Compliance

Industrial Relations Guide For Statutory Compliance

The Industrial Disputes Act, 1947

The industrial disputes act, enacted in 1947, to make provisions for investigating and settling disputes

The industrial disputes act, enacted in 1947, to make provisions for investigating and settling disputes between employee-employee or employee-employer. The main objective of this Act is to ‘maintain peace and harmony in work culture in Indian Establishments.’

This Act applies to the whole Indian nation, including establishments for business, trade, manufacture, and distributions. However, it does not encircle persons in the managerial or administrative field and persons subject to Army, Air force, and Navy.

Women Benefits

Equal Remuneration act, 1976

This Act applies to the whole Indian nation, including establishments for business, trade, manufacture, and distributions.

Provisions under this Act include 1. Not to reduce employees’ salary to adhere to the Act 2. For the same nature and amount of work, no discrimination is allowed for women. 3. During the formation of an advisory committee that works to increase employment opportunities for women, work hours and its nature shall consist of half women members.

The Industrial Disputes Act, 1947

The maternity benefit act passed in 1961. It helps women protect her employment and provides her certain months of paid leaves for business, trade, manufacture, and distributions.

The maternity benefit act passed in 1961. It helps women protect her employment and provides her certain months of paid leaves during their maternity to take care of their child. After maternity, she can continue with her job without any disturbance of made leaves.

This Act applies to all establishments like factories, shops, and private and Government sectors with ten or more employees. During her maternity, she will be paid based on average daily wages. But to gain this benefit, she must be working for an organization for at least 80 days within the past 12 months.

Further amendments of this Act in 2017, guarantees

Crcuche facility ‘Crcuche facility is available for children where an organization is employing more than 50 employees.
Work from home option ‘ women, can now continue her work directly from her home with no leave requirements and is comfortable to her.
Crcuche facility ‘Crcuche facility is available for children where an organization is employing more than 50 employees.

The Employees’ Compensation (Amendment) Act, 1923

Many services involve hard work, risk of losses, critical injuries, or even death.

Many services involve hard work, risk of losses, critical injuries, or even death.Employees’ compensation act, enacted in 1923, protects an employee or his/her dependents through compensation during any conditions mentioned above.

According to Section 17A, every employee must be well-informed about his compensations at the time of joining by the employer. Failure of such tasks may result in penalties and fines of Rs. 5000 to 50,000 as imposed by Government, under section 18A.

The Payment of Gratuity Act 1972

Payment of gratuity act guarantees benefits like gratuity and incentives to the employees working in railways, mines, factories, ports, oilfields, shops, and private sectors.

According to section1(2), state Jammu and Kashmir are not liable for this Act for plantation or ports. As per section1(3-A), in case the employee rate somehow drops below 10 for an establishment, the employer must not request for reducing gratuity. Under section2(e), this Act doesn’t apply to apprentices or civil service employees under the Central and State government.

A certain amount is deducted from monthly wages and further provided after an employee’s retirement, offering monetary help, called gratuity. Gratuity is allowed to an employee who has given continuous service for at least five years for a particular organization. As per section 4(1), gratuity is mandatorily payable for employee death or disablement, even though five years of service is pending. Under section 4(3), the maximum gratuity amount an employee is beneficial for is Rs. 20,00,000, and is liable to tax for gratuity amount more than stated.

Gratuity depends on the years of service and the last drawn salary and is calculated according to the formula

Gratuity = Last drawn salary *number of completed service years * 15/26

According to the above formula, the service year with more than six months will be considered one full year, and less than six years will be regarded as zero years.

For example, a service period of seven years and eight months will be eight years, and a service period of six years and four months will be six years.

The Employees’ Provident Fund & Miscellaneous Provisions (Amendment) Act, 1952

The statutory provident fund act is issued for the social security of the employee. Employees’ Provident Fund Act is liable for any establishment

The statutory provident fund act is issued for the social security of the employee. Employees’ Provident Fund Act is liable for any establishment employing more than 20 employees. To make this possible, every employee during his/her employment contributes some amount from their salary to the Provident Fund. Even their employer is also required to contribute to this fund. This fund then ensures social security after employees’ termination or retirement. EPF of every corresponding employee must be deducted from his/her salary and filled before the PF return due date, which is the 15th of each month.

Employees’ PF calculation is based on basic salary and DA. Other allowances like HRA, overtime allowance, incentives, etc. are not included under this. The basic wage covered in this is Rs. 15,000 monthly. PF divides into two funds; EPF (Employees’ Provident Fund) & EPS (Employees’ Pension Scheme). Consider the following PF rates declared by the government:

1. Employee Employer EPF 12% of Gross 3.67% EPS 0 8.33%

2.Total contribution 12% 12%

3. Any failure in this Act may lead to 3 years of imprisonment and a penalty of Rs. 10,000. Apart from EPF, other provident fund meanings and types include SPF – Statutory Provident Fund

4.SPF – Statutory Provident Fund

5. SPF is only meant for employees who are enrolled in Government and Semi-government enterprises.

6. UPF – Unrecognized Provident Fund Started by employers or employees in any organization, UPF is not a government-approved scheme.

7.PPF – Public Provident Fund Whether an employer or not, PPF scheme that is savings-cum-tax-savings options, is open to every Indian citizen.

The Employees’ Compensation (Amendment) Act, 1923

Many services involve hard work, risk of losses, critical injuries, or even death.

The Payment of Bonus Act (Amendment), 2007

Payment of bonus act ensures annual bonuses to be paid for employees in establishments,for business, trade, manufacture, and distributions.

Payment of bonus act ensures annual bonuses to be paid for employees in establishments, including factories with more than 20 employees. The yearly bonus is calculated based on the employees’ salary and profit of the establishment. Any employer ensures that the bonus paid must be a minimum of 8.33% and a maximum of 20%. Employees with salary 21,000 Rs. Or less are eligible for a bonus after working for 30 days in an establishment.

Bonus payment must be provided within eight months from the financial year closing. This bonus must only include basic and DA and should exclude other allowances.

For employees caught up in frauds, misconduct, or absenteeism, the establishment is not liable to pay the bonus.

The Employees’ Compensation (Amendment) Act, 1923

Employees’ State Insurance act ensures absolute medical security, including sickness, maternity, and injuries

Employees’ State Insurance act ensures absolute medical security, including sickness, maternity, and injuries for employees working in non-seasonal factories, including power with more than ten employees and non-power and other establishments with more than 20 employees.

The wage limit covered under this Act is Rs. 15,000 per month. This Act applies to all states except Manipur, Sikkim, Arunachal Pradesh, and Mizoram. Benefits can be availed through ESIC online appointment for hospitals, clinics, and practitioners.

Both employee and the employer contributes to the ESI scheme on ESIC payment portal and ESI Percentage contributions made to the same are

Contribution % of Gross pay

Employees’ contribution 0.75

Employer’s contribution 3.25

Tax Deducted at Source (TDS)

TDS or Tax Deducted at Source is a certain amount of money deducted from the employee’s payment as an account

TDS or Tax Deducted at Source is a certain amount of money deducted from the employee’s payment as an account of income tax to lower the tax evasion afterward. Employees can file a TDS return for the deducted tax, which he/she can get refunded.

Let us see the tax liability for employees under the new tax regime for the final year 2020-21

Tax slab for senior citizens aged between 60 to 80 years.

Tax exemption can be availed under two conditions

1. If ensured with a self-declaration that he/she has fulfilled the required investments under form15G/15H

2. If an assessing officer provides certification of validation. TDS will be certified form generation of specific form every year

1. Form 16 for the employee’s salary.

2. Form 16A for other than salary.

3. Form 16B-TDS on the property sale.

Wages

The Payment of Wages (Amendment) Act, 2017 (No.1 of 2017)

Payment of wages acts guarantees payment of employees on time

Payment of wages acts guarantees payment of employees on time without any deductions other than stated by the government authority. Though this doesn’t apply for employees having Rs. 24,000 wage per month.

Under section 4, every person responsible for payment of wages must fix the duration for payment, and that should not exceed above a month. Meaning, an employee can be paid daily, weekly, fortnightly, or monthly. Under section 5, for a railway, industry, or other establishments with less than 1000 employees, it must process the payment till the 7th of the subsequent month, which exceeds 10th of the month for establishments with more than 1000 employees.

According to section 5(2), if an employee resigns or is removed, his/her salary must be paid within two days of termination.

Minimum Wages Act, 1948

The Minimum Wages Act, enacted in 1948 by the Indian Parliament, states that it provides minimum wages/salary to skilled and unskilled laborers.

The Minimum Wages Act, enacted in 1948 by the Indian Parliament, states that it provides minimum wages/salary to skilled and unskilled laborers. The Constitution has defined a specific living wage that includes primary livelihood, including health, food, comfort, education, and dignity.

This Act provides for fixing the wage rate for every establishment. Criteria for following under this Act include

1. Working hours for a typical day would consist of ƒ?½ working hours per day must have one to two break/rest intervals. ƒ?½ at least one week off to be given to the labor. ƒ?½ per day wage must not be any less than given overtime rate.

2. For any employee working for a task that includes more than one employments must be given salary based on each task’s working hours.

3. The employer is permitted to maintain records of the payslips and wage structure of a particular employee.

The Employees’ Compensation (Amendment) Act, 1923

Many services involve hard work, risk of losses, critical injuries, or even death.Employees’