India has definite laws to regulate the workforce in the industries. With various benefits put in place like gratuity, pension, insurance, etc., organizations are mandated to ensure multiple labour law compliances and procedural requirements to ensure social security of the workforce. Currently, there are various laws addressing the labour and employment scenario. However, their shortcomings have led to the introduction of 4 new labour codes that will repeal all the earlier labour and employment laws and address their shortcomings. After receiving the President’s assent, they are set to become applicable in the near future. These are:
Meanwhile, they come into effect, organizations need to comply with the existing requirements. Let’s take a look at the current major labour law compliances in India, their applicability and how they will shape in the upcoming future.
Following are the major compliances under labour laws that an organization should ensure with respect to their workforce:
Provident Fund: The provident fund requirements are regulated by the Employee Provident Fund Organisation rules and regulations. According to these rules, every establishment that has 20 or more employees should obtain registration for Provident Fund.
Following are the compliances under the Employee Provident Fund Act:
Sr. No. |
Particulars |
Due Date |
1 |
Employer and employee’s provident fund dues |
15th of the following month |
2 |
Payment of Pension Fund |
|
3 |
Payment of Insurance Fund |
|
4 |
Details of employees that are enrolled in the PF |
Within 1 month of coverage |
5 |
Addition of members in the fund |
Within 15 days of the following month |
6 |
Deletion of members |
Before 21st of the following month |
7 |
Details of the employer’s and employee’s contribution done |
Within 25th of the following month |
8 |
Nomination Form |
Upon joining the fund |
9 |
Annual Consolidated Statement of Contribution |
Submitted annually along with Form 3A |
10 |
Return of ownership of the establishment |
Within 15 days whenever there is a change in the ownership |
11 |
Details of wages and contributions |
By the 30th of April each year |
ESIC: Employee State Insurance Corporation mandates certain companies to ensure reasonable safety and health care for the employees. Therefore, every factory and other establishment as defined under the act has 10 or more employees with a monthly gross salary under Rs. 21,000 should obtain registration under the act. In some states, the limit is 20 employees. Following are the compliances in respect of ESI that the organizations shall adhere to:
Establishment Type |
Calculation of Gratuity |
Normal Establishment |
(15 * last drawn salary * no. of years of service) / 26 |
Seasonal Establishment |
7 days of wages for each season |
The Code on Social Security, 2020
The Code on Social Security Compliances, 2020 already received the President’s assent and will soon regulate the labour and employment scenario in India. The above compliances will be subsumed under this code. The code is framed keeping in mind the ongoing employment landscape and aims to cover the shortcomings of the existing laws. In a bid to cover the unorganized sector as well, the code covered multiple types of employees and workers that includes:
While the act has been drafted and approved, many of the rules and labour compliance provisions are in the stage of drafting. It can be anticipated that it will formalise the security benefits across the organised as well as unorganised sectors leading to further enhancement of labour welfare.
In case of any assistance for Social Security compliances applicable to your organization, feel free to contact the ASC Group.
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