You are on page 1of 27

Statutory Compliances

HR Department, Western Region

Statutory Compliances For HR
Contract Labour (R&A) Act Employees State Insurance Act Employees Provident Fund & MP Act Payment of Gratuity Act The Payment Of Wages Act The Minimum Wages Act The Maternity Benefit Act The Payment Of Bonus Act Workmen’s Compensation Act Factories Act, 1948 Shops & Establishments Act
Gaurav Kapil, HR Department, Western Region

A Few Definitions
 Who is Contractor: Person who undertakes to produce a

given result for the establishment, other than mere supply of goods or articles of manufacture through contract labourers directly or through sub-contractor, for any work of establishment.
 Why we need Contract Labourer: There are several

fields of employment where it is not otherwise possible to have continuous employment as such, except the necessities of the situation, the Act has provided for continuation & thereby regulation of contract labour.

Contract Labour (R&A) Act, 1970
Objective is to regulate the employment of contract labour in certain establishments
Applicability  To establishment employing 20 or more workmen as contract labour  To contractor employing twenty or more workmen
 Registration of Establishments & Licensing of Contractors
 

The establishments covered under the Act are required to be registered as principal employers with the appropriate authorities Every contractor is required to obtain a licence and not to undertake or execute any work through contract labour except under and in accordance with the licence issued in that behalf

Contract Labour (R&A) Act, 1970
 Welfare & health of the contract labourers

Establishment Canteens, rest rooms and arrangements for sufficient supply of wholesome drinking water, latrines and urinals, washing facilities and first aid facilities (made obligatory) In cases of failure on the part of the contractor to provide these facilities, the Principal Employer is liable to provide the same.

 Section 10
 

(a) The work is perennial and must go on from day to day; (b) The work is incidental to and necessary for the work of the factory; (c) The work is sufficient to employ considerable number of whole time workmen; and (d) The work is being done in most concerns through regular workmen.

DO’s •Timely payment of wages (by 7 day of following month). •Witness of payment by your authorised/nominated officer and •endorsement/certificate on wage sheet

Don’t’s • Issue any character/experience certificate to any contract labour. • Allow to use your address in his correspondence. At the most he may write/show as client address.

•Payment of Minimum Wages or the rates fixed by agreement /settlement / award.

• Increase number of labours / induct new labours without justification and approval of state/regional head.

•Obtain copy of Attendance & Wage sheet • Issue any authorisation letter for any type of each month duly signed by the of job / entry into any other organization Contractor or his Authorised Manager with as rep of IOCL /your location seal. •That Photo identity card issued to the contract labour must contain the name, address and signature of the contractor. •Take authority letter from Contractor notifying name of his Manager/ Representative who will be supervising/making payment etc on his Behalf. • Make any direct payment to contract labours and especially on imprest voucher.

DO’s Obtain a copy of Income Tax details and Trade Licence. Obtain copy of Police Verification report of all Contract Labours. Always mention Regn number of location in all correspondence. All above mentioned Record to be kept in Original for last 3 years.

Don’t s

Contractors are also required to display many Notices, so insist on Display.

Obtain copies of Challans of PF/ESI every month from contractor.

Contract Labour (Regulation and Abolition) Act, 1970

Contract Labour (Regulation and Abolition) Act, 1970

Contract Labour (Regulation and Abolition) Act, 1970

Employees State Insurance Act, 1948
Was originally applicable to non-seasonal factories using power and employing 20 or more persons; but it is now applicable to non-seasonal power using factories employing 10 or more persons and non-power using factories employing 20 or more persons All the employees in the factories or establishments (manufacturing process) to which the Act applies shall be insured under this Act The contribution comprise of employer’s contribution and employee’s contribution at a specified rate Contribution rate : 1.75% - employees 4.75% -employers The ceiling 15,000/- gross salary. After reaching the ceiling one will be exempted. Employer is liable to contribute & deduct specified rate of amount and submit it to the Corporation within 21 days. Two contribution periods each of six months: 1st April to 30th Sept 1st Oct. to 31st March Two corresponding benefit periods of six months : 1st January to 30th June 1st July to 31st December

Employees Provident Fund & MP Act, 1952
PF and Miscellaneous Provisions Act, provides for compulsory contributory fund for the future of an employee after his retirement or for his dependents in case of his early death. Every factory engaged in any industry specified in Schedule 1 in which 20 or more persons are employed Every other establishment employing 20 or more persons or class of such establishments which the Central Govt. may notify and any other establishment so notified by the Central Government even if employing less than 20 persons. IndianOil is given exemption under rule 27-A under condition that we will comply for all employees as defined in the Act (which includes even a single Contract Labour) 1) Contractor shall deduct 12% from employee's salary (Max basic at Rs. 6500/- or more) 2) Contractor shall contribute 12% from employer's side (equal to above deduction) Percentages check in PF Challan 1) 12% of employee's contribution and 3.67% of employer's contribution in PF account 2) Remaining 8.33% in EPS account (limited to max basic of Rs. 6500) 3) 1.1% as administrative charges 4) 0.5% as EDLI charges 5) 0.01% as EDLI administrative charges

Payment of Gratuity Act, 1972
Gratuity is an amount given to employees by employer when they leave the job after completing five years or minimum 240 days per year or after retirement. Gratuity is payable under the payment of wages act. 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. Gratuity is calculated as Basic + DA divided by 26 * No of years of service *15 Display of Abstract (Form U) To keep copies of Declaration Forms signed by employees and employer

The Payment of Wages Act 1936
It is a central legislation which applies to the persons employed in the factories and to persons employed in industrial or other establishments This Act does not apply on workers whose wages payable in respect of a wage period average Rs. 1600/- a month or more. This Act has been enacted with the intention of ensuring timely payment of wages to the workers without unauthorized deductions. The salary in factories/establishments employing less than 1000 workers is required to be paid by 7th of every month and in other cases by 10th day of every month. A worker, who either has not been paid wages in time or an unauthorized deductions have been made from his/her wages, can file a Claim either directly or through a Trade Union or through an Inspector under this Act.

The Minimum Wages Act, 1948
This act provides for fixing minimum rates of wages. Wages shall mean all remuneration payable to an employed person on the fulfillment of the contract employment and includes HRA. It Includes (i) a basic rate of wages and special allowance call the cost of living allowance (ii) a basic rate with or without cost of living allowance plus any concession on the supply of essential commodities. It excludes (i) The value of rent free accommodation, supply of light, water, medical ..... (ii) Contributions paid by the employer towards the PF or any scheme of social insurance (iii) Travelling allowance / Travelling concession (iv) Gratuity The appropriate government may fix-: A minimum rate of wages for time work ("a minimum time rate"). A minimum rates of wages for piece work ("a minimum piece rate"). A minimum rate of wages on a time work basis ("a guaranteed time rate") A minimum rate of overtime work done (“a overtime rate")

The Maternity Benefit Act, 1961
To regulate employment of women for certain periods before and after child birth and to provide for maternity benefit. Payment of maternity benefit shall apply to women workers to whom ESI Act does not apply. The Act applies to all establishments in which ten or more people are employed. The maternity benefit shall be at the rate of average daily wage for the period of actual absence. The maximum period of entitlement shall be 12 weeks of which not less than 6 weeks shall precede the expected date of delivery. Maternity benefit shall be payable to employee or any other persons as per the nomination. The Amount of benefit upto the period of expected delivery shall be paid in advance. The balance due for the subsequent period shall be paid within 48 hours from delivery of child.

The Payment of Bonus Act, 1965
The Payment of Bonus Act imposes statutory liability upon the employers of every establishment covered under the Act to pay bonus to their employees. It provides for payment of minimum and maximum bonus and linking the payment of bonus with the production and productivity The Act applies to every factory where 10 or more workers are working and every other establishment in which 20 or more persons are employed, on any day during an accounting year Every employee receiving salary or wages upto Rs. 4,500 p.m. and engaged in any kind of work whether skilled, unskilled, managerial, supervisory etc. is entitled to bonus for every accounting year if he has worked for at least 30 working days in that year Contractor may pay bonus to his contract labourers

Workmen’s Compensation Act, 1923
Applicability of the Act This act is applicable to our industry/establishments/locations, if the locations does not fall under „Implemented Area” as mentioned under ESI Act. Compliance /Forms & Maintenance of Records etc In case of any accident of covered workmen (Contractor in case of contract workman), where we are liable for making payment of Compensation, following actions are to be taken:  Inform “Commissioner for Workmen‟s Compensation” in Form –EE  Send Notice/deposit Compensation with the Commissioner for  Workmen‟s Compensation” (FORM-A for Death Case and FORM-AA for Other cases)  Obtain receipt of deposit in Form number –B In case of any accident of Contract Labour, where Contractor is liable for making payment of Compensation, please advise the Contractor to take necessary actions. Important points to be kept in mind Under Section-12 of the Act, the Location Incharge as “Principal employer‟ is liable to pay the compensation to the worker of the said contractor, if Contractor fails to do so.  Principal employer shall be indemnified by the contractor and can recover the amount so paid from the contractor

The Shops And Establishments Act

 Registration of a shop or an establishment under the Act is

generally compulsory in all the States.  Registration should be applied for in the prescribed form alongwith the prescribed fee to the Chief Inspector. In case of new establishments, within 30 days from the date on which the establishment commences the work, a statement shall be sent to the Inspector concerned who on receipt of the same shall register the establishment in such manner.


 Working Hours: Daily & Weekly
 Working Spread including Break Period  Overtime Hours: Daily, Weekly & Quarterly  Weekly Off  Applicability of Gratuity  Provision for Leave Period


 Bombay Shops and Establishments Act 1948  Maharashtra Shops and Establishment Rules, 1961  Goa, Daman and Diu Shops and Establishments Act, 1973  Gujarat Shops and Establishments (Insurance) Act, 1980  Madhya Pradesh Shops and Establishments Act, 1958  Chhattisgarh Shops and Establishments Act. 1958

The Factories Act, 1948 Employee Muster Role Attendance Register Time card Register of accident and dangerous occurrences Register of adult workers Bound Inspection Book Register of overtime payments Register of factories. Record of lime washing and painting Particulars of rooms in the factory. Register of compensatory holidays Register of Leave with Wages The Payment Of Wages Act, 1936 Consolidated Register of Fines, Deductions and Advances. Register of wages Equal Remuneration Act, 1976 Details of workers in Form D CL(R&A) Act Register of contractors By Contractors Register of persons employed Muster roll Wage register or wage cum muster roll Wage slip Register of deductions Register of deductions Overtime register ESI Act, 1948 Employee‟s Register of Contributions. Accident Register Inspection Book EPF&MP Act Contribution card Eligibility Register Provident Fund ledger Inspection Book

January 15th

Name of the Statute
Factories Act, 1948 Maternity 1961 Benefit

Form/ Rule
Refer Rules to

Return/ Compliance

To be sent to
Chief Inspector / Director or Competent Authority Authority

State Annual Return

January 21st

Act, LMNO (Rule 16 Annual Return & payment Competent (1) details on 31st Dec under the Act.

January 30th

Concerned Licensing officer (ALC in our case) January 31st Concerned ESI Regional office February 1st Regional Labour Commissioner February 15th XXV [Rule 82 (2)] Annual Return by Concerned licensing Principal Employer officer ( ALC in our case) April 25th 3A/6A Annual Return Concerned Regional Officer May 12th 6 (Sec 44, Quadruplicate along with Concerned ESI office Regulation 26) challans. Monthly Return from scheduled bank along with cheque July 15th Factories Act, 1948 Refer to State Half yearly Return Chief Inspector / Director Rules or competent authority July 30th Contract Labour (R&A) XXIV Half-yearly Return by the ALC ( C ) Act, 1970 & Rules contractor October 31st Contract Labour (R&A) VII [Rule 29 (2)] Application by contractor ALC (C ) Act, 1970 & Rules for renewal of license th Employees’ State Insurance 6 (Sec 44 & November 12 Summary of contribution Concerned local office/ Act, 1948 & Rules Regulation 25 in quadruplicate challans. ESI Regional office

Contract Labour (R&A) Act, 1970 & Rules Employees’ State Insurance Act, 1948 & Rules Payment of Wages Act, 1936 Contract Labour (R&A) Act, 1970 & Rules Employees’ Provident Funds & MP Act, 1952 Employees’ State Insurance Act, 1948 & Rules

XXIV [Rule 82 (1)] 01-A (ESI Regulation 10C) V (Rule 18)

Half yearly Return by contractor (in duplicate) Annual information about factory Annual Return

Time limit Within 10 days from the date of appointment January 30 February 15 February 15 Before May 15th & Before 11th November

Act The Employees’ State Insurance Act, 1948 The Contract Labour (R&A) Act, 1970 The Contract Labour (R&A) Act, 1970 The Payment of Wages Act, 1936 The Employees’ State Insurance Act, 1948

Form/ Regulation

Name of Return /Compliance

To be sent to ESI Regional office Assistant Labour Commissioner Assistant Labour Commissioner. Chief Inspector of Factories

1&3 Declaration Form & Return of (Regulation 11,12 Declaration &14) XXIV Half Yearly ReturnBy Contractor XXV Annual Return-By Principal Employer IV Annual Return 6 Summary of contributions quadruplicate, half yearly October to March and April September after the expiry contribution period. To submitted within 42 days Half Yearly Return Half Yearly Return: By Contractor

in in ESI Regional to Office. of be Chief Inspector of Factories Registering & Licensing Officer

July 15 July 30 Before 11th November

The Factories Act The Contract Labour (R&A) Act, 1970 Insurance Act

35 XXIV 6

Return of contributions in ESI Regional quadruplicate from April to Office September to be submitted within 42 days

Thank You