The most complex law that troubles every entity (especially manufacturers) is the labour law. Today with this blog we are trying to pen down the list of labour laws that are applicable, such that you don't end up in paying heavy penalties of non complying it.
Acts Discussed:
Employees’ PF And MP Act, 1952
Employees' State Insurance Act, 1948
PT Act, 1987
The Minimum Wage Act, 1948
The Factories Act, 1948
The Payment of Bonus Act, 1965
The Apprentices Act, 1961
The Payment Of Gratuity Act, 1972
The Employees’ Compensation Act, 1923
Employees’ PF And MP Act, 1952
Objective:
To provide provident funds, pension fund and deposit linked insurance funds for employees in factories and other establishments. The employer is bound to provide the employees with Provident Fund Scheme and to make a contribution of both the employees’ and employer’s share of the fund and then deduct the employees’ share from their wages.
Applicability:
At least 20 persons must have been employed in that establishment and the establishment must be engaged in an industry specified in Schedule 1.
PF Amount:
Employees contribution: 12% of the employee’s salary goes towards contribution to EPF. Employer contributes: 3.67% to EPF, 8.33% to EPS, 0.5% to EDLI and PF Admin charges 0.5% (so technically 13%) for employer and 12% from employee.
Employees' State Insurance Act, 1948
Objective:
To secure financial relief in cases of sickness, maternity, disablement and for providing medical benefits to employees of factories and establishments, and their dependents.
Applicability:
This Act applies to factory where 10 or more persons are employed.
ESI amount:
Employee State Insurance Corporation(ESIC) is deducted on gross salary which is 0.75% from the employee contribution & 3.25% from the employer contribution.
PT Act, 1987
Objective:
Professional tax one source of revenue for the government and is used towards bettering the services for professionals in that state.
Applicability:
For every employee and for every business firm.
PT amount (For Assam):
For Income:
(i) For Income Up to Rs.10,000/- Nil
(ii) For Income More than Rs.10,000/- but less than Rs.15,000/- Rs.150/- per month
(iii) For Income Rs.15,000/- or more but less than Rs.25,000/- Rs.180/- per month
(iv) For Income Rs.25,000/- and more Rs.208/- per month
The Minimum Wage Act, 1948
Objective:
This Act aims at securing the welfare of the workers in a competitive market by providing them with the minimum wages in certain employments.
Applicability:
It applies to the employments specified in the schedule of the Act and in certain cases may extend to any other employment if the appropriate governments thinks that it is expedient to do so.
Amount:
Varies as per the level of skilled employed.
The Factories Act, 1948
Objective:
This Act aims at safeguarding the interest of workers, and it also provides for the certain standards with regard to safety, working hours and welfare of the workers.
Applicability:
This Act applies to all industrial establishments employing 10 or more workers where power is used and twenty or more in all other cases. It is applicable to both the seasonal as well as non- seasonal factories.
Implications:
Duties of employer
The factory should be kept clean with adequate lighting ventilation and drinking facilities.
Reasonable temperature for the comfort of the workers should be maintained.
Overcrowding should be avoided.
In the case of hazardous substances, additional safety measures have been prescribed from section 41A to 41H.
Maximum working hours:
It cannot be more than 9 hours a day. It cannot be more than 48 hours in a week.
Overtime wages:
It is double the rate of wages.
Total working hours including overtime should not exceed 60 hours in a week and total over time hours in a quarter should not exceed 50 hours.
The Payment of Bonus Act, 1965
Objective:
This Act provides for the payment of bonus to the employees on the basis of the profits earned by the establishment or on the basis of production.
Applicability:
Every factory as per the Factories Act,1948, Every other establishment in which 20 or more persons are employed on a day during an accounting year.
Eligibility for bonus:
Every employee working in an establishment and drawing a salary for not less than thirty days in that year shall be eligible for the bonus.
Disqualification for bonus:
Any employee who is dismissed from the service for fraud or violent behaviour while on the premises of the establishment or theft or misappropriation of any property of the establishment, shall be disqualified from receiving a bonus.
Quantum for bonus:
Minimum 8.33% and maximum up to 20% of the salary or Rs. 100/-, whichever is higher.
The Apprentices Act, 1961
Objective:
To ensure better training of the workers and to organize lay down standards for the said purpose. It strives to meet an increasing demand for a skilled craftsman. The Act also provides for the regulation and control of training of apprentices in trade.
Qualification for being engaged as an Apprentice:
The person should not be less than 14 years of age and shall also satisfy the standards of education and physical fitness as may be prescribed.
Points to be taken care of by the employer:
Stipend at the rate not less than the prescribed minimum rate, Proper health and safety measures for the apprentices.
Hours of work, overtime, leave and holidays should be in compliance with the rules provided by the Act. Apprentices are the trainees and not workers.
The Payment of Gratuity Act, 1972
Objective:
It provides a scheme for the payment of gratuity to employees.
Applicability:
It applies to every factory, mine, oilfield, plantation, port, railway companies and to every shop and establishment in which 10 or more persons are employed or were employed at any time during the one preceding year. This Act applies to all employees irrespective of their salary.
Amount of Gratuity Payable:
@ 15 days wages for every completed year of service and @ 7 days wages in case of service in a seasonal establishment, Max -10 lakhs
Formula: (last drawn basic salary + DA) / 26 days *15 *total service period.
The Employees’ Compensation Act, 1923
Objective:
It provides for the payment of compensation by a certain class of employers to their employees for injury by accident during the course of their employment. It is a guarantee against hazards of employment to which an employee is exposed because of his employment.
Payment of compensation amount:
In the case of death of a workman- minimum compensation is Rs.120000/- or an amount equal to 50% of the monthly wages multiplied by the relevant factor, whichever is higher. This is, however, subject to maximum Rs.8000/- per month w.e.f. 31st May 2010.
In the case of Permanent Total Disablement (PTD)- minimum compensation is Rs.140000/- or an amount equal to 60% of the monthly wages multiplied by the relevant factor, whichever is higher.
Relevant factor: It depends on the age of the deceased or injured workman. Higher the age, lower would be the relevant factor and vice versa. It is specified in Schedule 4 of the Act.
Note: The above is just an indicative list of acts that are applicable to industries in general.
There maybe additional laws that maybe needed to be complied based on industries, state which the entities are in. So consult a proper labour law consultant before hand.
We hope the above blog was helpful in enhancing your knowledge on the matter. In case of any queries feel free to get in touch with our team of experts.
Quote of the day:
“If you want to lift yourself up, lift up someone else.“
- Booker T. Washington
Regards
CA Umang Jain
+91-96323-32850
umang@caumang.com
©2023 by caumang.com
Comentários