union Territories have implemented the Labour Welfare Fund Act:

  1. Andhra Pradesh
  2. Chandigarh
  3. Chattisgarh
  4. Delhi
  5. Goa
  6. Gujarat
  7. Haryana
  8. Karnataka
  9. Kerala
  10. Maharashtra
  11. Madhya Pradesh
  12. Odisha
  13. Punjab.
  14. Tamil Nadu
  15. Telengana
  16. West Bengal.

States/UTs that have not implemented the LWF Act

The following States and Union Territories have not implemented the Labour Welfare Fund Act:

  1. Andaman & Nicobar Islands
  2. Arunachal Pradesh
  3. Assam
  4. Bihar
  5. Dadra and Nagar Haveli
  6. Daman and Diu
  7. Himachal Pradesh
  8. Jammu and Kashmir
  9. Jharkhand
  10. Lakshadweep
  11. Manipur
  12. Megalaya
  13. Mizoram
  14. Nagaland
  15. Pondicherry
  16. Rajasthan
  17. Sikkim
  18. Tripura
  19. Uttar Pradesh

Amount of Contribution

The amount of contribution also varies from state to state.  The following table provides details of the contribution period, contribution amount and due dates for remittance of the contribution.

State/UT Contribution regularity Contribution Months Employee Contribution Employer Contribution Contribution Total Return & Due Date
Andhra Pradesh Annual December 30 70 100 Form F

Jan 31
Chandigarh Monthly April-March 5 20 25 Nil

Oct.15

Apr.15
Chattisgarh Half-Yearly June- Dec. 15 45 60 Form A

31 July

31 Jan
Delhi Half-Yearly June-Dec. 0.75 2.25 6 Form A

15 July

15 Jan.
Goa Half-Yearly June-Dec 60 180 240 Form A

31 July

31 Jan.
Gujarat Half-Yearly June-Dec 6 12 18 Form A1

31 July

31 Jan.
Haryana Monthly Jan – Dec 31 62 93 Nil

31 Dec
Karnataka Annual December 20 40 60 Form D

15 Jan.
Kerala Half-Yearly June-Dec 4 12 16 Form A

15 July

15 Jan
Maharastra Half-Yearly June-Dec 6/12 18/36 24/48 Form A1

15 July

15 Jan
Madhya Pradesh Half-Yearly June-Dec 10 30 40 Nil

15 July

15 Jan
Odisha Half-Yearly June-Dec 20 40 60 Form F

15 July

15 Jan
Punjab Monthly April-March 5 20 25 Nil

15 Oct

15 April
Tamil Nadu Annual December 20 40 60 Form D

15 Jan
Telengana Annual December 2 5 7 Form F

31 Jan
West Bengal Half-Yearly June-Dec 3 15 18 Form D

15 July

15 Jan.

How is the Labour Welfare Fund utilized?

The Labour Welfare Fund is utilized by the Labour Welfare Board to cover the following activities.

  • To provide Libraries
  • For Vocational Training
  • To provide adequate nutrition to children
  • Towards transport facilities
  • For the education of children, through scholarships
  • To provide Medical facilities for employees and dependents
  • To provide entertainment facilities to the employees – sports, art forms, music
  • To provide vacation facilities for employees and their families
  • For providing subsidiary occupation for women and unemployed persons.
  • To provide assistance for Natural and Accidental Death. In Tamilnadu an Accidental death Assistance of  ₹ 1,00,000 and  ₹5,000 towards funeral expenses is provided.  When death is natural, a sum of   ₹25,000/- assistance along with ₹5,000 towards funeral expenses is provided.

Conclusion

The Labour Welfare Fund Act is an important legislation to protect the interests of the workers, especially in the unorganized sector. However, only 16 states and UTs have so far implemented the Act. Though it has not been implemented in all the States and Union Territories in the country, many states and UTs are in the process of implementing them shortly.

GetifyHR is rightly placed to provide a perfect solution to companies that need to streamline their Payroll and be compliant with all the statutory requirements. As one of the top outsourcers of Payroll processing and HR Management, we have been providing exemplary service to our clients across the country. Our outsourcing module can seamlessly handle all aspects of Payroll processing with a high degree of accuracy enabling stress-free operations month over month. In the process, it also handles all the statutory requirements so that the company is compliant always.

Policies Shops and Establishment Act

What are the policies that should be maintained in a company that is covered by the Shops and Establishment Act?

by with No Comment Labour Act

Introduction

The Shops and Establishment Act was established to protect the rights of employees in commercial establishments like business houses, offices, stores, warehouses, hotels, amusement parks, theatres, etc., nationwide. The provisions of the Act form one of the most important regulations required to be complied with by businesses. Every state has framed its own separate Shops and Establishment Act. However, the scope of the Act is similar across the nation, barring a few minor changes from state to state.

The Shops and Establishment Act regulates the following areas:

– Working hours

– Rest intervals for employees

– Overtime eligibility

– Leave Policy

– Opening and Closing hours of the establishment

– Weekly holidays, national and religious holidays

– Wages for holidays

– Annual, Casual, Maternity, and Sick leave

– Time and conditions for payment of wages

– Deduction of Wages

– Termination conditions

– Cleanliness, lighting, and ventilation of premises

– Precautions against fire

– Prohibition of employment of children

– Employment of young persons or women

– Maintaining various records/registers

– Display of Notices-Certificates

The establishments that are registered under the Shops and Establishment Act have to frame certain policies that will enable them to comply with all the regulations of the Act.  Failure to do so will attract penalties and other penal actions.

This article articulates the policies and actions to be taken by establishments that are registered under the Shops and Establishment Act.

Registration:

Any company or establishment that is subject to come under the rules of the Shops and Establishment Act has to register with the Labour Department. These registrations have to be made within the days mentioned in the Act and this would differ from state to state. In some states, the registration has to be obtained within 30 days of the commencement of business, whereas, in some other states it is 60, 90, or even 180 days from the commencement of business.

Hours of Business – Opening and Closing hours:

This should be fixed in accordance with the provisions of Chapter III of the Act. Typically the Act specifies that an employee has to work for 48 hours a week and shall not work for more than 9 hours in a day.  This may vary from state to state.

Weekly, National, and Religious Holidays:

The Act provides for at least one-day weekly holiday. In addition to this, the employees are eligible for Casual Leave, Annual Leave, Sick Leave, and Maternity Leave as per the provisions of the Act in the states.

National Holidays may be common across the states but the Religious holidays may vary from state to state. A proper leave policy has to be maintained by the establishment.

Payment of Wages:

The Act provides that the employees are paid their wages on time and as per the employment contract. In addition to this paid leave can be availed by employees and this includes Annual Leave, Sick Leave, and Maternity Leave. Typically, employees are eligible for at least 12 days of paid leave per year and this may vary from state to state.

Overtime Wages:

Employees who work for extra hours are eligible for overtime wages and this should be paid in accordance with the rules.

Deduction of Wages:

Wage deduction policies should be as per the rules framed in the Act for such deductions.

Termination from Service:

Proper policies have to be framed as per Sec.66 the Act for Termination of Employees.

Employment of Children

The Act has provisions for the employment of children and this should be properly reflected in the policies of the establishment.

Employment of young persons and Women:

As per the Shops & Establishments Act, there are strict rules regarding the employment of young persons and women. These mostly pertain to the number of hours and working hours. These policies should be strictly maintained by the establishment.

Register and Records:

Specific Registers and records have to be properly maintained as per the Act. These include the Register of Employees, Register of Wages and Deductions, etc.

Cleanliness, Lighting, and ventilation of the premises:

The Establishment has to maintain a clean and dust-free workplace. Proper ventilation has to be provided on the premises with adequate lighting. The Act mandates that a safe and secure work atmosphere is provided to the employee.

Provisions for Fire Emergency

The Act envisages the need for having emergency exits in the event of fire risks.

Full-body Medical check-up:

All employees should undergo a full-body medical check-up by a certified surgeon or doctor at least once a year. These records have to be properly maintained.

Conclusion

Any establishment that comes under the purview of the Shops & Establishment Act has to strictly adhere to the rules and regulations, failing which they will be penalized.

These may be in the form of fines or in some cases imprisonment. Contravening these rules is a serious offense and it is therefore in the interest of the establishment to have clear policies that enable full compliance.

GetifyHR is one of the premier establishments providing strong support in managing Payroll and HR management through a well-established outsourcing module. With years of experience in this industry, we have provided exemplary service to our clients across the country. We have very effectively implemented all the requirements of the Shops and Establishment Act in our module and this has enabled our clients to be fully compliant with all the rules and regulations of the Act. This is an association that will enable you to conduct your business in a stress-free manner and thereby not only promote greater growth but also create a more harmonious workplace.