Legal compliances

In Human Resource Management

Presented By:
Dr. Minal Solanki
???Why to comply?
???Why to comply?
• To protect the health, safety and welfare of others
• To have improved operations and more worker
productivity
• Better Public Relations
• Higher Employee Retention
• To reduce legal problems & your risk of
fines
penalties
work stoppages
lawsuits
shutdown of your business
Laws Governing the employment of manpower
Sr. No. Name of Act/Rule
1. Child Labour Act
2. Citizenship Act
3. Employees provident fund and misc provision Act
4. ESI Act
5. ESI ( central ) Rules
6. Employment exchange ( compulsory notification of vacancies ) act
7. Equal remuneration Act
8. Minimum Wedge Act
9. Payment of bonus Act
10. Payment of Gratuity Act
11. Payment of wages Act
12. PPF Act
13. Bombay Shops & Establishment Act
14. Maternity Benefit (Amendment) Act,
15. Workmen’s Compensation Act
16. Workmen's Compensation (Amendment) Act
17. Indian Trade Union Act
18. Industrial Disputes Act
19. Shops and factories Act (for national holidays)
20. Negotiable instrument Act
21. Persons with Disabilities Act
22. SC and ST Act
23. Weekly Holidays Act
24. Official Secrets Act
25. Persons With Disabilities (Equal Opportunities, Protection of Rights and Full
Participation) Act
26. Information Technology (Amendment) Act
THE EMPLOYMENT • Public Sector and such
EXCHANGES establishments in private Sector
(COMPULSORY excluding Agriculture, where
NOTIFICATION OF ordinarily 25 or more persons are
employed
VACANCIES) ACT, 1959
• Notify all the vacancies to
No.31 of 1959
appropriate employment exchange
The Employment Exchanges • Employment returns
(Compulsory Notification of • ER-I Quarterly(31st, March, 30th June, 30th
Vacancies) Act was enacted in 1959 September and 31st December)
to provide for compulsory notification
of vacancies to the Employment
• ER-II Once in two years
Exchanges and for the rendition of • Mode of return- online portal
returns relating to Employment www.employment.gujarat.gov.in
situation by the employers. This act
came into force with effect from 1st
May, 1960.
THE MINIMUM WAGES For fixing minimum rates of wages.
ACT, 1948

• Wages shall mean Wages shall mean all remuneration payable to an

employed person on the fulfillment of the employment and includes HRA.
It Includes - A basic rate of wages and special allowance
It excludes - The value of rent free accommodation
- Supply of light, water, medical facilities
- PF /ESIC contribution paid by employer
- Travel Allowance
- Gratuity, Bonus
• Penalty:-
- The inspectorate staff of the Labor Department takes action
on complaints received from workmen/Unions.
- The penalty for violation of is fine of R.500/- or imprisonment
up to a period of six months or both.
- If a worker gets less payment, he can also file a claim before the
Competent Authority appointed under the Act, which are Deputy
Labor Commissioners for the respective districts.
- The authority can impose penalty up to 10 times the difference in
minimum wages that was due and paid
THE MINIMUM WAGES ACT, 1948 contd..

• The rates get amended twice in year – April & October

Scheduled Category Zone Basic Special Total

Employment of Salary Allowance Minimum
Workers Wage
Per Day (in Rupees)
Hospitals & Unskilled I 276.00 36.2 312.20
Nursing
Homes Semi I 284.00 36.2 320.20
Skilled
Skilled I 293.00 36.2 329.20
Unskilled II 268.00 36.2 304.20

Semi II 276.00 36.2 312.20

skilled
Skilled II 284.00 36.2 320.20
 EMPLOYEES
PROVIDENT FUND AND
MISC PROVISION 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
• It extends to the whole of India
except the State of J&K
• Every other establishment
employing 20 or more persons at
any given day
• 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
• EPF scheme is mandatory for the
employee who earns ₹15,000
salary or less per month.
• Applicable salary= Basic
salary+DA+ commissions (if
percentage of sale)
EPF Contribution Rate and Rules
 EPF Contribution Rate and Rules

Employee’s contribution:
o The Minimum 12% EPF
contribution is mandatory
o It can be voluntarily increased
up to 100% of the basic salary
by giving mandate to the
employer and can be
changed from new FY

Employer’s contribution:
o 12% of the basic salary
o The excess EPF contribution is
not mandatory for employer
o Payment of both the
contributions is to be made by
15th of the salary month
 Concession from Minimum PF Contribution

The EPF rules give concession from mandatory 12% contributions in

certain conditions. The 10% rate would be applicable in the
following condition.

• If a company employees less than 20 people.

• A company which is declared sick by the Board for Industrial and

Financial Reconstruction

• If a company has accumulated losses equal to or exceeding its

entire net worth and

• The company is from any of these sectors

(a) Jute (b) Beedi (c) Brick ( d) Coir and (e) Guar -gum Factories
EMPLOYEES STATE INSURANCE ACT
• ESI Scheme for India is an integrated social security
scheme tailored to provide Social Production to
workers and their dependents, in the organised
sector, in contingencies, such as Sickness, Maternity
and Death or Disablement due to an employment
injury or Occupational hazard
• Applicable to power using industry/factories
employing 10 or more person, manpower using
industry employing 20 or more person
• Currently hospitals are exempted from it in Gujarat
but its applicable for the contractual employees
• Wef January ESI wage limit is increased to 21000 for
ESI coverage
EMPLOYEES STATE INSURANCE ACT

• Employees’ Contribution - 1.75% of the Wages

Employers’ Contribution - 4.75% of the Wages
TOTAL ‐ 6.5 % of the Wages

Contribution Period Benefit Period

1st April to 30th September 1st January to 30th June
1st October to 31st March 1st July to 31st Dec

• Employers are exempted from the applicability of the

(a). Maternity Benefit Act (b). Workmen's’
Compensation Act
in respect of employee covered under the ESI Scheme
PAYMENT OF GRATUITY ACT 1972

• It extends to the whole of India except to the State of

Jammu and Kashmir
• 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,- (a) on
his superannuation, or (b) on his retirement or
resignation, or (c) on his death or disablement due to
accident or disease
• Gratuity is calculated as Basic + DA * No of years of service *15
26
THE MATERNITY BENEFIT (AMENDMENT) ACT,
2017
• An act further to amend the Maternity Benefit Act, 1961 and
2008
• The Act applies to all establishments in which ten or more
people are employed.
• To regulate employment of women for certain periods before
and after child birth and to provide for maternity benefit.
• To be eligible for maternity benefit, a woman must have been
working as an employee in an establishment for a period of at
least 80 days in the past 12 months.
• In amendment act the duration of paid maternity leave has
been increased from 12 weeks to 26 week- max 8weeks
before and rest thereafter
• Maternity leave for children beyond the first two will continue
to be 12 weeks.
THE MATERNITY BENEFIT (AMENDMENT) ACT,
2017

• Every establishment with more than 50 employees

to provide for crèche facilities for working mothers
and such mothers will be permitted to make four
visits during working hours to look after and feed the
child in the crèche.
• The employer may permit a woman to work from
home if it is possible to do so.
• The Maternity Benefit Amendment Act makes it
mandatory for employers to educate women
about the maternity benefits available to them at
the time of their appointment.
 THE PAYMENT OF BONUS ACT 1965

• It applies to every establishment in which twenty or more

persons are employed on any given day during the
accounting year
• Eligibility: Employee who has worked not less than 30
days in a accounting year
• It is calculated for financial year and maximum to be
paid with in 8 months from the close of the accounting
year
• FORM A, B and C are to maintained under the provision
of this act
• It is calculated minimum @8.33% and max up to 20% of
the earned salary during the accounting year
THE PAYMENT OF BONUS ACT 1965
 THE CONTRACT LABOUR (REGULATION AND
ABOLITION) ACT, 1970
• It extends to the whole of India.
• It applies–
a) To every establishment in which twenty or more workmen are
employed or were employed on any day of the preceding
twelve months as contract labour
b) to every contractor who employees or who employed on any
day of the preceding twelve months twenty or more workmen
• It shall not apply to establishments in which work only of an
intermittent or casual nature is performed.
• The eligible establishment has to get registered by giving Form-I
under this act
• After registration the liabilities goes to the principle employer for
any legal disputes
THE CONTRACT LABOUR (REGULATION AND
ABOLITION) ACT, 1970
• Under this act the Contractors shall have license to
employ contract labour.
• Application for licence shall be made in triplicate in
Form -IV to the concerned Licensing officer along
with fee and a certificate from the Principal
Employer in Form -V.
• Contractor must pay the security deposit at the rate
of Rs. 270/- for each workman.
THE CHILD LABOUR
(Prohibition and
regulation) ACT, 1986 • Applicable to the whole of
India
To prohibit the engagement of • Child means a person who
children in certain employment’s has not completed his
and to regulate the conditions of fourteen years of age
work or children in certain other
employment’s.
Other compliences

• Radiation safety rules

• Equal remuneration Act
• MCI Rules
• Nursing Council rules
• Income Tax and professional Tax rules
References
• The Research Foundation of Hospital and
Healthcare Administration
http://www.rfhha.org/index.php?Itemid=51&id=1&option=com_
content&view=article#Laws%20governing%20the%20employmen
t%20of%20manpower

• Labour Laws By P S Patel