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Complianceoflabourlaws India 141104005316 Conversion Gate02 PDF
Complianceoflabourlaws India 141104005316 Conversion Gate02 PDF
By:
Amrik Singh
Sr. Officer (HR)
GAIL (India) Limited
In a Nutshell Registering
& Licensing
of Existing
and New
Audit of Display of
Contractor / Abstract
Vendor and Notices
Compliances
Compliance
of Labour
Statutory Laws
obligations Statutory
& Challans and
Responsibil Remittances
ities
Timely Maintaining
filling of Statutory
Statutory Registers
Returns and Records
WHY COMPLIANCE
MANAGEMENT?
Compliance Management
Framework
Policies & Procedure
Prevent Risk Assessment
Training & Commitment
Monitoring
Detect Audit
Ombudsperson
Investigation
Respond Communication
Improvements
CLAUSE 49 OF THE LISTING AGREEMENT
Provision Purpose
Compliance of all the Ethical conduct of affairs
applicable legal provisions, Part of Wealth Management
rules & regulation
All Directors and Officers shall take utmost care and pay attention
to comply with all applicable laws, regulations, rules and
regulatory orders in letter and in spirit.
Minimum wage is the wage that is able to provide not only for
bare physical needs but also for preservation of efficiency of
worker plus some measure of education, health and other things.
Penalty
Imprisonment for a term upto 6 months or fine which may extend to
Rs.500 or both.
Penalty
Fine which may extend to Rs.500
RESPONSIBILITY FOR PAYMENT OF WAGES
Under Section-12 of Contract Labour (Regulation And Abolition) Act, 1970
(1) A contractor shall be responsible for payment of wages to each worker
employed by him as contract labour and such wages shall be paid before the
expiry of such period as may be prescribed.
(2) Every principal employer shall nominate a representative duly authorized
by him to be present at the time of disbursement of wages by the contractor
and it shall be the duty of such representative to certify the amounts paid as
wages in such manner as may be prescribed.
(3) It shall be the duty of the contractor to ensure the disbursement of wages in
the presence of the authorized representative of the principal employer.
(4) In case the contractor fails to make payment of wages within the prescribed
period or makes short payment, then the principal employer shall be liable
to make payment of wages in full or the unpaid balance due, as the case may
be, to the contract labour employed by the contractor and recover the
amount so paid from the contractor either by deduction from any amount
payable to the contractor under any contract or as a debt payable by the
contractor.
COMPLIANCES UNDER
PAYMENT OF WAGES ACT, 1936
Sec 4 Fixation of wage-periods: wage periods shall not exceeding one month.
Sec 5 Time of Payment of Wages: Before the 7th day after the last day of the
wage period where less than 1000 employees and before 10th day in other
cases.
Example: 7-A
Employees
State Insurance Act, 1948
Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels,
restaurants, cinemas including preview theatres, road-motor transport
undertakings and newspaper establishments employing 20* or more persons.
Further under section 1(5) of the Act, the Scheme has been extended to Private
Medical and Educational institutions employing 20* or more persons in certain
States/UTs.
*Note: 14 State Govts. / UTs have reduced the threshold limit for coverage of
shops and other establishments from 20 to 10 or more persons. Remaining
State Governments/UTs are in the process of reducing the same.
The existing wage limit for coverage under the Act is Rs. 15,000/- per
month (w.e.f. 01/05/2010).
ESI Scheme
All employees to insured under the ESI Scheme and provisions of
the Employees' State Insurance Act, 1948
COVERAGE
Persons employed in factories, mines, plantations, railways and other
establishments mentioned in Schedule II of the Act.
ELIGIBLITY
The benefits are payable in respect of work-related injuries to the
workers dependents not covered by the ESI Act.
Workmen's Compensation Act, 1923 or
Employees' Compensation Act 1923
If not covered under ESI Act
Employers Liability : To pay compensation to the employee on
death or personal injury, resulting into total or partial disablement or
occupational disease, caused to an employee arising out of and during
the course of employment.
All Employees to be Ensured
Amount of Compensation
In case of Death = 50% of the monthly wages of the deceased workman
multiplied by the relevant factor or an amount of
Rs. 1,20,000/-, whichever is more.
In case of permanent total disablement = 60% of the monthly wages of
the injured workman multiplied by the relevant factor or an amount of
Rs. 1,40,000/-, whichever is more.
Liability Calculation:
Employees/ Workmen's Compensation
Act
BENEFITS
15 days wages for every completed year of service or part thereof in
excess of 6 months subject to a maximum of Rs.10,00,000/-.
The seasonal employees are entitled to gratuity at a rate of 7 days
wage for each season.
DEATH GRATUITY
(1) Gratuity shall be payable to an employee on the termination of his employment after he
has rendered continuous service for not less than five years, - (a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease : Provided that the completion of
continuous service of five years shall not be necessary where the termination of the
employment of any employee is due to death or disablement :
Provided further that in the case of death of the employee, gratuity payable to him shall be
paid to his nominee or, if no nomination has been made, to his heirs, and where any such
nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling
authority who shall invest the same for the benefit of such minor in such bank or other
financial institution, as may be prescribed, until such minor attains majority.
Gratuity will be payable only on the cases of death during the currency of contract
and will be reimbursed to the contractor on submission of copy of proof on
disbursement of gratuity.
What minimum an HR, F&A executive
should so?
Take Copy of Labour License from Contractor before start
working with contract labour
Obtain PF Code and Check PF Compliance on EPFO
portal
Obtain EIC Code, if applicable and Check ESI Compliance
on ESIC portal
Obtain a copy of Insurance under WC/EC Act, if ESI is not
applicable.
Ensure Attendance register & Salary Register with salary
slip of Contract labourer available with the company
(Minimum wages to be paid )
What minimum an HR, F&A executive
should so?
Take copies of PF/ESIC paid challans from Contractor &
preserve them for future departmental Audit ( As a
principle employer if contractor does not pay then
company will be liable)
Maintain Labour License Expiry register of all contractor
working in the company to avoid legal obligations on
organization
How to resolve such issues, avoid their
occurrence and ensure compliances
HR Manager / HR Executive is responsible for ensuring
all compliances related to Labour Laws
Penalties
Lawsuit
Loss of credibility
Loss of contract
Closure of business
Future business
Concept of fair wages
Sr.
Component of Wages and Social Security Quantum
No.
Basic Wages (A) = Minimum Wages as notified by the Central or State
1 A
Government whichever is higher
2 Contribution towards EPF/EPS/EDLI and Admn. Charges @13.61% of A
b) Overtime allowance is wages for payment of b) Annual Bonus is not wages if the
contribution only but not for determination of periodicity of the payments is more than
employee u/s 2(9) of the Act. 2 months.
c) Inam is wages when it is paid for special skill c) Incentive Bonus: Incentive Bonus is
or higher responsibilities or where the employer not wages if the periodicity of the
has no right to withdraw or revise it payments is more than 2 months.
e) House Rent Allowance is wages. e) Inam is not wages where the employer
has right to withdraw at his discretion
and where there is scheme of Inam in
writing but still employer might be
making payment under the head Inam
on the basis of some understanding
between the parties and the periodicity
of payment is beyond 2 months.
g) Conveyance Allowance is wages which arises g) Service Charges is not wages when it
out of contract of employment from 1.4.02 as per is collected as tips.
Hqrs. letter dated 21.3.02
Payments considered as Wages under ESI Act
WAGES NOT WAGES
n) Wages and Dearness Allowance for un- n) Payment made to institutions having
substituted holidays is wages separate legal entity no contribution
payable
r) Short period contract for service electrician, r) The following items will not form part
carpenters, plumbers, repair work if the work is of wage either for the purposes of u/s.
done within the factory premises, contribution is 2(9) or u/s 2(22) of the ESI Act.
payable in respect of employees. 1) Payment made on account of
unavailed leave at the time of discharge
(2) Commission on advertisement
secured for newspaper if not paid to the
regular employees (3) Fuel Allowance /
Petrol Allowance (4) Entertainment
Allowance (5) Shoes Allowance (6)
Payment made on account of gratuity /
discharge / retirement (7) Payment
made on encashment of leave.
Payments considered as Wages under ESI Act
WAGES
s) The following items may be considered as Wages :- (1) Matinee allowance paid to the
cinema employee (2) Shift allowance (3) Location allowance paid in addition to D.A. to
meet the high house rent (4) Compensatory allowance (5) Cash handling allowance paid to
Cashier (6) Supervisory allowance (7)Additional pay paid to training staff (8) Charge
allowance (9) Steno/typist allowance (10) Plant allowance (11) Computer allowance (12)
Gestetner/Photo copies/printers allowance (13) Personal /special allowance (14) Machine
allowance (15) Canvassing allowance (16) First aid allowance (17) Personal allowance for
skill, efficiency or past good records (18) Area allowance for high cost living (19) Ex-gratia
payment if payment is made within an interval of 2 months.
(20) Conveyance all w.e.f. 01.04.02 (21) Food/Tiffin/Meal all w.e.f. 06.05.03
Coverage of workers engaged by the outside agencies / job contractors in connection with
the work of the principal employer outside the premises. For the purpose of verification
and inspection, the details in respect of these employers/ employees should be furnished
by the Principal Employer in proforma prescribed in Annexure-I.
THANK YOU!