Welcome to the Greytip Webinar on

Latest Statutory Changes in Employment Laws

Presented by :Pratik Vaidya, Managing Director

Speaker Profile

Pratik Vaidya B.Com., LLB, MBA

pratik@karmamgmt.com 

• Has 18 years of work experience

• Has served on Karma board since 2002 and has played the role of a visionary leader in the related field

• Became Managing Director of Karma Group of Companies in 2007

• Is co-editor at comply4HR.com, an online encyclopedia of Labour Laws

• Is co-founder and partner at DIYhr.in

• Is the Chief Executive Council at iNFHRA, a non-profit organization dedicated to up-skilling FM, HR and real estate resources in education, training and recognition, benchmarking of services and products related to departments and organization

Services & Pan India Reach

Topics Covered

• National Amendments– Shram Suvidha Portal– ESI Act– Payment of Bonus Act– Employees’ Provident Fund Scheme

• Other Proposed Labour Law Changes and Announcements• Impact of Amendments• Minimum Wages Act• Sexual Harassment• Maternity Benefit Amendment• Q & A

National Amendments

Shram Suvidha Portal The Shram Suvidha Portal has been a Central Government initiative to encapsulate labour law and make it easier and friendlier for all establishments.

The advantages of the Shram Suvidha portal include: • Instant generation and submission of forms • Filing IT returns online https://efilelabourreturn.gov.in

National Amendments

Employee State Insurance (ESI) Act The latest amendment to the ESI Act now allows employers, who are dissatisfied with the

orders, anoption to file an appeal before an Appellate Authority within 60 days of the order.

Also, a circular to link Pehchan card to Aadhaar card has been published by ESI: http://comply4hr.com/noti%5C2015%5CESIS2015Oct15.pdf

The wage cap has now been increased to 21,000 per month. For details on the ESIC initiative, visit

the link below:http://comply4hr.blogspot.in/2016/09/esic-wage-threshold-raised-to-rs-21000.html

National Amendments

Payment of Bonus Act In a change made this year to the Payment of Bonus Act, the notification redefines an

employee as one drawing not more than INR 21,000 per month as opposed to the earlier value of INR

10,000.

It also reclassifies the calculation of bonus for certain employees, for whom the wage is calculated as

either INR 7,000, or the minimum wage, whichever is higher.

Please note that this is applicable from 01.04.2015 onward as there is a stay order for the previous

period. http://comply4hr.com/noti%5C2016%5CPBA2016Jan1.pdf 

Employees’ Provident Fund Act

Notification to Employees’ Provident Fund Act to ensure coverage and proper inclusion of all

construction workers: The objective of this notification is to ensure that all workers are accounted for and that

their details are documented, maintained and submitted accurately.

http://comply4hr.com/noti%5C2015%5CEPF2015Oct15.pdf

 

Employees’ Provident Fund Scheme

The introduction of the online ‘Jeevan Praman’ or life certificate was intended to make submission of details and forms easier. Although it’s only an optional provision, the benefits of this option are immense. (Employees’ Provident Fund Scheme) – Go to jeevanpraman.gov.in for further

reference. http://comply4hr.com/noti%5C2015%5CEPFPS2015Oct20.pdf The amendment to the Employees’ Provident Fund Scheme makes it mandatory for all

employers to make contributions through Internet banking. Please note that drafts and cheque payments were allowed for those with contributions of under INR 1 lakh per month. However, with effect from 2016, all payments need to be made electronically.

Also, note that the five-day grace period is withdrawn from February 2016. http://comply4hr.com/noti%5C2015%5CEPFS2015Aug19.jpg

 

Employees’ Provident Fund Scheme

TDS will not be applicable in the following cases, if:· PF is transferred from one account to another· Member’s service is terminated due to ill-health of the member/ discontinuation of business by

employer/ completion of project/ other cause beyond the control of the member· Employee withdraws PF after a period of five years · PF payment is lesser than INR 30,000 but the member has rendered service lesser than five years

TDS will be applicable in the following cases… • If an employee withdraws a PF amount more than or equal to INR 30,000, with service less than five

years, then – TDS will be deducted @ 10% if Form-15G/ 15H is not submitted, provided PAN is submitted – TDS will be deducted @ maximum marginal rate (i.e. 34.608 %), if employee fails to submit

his/ her PAN

Note: TDS will be deducted under Section 192A of Income Tax Act, 1961. Form 15H is for senior citizens (60 years and above) and Form 15G is for individuals having no taxable income.

Other Proposed Labour Law Changes and Announcements

• For startups, the government announced Labour Law exemption up to three years.• Labour Minister Bandaru Dattatreya said, “Start-ups have been exempted from nine

Labour laws for a period of three years to promote and incentivize the entrepreneurial ecosystem.”

• They will be allowed to self-certify compliances.    • They will be exempted from inspection under BOCW, Inter-State Migrant Act, Payment

of Gratuity, Contract Labour, etc. • 44 labour laws are being consolidated into four labour codes. Out of these four, two

have been finalized and the other two are underway. The two codes on social security and working conditions will be finalized within a month. 

• Under the PF Act, the new rate of interest is now declared as 8.8%.• There is a proposal to fix universal minimum wages for contract labour at INR 10,000.

Other Proposed Labour Law Changes and Announcements

• The proposed amendment to the Industrial Disputes Act will allow companies employing up to 300 workers to fire or hire employees without seeking any government permission. Note: The earlier limit was 100 workers.

• Creating a labour union will become more difficult as 30 per cent of workers will be required to sign up for its creation. Previously, only 10 per cent of the workers were needed.

• In the Apprentices Act, the government is seeking to expand the scope of employment for apprentices on the shop floor.

Year How much an apprentice will getFirst Year 70% of what a semi-skilled worker getsSecond Year 80% of what a semi-skilled worker getsThird Year 90% of what a semi-skilled worker gets

Labour Law Amendments in Other States…

• The Madhya Pradesh (MP) government has proposed amendments to eight labour laws, including the Industrial Disputes Act 1947, the Factories Act 1948 and the Contract Labour Act 1970.

• MP also proposed changes to The Building and Other Construction Workers (BOCW) Act, the BOCW Workers Cess Act, the Child Labour Act, and the Inter-State Migrant Workmen and Motor Transport Workers Act.

• The Haryana government is getting major labour reforms cleared in their next assembly session to push the Contract Labour Act, which will require only units with more than 100 workers to register with the government. Please note that currently, units with 20 or more workers are required to do so.   

• As a shift in archaic labour laws, the Karnataka state government is ready to allow all women to work night shifts, which is currently limited to only those employed with IT/ITES companies.

• ESI will launch a scheme for the unorganized sector workers. This scheme will be launched on a pilot basis for autorickshaw drivers in Delhi and Hyderabad.

Impact of Amendments

• Now, companies have the flexibility to hire or fire employees to adjust to the supply-demand scenario that exists in the market. Loss-making businesses can be dumped without delay or without loss of precious resources.

• With the reduced thresholds for labour union memberships, inter-union conflicts and multiplicity can be reduced or even completely avoided.

• As anticipated, business chambers in India have welcomed these changes as a positive step to encourage employment generation and focus on production.

• The Confederation of Indian Industry has stated: "We have been recommending these key reforms for bringing in simplification and flexibility in engagement and deployment of labour, which should be the two key cornerstones for any labour law reforms.”

Minimum Wages Act

Several new Minimum Wages Acts have been brought into force, including the Central Government Minimum Wages Act and the UP Government Minimum Wages Act for the last quarter.

Visit this link to view UP Minimum Wages Act:http://comply4hr.com/noti%5C2016%5CMWA2016Oct1.pdf

Visit this link to view the Central Government Minimum Wages Act:http://comply4hr.com/noti%5C2016%5CMWA2016Sep29.pdf

Sexual Harassment

The Central Government has put together an excellent initiative that details sexual harassment at the workplace and its redressal.

For a full copy of the document, visit:http://comply4hr.com/noti%5C2015%5CSHWWA2015Nov1.pdf

Maternity Benefit Amendment

• For more details, visit: http://comply4hr.com/noti%5C2016%5CMBA2016Sep1.pdf

Questions

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