EMPLOYEES’ PROVIDENT FUNDS & MISC. PROVISIONS ACT, 1952
Object of the Act
To provide wider terminal benefits to the Workers on completion of their employment.
Applicability
Every specified factory OR establishment in which 20 or more persons are employed.
Any factory or Establishment can also voluntarily cover under the Act, even if the number of employees are less than 20.
Eligibility
• Any person who is employed for work of an establishment or employed through contractor in or in connection with the work of an establishment and drawing salary upto Rs.6,500/- p.m. (Basic + DA).
• Any disabled employee appointed after 1.4.2008 drawing salary upto Rs.25,000/-
• Any international worker (irrespective of salary limit)
Payment of Contribution
The employer shall pay the contribution payable to the EPF, DLI and Employees’ Pension Fund in respect of the member of the Employees’ Pension Fund employed by him directly by or through a contractor.
• It shall be the responsibility of the principal employer to pay the contributions payable to the EPF, DLI and Employees’ Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.
Rates of Contribution
• Employer - 12%
• Employee - 12%
• Govt. - 1.16%
|
SCHEME |
EMPLOYEE’S |
EMPLOYER’S |
CENTRAL GOVT’S |
|
Provident |
12% | Amount > 8.33% (in case where contribution is 12% of 10%) 10% (in case of Certain Establishments as per details given earlier) |
NIL |
|
Insurance |
NIL | 0.5 | NIL |
|
Pension |
NIL | 8.33% (Diverted out of Provident Fund (12) |
1.16% |
• The employer also will pay administrative charges @ 1.11% on maximum limit of Rs.6500 whereas an exempted establishment will pay inspection charges @ 0.005% on the total wages paid.
Benefits
• Withdrawal of accumulated amount with interest on exit from employment.
• Advances in severely restricted circumstances like buying house, marriage/education, etc.
• Pension to the employees under Employees’ Pension Scheme a
• Insurance under Employees’ Deposit Linked Insurance Scheme.
Damages on Delayed Payment
• Less than 2 months ….@ 5% per annum
• Two months and above but less than upto four months …. @10% per annum
• Four months and above but less than upto six months …. @ 15% per annum
• Six months and above ….@ 25% per annum
• Simple Interest @12% p.a. on delayed payment of contribution.
Penal Provision
• For contraventions of Provisions of the Act, imprisonment upto 3 years and fine upto Rs.10,000/-.
• For repeated contraventions of the Act, imprisonment upto 5 years and fine upto Rs.25,000/-.
EMPLOYEES’ STATE INSURANCE ACT, 1948 & SCHEME
Object of the Act
To provide social insurance for the employees.
Applicability of the Act & Scheme
Is extended in area-wise to factories employing 10 or more persons and establishments employing 20 or more person.
Coverage of employees
Employees drawing gross wages upto Rs.15000/- per month, engaged either directly or thrugh contractor
Rate of Contribution of the wages
Employers’ 4.75%
Employees’ 1.75%
Manner and Time Limit for making Payment of contribution
The total amount of contribution (employee’s share and employer’s share) is to be deposited with the authorised bank through a challan in the prescribed form in quadruplicate on or before 21ST of month following the calendar month in which the wages fall due.
Benefits to the employees under the Act
Medical, sickness, extended sickness for certain diseases, enhanced sickness, dependents maternity, besides funeral expenses, rehabilitation allowance, medical benefit to insured person and his or her spouse.
WAGES FOR ESI CONTRIBUTIONS
To be deemed as wages
• Basic pay
• Dearness allowance
• House rent allowance
• City compensatory allowance
• Overtime wages
(but not to be taken into account for determining the
coverage of an employee)
• Payment for day of rest
• Production incentive
• Bonus other than statutory bonus
• Night shift allowance
• Heat, Gas & Dust allowance
• Payment for unsubstituted holidays
• Meal/food allowance
• Suspension allowance
• Lay off compensation
• Children education allowance
(not being reimbursement for actual tuition fee)
NOT to be deemed as wages
• Contribution paid by kthe employer to any pension/provident
fund or under ESI Act.
• Sum paid to defray special expenses entailed by the nature
of employment –
• Daily allowance paid for the period spent on tour.
• Gratuity payable on discharge.
• Pay in lieu of notice of retrenchment compensation
• Benefits paid under the ESI Scheme.
• Encashment of leave
• Payment of Inam which does not form part of the terms of
employment.
• Washing allowance
• Conveyance Amount towards reimbursement for duty
related journey
Contribution period
1ST April to 30TH September.
1ST October to 31ST March
Contribution period
If the person joined insurance employment for the first time, say on 5TH January, his first contribution period will be from 5TH January to 31ST March and his corresponding first benefit will be from 5TH October to 31ST December.
Penal Provision
• For contraventions of Provisions of the Act, imprisonment upto 2 years and fine upto Rs.5,000/-.
• For repeated contraventions of the Act, imprisonment upto 5 years and fine upto Rs.25,000/-.
FACTORIES ACT, 1948
Applicability of the Act
To any premises where manufacturing activities are carried out with the aid of power and where 10 or more workers are/were working OR where manufacturing activities are carried out without the aid of power and where 20 or more workers are/were working.
Employer to ensure health of workers pertaining to
• Cleanliness Disposal of wastes and effluents
• Ventilation and temperature dust and fume
• Overcrowding Artificial humidification Lighting
• Drinking water Spittoons.
Safety Measures
• Facing of machinery
• Work on near machinery in motion.
• Employment prohibition of young persons on dangerous machines.
• Striking gear and devices for cutting off power.
• Self-acting machines.
• Casing of new machinery.
• Prohibition of employment of women and children near cotton-openers.
• Hoists and lifts.
Working Hours, Spread Over & Overtime of Adults
• Weekly hours not more than 48 hours.
• Daily hours, not more than 9 hours.
• Intervals for rest at least ½ hour on working for 5 hours.
• Spreadover not more than 10½ hours.
• Overlapping shifts prohibited.
• Extra wages for overtime double than normal rate of wages.
• Restrictions on employment of women before 6AM and beyond 7 PM.
Welfare Measures
• Washing facilities
• Facilities for storing and drying clothing
• Facilities for sitting
• First-aid appliances – one first aid box not less than one for every 150 workers.
• Canteens when there are 250 or more workers.
• Shelters, rest rooms and lunch rooms when there are 150 or more workers.
• Creches when there are 30 or more women workers.
• Welfare office when there are 500 or more workers.
Employment of Young Persons
• Prohibition of employment of young children i.e. below 14 years.
• Adolescent workers (15 to 18 years of age) are permitted with less working hours and special conditions.
Annual Leave with Wages
A worker having worked for 240 days @ one day for every 20 days of working.
Penal Provision
• For contraventions of Provisions of the Act, imprisonment upto 7 years or fine upto Rs.2,00,000/-.
• For continuous contraventions of the Act, imprisonment upto 10 year and/or fine upto Rs.5,000/- per day
INDUSTRIAL DISPUTES ACT, 1947
Object of the Act
Provisions for investigation and settlement of industrial disputes and for certain other purposes.
Important Definition
Industry – has attained wider meaning than defined except for domestic employment, covers from shops with nominal employees to big industrial units.
Workman – Includes almost all category of employees, except person doing
Managerial and Administrative work, and also Supervisors earning wages more than Rs.10,000/- p.m.
Machinery to deal with Disputes
Works Committee–Joint Committee with equal number of employers and employees’ representatives for discussion of certain common problems.
Conciliation–is an attempt by Govt. Official in helping to settle the disputes.
Adjudication – Labour Court, Industrial Tribunal or National Tribunal to hear and decide the dispute.
Persons Bound by Settlement
• When in the course of conciliation proceedings etc., all persons working or joining subsequently.
• Otherwise than in course of conciliation, upon the parties to the settlement.
Period of Operation of Settlements and Awards
• A settlement for a period as agreed by the parties, or
• Period of six months on signing of settlement.
• An award for one year after its enforcement.
Conditions for Laying off
Failure, refusal or inability of an employer to provide work due to
• Shortage of coal, power or raw material.
• Accumulation of stocks.
• Breakdown of machinery.
• Natural calamity.
Lay off Compensation
Payment of wages except for intervening weekly holiday compensation 50% of total or basic wages and DA for a period of lay off upto maximum 45 days in a year.
Notice of Change
21 days notice to be given by an employer to workmen about changing the conditions of service as provided in IVth Schedule.
Prohibition of strikes & lock out
• Without giving to the employer notice of strike, as hereinafter provided, within six weeks before striking.
• Within fourteen days of giving such notice.
• Before the expiry of the date of strike specified in any such notice as aforesaid.
• During the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.
• During the pendency of conciliation proceedings before a Board and seven days after the conclusion of such proceedings.
• During the pendency of proceedings before a Labour Court, Tribunal or National
• Tribunal and two months, after the conclusion of such proceedings.
• During the pendency of arbitration proceedings before an arbitrator and two months after the conclusion of such proceedings, where a notification has been issued under Sub-Section(3A) of section 10A
• During any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement or award.
Prior Permission from the Govt.
When there are more than 100 workmen (in UP 300 or more) during proceeding 12 months, prior permission to be obtained by the Employer for Lay Off, Retrenchment or Closure.
Retrenchment of Workmen Compensation & Conditions
No employees who has worked for 240 days in a year shall not be retrenched unless paid/given:
• Retrenchment compensation @ 15 days’ wages for every completed year of service.
• Given One month’s notice or wages in lieu thereof.
• Reasons for retrenchment
• Complying with principle of ‘last come first go’.
Notice for Closure of an Undertaking
• 60 days’ notice to the authorities for intended closure in prescribed form, when there are minimum 50 workers and less than 100 workers.
• To apply for Prior permission from Govt. atleast 90 days before the intended closure, when there are 100 or more workmen during preceding 12 months (in UP 300 or more workmen)
Penal Provision
• For breach of provisions of the Act, the employer shall be punishable with imprisonment upto 6 months and/or fine not exceeding Rs.5,000/-.
• On continuity of offence fine upto Rs.200/- per day.
PAYMENT OF BONUS ACT, 1965
Object of the Act
To provide certain statutory right to the employees to share the profit of the employer.
Applicability of Act
Every factory where in 10 or more persons are employed and Other establishments in which 20 or more persons are employed on any day during an accounting year.
Certain States like Maharashtra has made this Act applicable to all the Establishments employing minimum 10 employees.
Exemption for newly set up Establishments
Newly set up establishment is exempted from paying bonus for the initial 5 years, provided no profit is made during these years. If the employer derives profit in any of the first five years, he has to pay bonus for that year.
Eligibility for Bonus
• Employees (other than Apprentice) drawing salary (basic + DA) upto Rs.10,000/- p.m.
• An employee will be entitled only when he has worked for 30 working days in that financial year.
Benefits
• Minimum Bonus is 8.33% of total salary earnings (basic + DA) for the financial year. (Calculation to be done as if the maximum salary were Rs.3,500/- p.m.)
• Maximum bonus is 20%
Disqualification & Deduction of Bonus
On dismissal of an employee for
• Fraud; or
• riotous or violent behaviour while on the premises of the establishment; or
• theft, misappropriation or sabotage of any property of the establishment or
• Misconduct of causing financial loss to the Employer to the extent that bonus can be deducted for that year.
Time Limit for Payment of Bonus
Within 8 months from the close of accounting y ear.
Set-off and Set-on
As per Schedule IV. Sec. 15
Maintenance of Registers and Records
• A register showing the computation of the allocable surplus , in Form ‘A’.
• A register showing the set-on and set-off of the allocable surplus, in form ‘B’.
• A register showing the details of the amount of bonus paid, in Form ‘C’
Filing of Retun.
Annual Return to be filed in form ‘D’ to the concerned Authority.
Penal Provision
For breach of provisions of the Act, the employer shall be punishable with imprisonment upto 6 months and/or fine not exceeding Rs.1,000.
PAYMENT OF GRATUITY ACT, 1972
Object of the Act
To provide certain reward to the employees for a long meritorious service, at the end of their services.
Applicability
Every factory, mine, oil field, plantation, port, railways, shop or establishment employing 10 or more employees
Once Act applies, it continues to apply even if employment strength falls below 10.
Eligibility
• Any person employed on wages/salary (irrespective of designation) and completed 5 years of continuous service (except in case of death), shall be eligible for gratuity at the end of their services.
Benefits
• 15 days wages (basic + DA) for every completed year of service.
• Maximum gratuity payable is Rs.10,00,000/-
Calculation Method
Gratuity = (Monthly salary /26) X 15 days X No. of year of service
Forfeiture of Gratuity
Gratuity can be forefeited on termination of an employee
• for moral turpitude or riotous or disorderly behaviour.
• Wholly or partially for wilfully causing loss, destruction of property etc.
Display of Notice
Certain notices & abstract of Act are to be displayed at conspicuous place at the main entrance in English language or the language understood by majority of employees of the factory/establishment.
Nomination
To be obtained by employer after expiry of one year’s service, in Form ‘F’
Penal Provision
• Imprisonment upto 2 years or fine upto Rs.20,000 for avoiding to make payment by making false statement or representation.
• For other contraventions of the Act, imprisonment upto one year and/or fine upto Rs.10,000/-
PAYMENT OF WAGES ACT, 1936
Object of the Act
The main object of the Act is to regulate the payment of wages of certain classes of employed persons, avoid unnecessary delay in the payment of wages and to prevent unauthorised deductions from the wages.
Applicability of Act
• Factories, industrial Establishments, Tramway service or motor transport service, Air transport service, Dock, Wharf or Jetty, Inland vessel, Mine, quarry or oil-field Plantation, Workshop, construction activities or other establishment etc.
• In the state of Maharashtra the Act is extended to Shops & commercial establishments.
Coverage of Employees
The employees drawing average wage upto Rs.10,000/- p.m.
Time of payment of wages
The wages of every person employed be paid:
• When less than 1000 persons are employed shall be paid before the expiry of the 7th day of the following month.
• When more than 1000 workers, before the expiry of the 10 day of the following month.
Mode of Payment of Wages
• All wages shall be paid in current coins or currency notes or in both.
• After obtaining the authorization, either by cheque or by crediting the wages in employee’s bank Account
• Wages exceeding Rs.3000/- to be paid by cheque/through bank (Applicable in Maharashtra only)
Fines as prescribed by
• Not to imposed unless the employer is given an opportunity to show cause To record in the register (Sec.8)
Deduction from wages
Deductions such as, fine, deduction for amenities and services supplied by the employer, advances paid, over payment of wages, loan, granted for house building or other purposes, income tax payable, in pursuance of the order of the Court, PF contributions, cooperative societies, premium for Life Insurance, contribution to any fund constituted by employer or a trade union, recovery of losses, ESI contributions etc. can be made from the wages, in accordance with Section 7.
Maximum Deductions
• The maximum permissible deductions is 50% of the wages
• In the event of deduction include payment to co-operative societies, the maximum permissible deduction is 75% of the wages.
Penal Provision
• Penalties for breach of provisions are from Rs.200/- to Rs.1000/-.
• Repeat offences attract 1 month to 6 months imprisonment and fine from Rs.500/- to Rs.3000/-
• Delayed wage payments attract penalty f Rs.100/- per day
MINIMUM WAGES ACT, 1948
Object of the Act
To fix minimum rates of wages in certain category of employments & industries.
Applicability of Act
• The Act will applicable to certain schedule of employment in respect of which Minimum rates of wages have been fixed by the Act.
• It applicable to employees directly employed or employed through contractors, in such schedule of Industry.
Fixation of Minimum Rates of Wages
The appropriate government to fix minimum rates of wages from time to time for various industries/schedule of employments.
Procedure for fixing and revising Minimum Rates of Wages
Appointing Committee issue of Notification etc.
Composition of Committee
Representation of employer and employee in schedule employer in equal number and independent persons not exceeding 1/3rd or its total number one such person to be appointed by the Chairman.
Payment of Minimum Rates of Wages
Employer to pay to every employee engaged in schedule employment at a rate not less than minimum rates of wages as fixed by Notification by not making deduction other than prescribed.
Minimum time rate wages for piece work
Not less than minimum rates wages as fixed.
Overtime
For Over time work, the wages to be paid at double the normal rate. (1½ times or for agriculture labour)
Maintenance of registers and records
• Annual Returns
• Register for Overtime
• Register of Wages
• Wages slip
• Muster Roll
Penal Provision
For breach of provisions of the Act, the employer shall be punishable with imprisonment upto 6 months and/or fine upto Rs.500/-.