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In the session
Human ResOuRceHuman ResOuRce
sTaTuTORY HR/LeGaLsTaTuTORY HR/LeGaL
FOR ANY SUCCESSFUL ORGANISATION,
SOUND COMPLIANCE OF VARIOUS
LAWS IS VERY IMPORTANT .
WITHOUT PROPER LEGAL FOUNDATION,
ORGANISATIONS CAN NOT GROW AND
SURVIVE.THEY MAY INVITE SERIOUS
PROBLEMS FROM GOVT. AGENCIES,
Labour Welfare Fund
The Maternity Benefit Act
All the employees drawing a gross salary up to Rs. 15000/-in the
factories or establishments to which the Act applies shall be
insured under this Act.
The contribution comprises of employer’s contribution and
employee’s contribution at a specified rate
Contribution rate : 1.75% - (Gross earned salary) -employees
4.75% - (Gross earned salary)-employers
Employer is liable to contribute & deduct specified rate of amount
and submit it to the Corporation within 21 days of the month.
Two contribution periods each of six months:
April to 30th
Oct. to 31st
Two corresponding benefit periods of six months :
January to 30th
July to 31st
PF and Miscellaneous Provisions Act. 1952, provides for compulsory
contributory fund for the future of an employee after his retirement or for
his dependents in case of his early death.
Applicable to every organisation engaged in any industry specified in
Schedule 1 in which 20 or more persons are employed.
PF is contributed from both the sides @12% of the basic salary subject to a
maximum basic of Rs. 6500/-.
Out of 12% Employer’s contribution, 8.33% goes towards employees
pension scheme and remaining 3.67% goes to the PF account of the
Professional tax or employment tax is a state-based tax. It is
allowed as a deduction from the gross income before computing
PT is deducted slab wise. –
Rs. 01 to 5000 - Nil
Rs .5001 to 10000- Rs. 175
and above Rs. 10000 - Rs. 200 per month except Rs 300 in the
month of February.
Gratuity is payable to an employee
under the payment of wages act 1972.
(a) on superannuation, or
(b) on retirement or resignation, or
(c) on death or disablement due to
accident or disease.
Gratuity is calculated as Basic + DA
divided by 26 * No of years of service *15.
To regulate employment of women for certain periods before
and after child birth and to provide for maternity benefit.
Payment of maternity benefit shall apply to women workers to
whom ESI Act does not apply.
The Act applies to all establishments in which ten or more
people are employed.
The maternity benefit shall be at the rate of average daily wage
for the period of actual absence. The maximum period of
entitlement shall be 12 weeks .
The Amount of benefit up to the period of expected delivery
shall be paid in advance. The balance of Salary due for the
subsequent period shall be paid within 48 hours from delivery
Half yearly contribution to be paid to Maharashtra Labour
Welfare Fund as on 30th
June & 31th Dec. as per Act 1953.
Contribution : Employee Employer
Salary up to and Below Rs. 3000 Rs. 6/- Rs. 18/-
Salary above Rs. 3000 Rs. 12/- Rs. 12/-
The following steps are required to be taken with
immediate effect –
1. IDS Software to be used to replace manual
payroll from the Salary of Oct. 2012 onwards.
2. The Salary break up to be revised as per
following standard format –
i) Basic Pay - 40% of Gross.
ii) HRA - 40% of basic pay
iii)Conveyance Allowance –
Rs. 800/- Asst. Manager & above.
Rs. 500/- Below Asst. Manager.
3. EmployEEs statutory3. EmployEEs statutory
dEductions –dEductions –
i)i) PF –PF – 12% of basic pay subject Maximum Basic of Rs.
ii)ii) ESIC –ESIC – 1.75% of gross earned salary, payable up to
Rs. 15000/- Per month.
iii)iii) Professional Tax -Professional Tax -
Rs. 01 to 5000 - Nil
Rs .5001 to 10000 – Rs. 175
and above Rs. 10000 - Rs. 200 per month except Rs
300 in the month of February.
iv)iv) Labour Welfare Fund –Labour Welfare Fund –
Contribution : (Employee Contribution half yearly)
Salary up to and Below Rs. 3000 - Rs. 6/-
Salary above Rs. 3000 - Rs. 12/-
i)i)PFPF -- 12% of basic pay subject to maximum
basic of Rs. 6500/-
ii)ii) ESICESIC –– 4.75% on gross earned salary up to
15000/- Per month.
iii)iii) Labour Welfare Fund –Labour Welfare Fund –
Salary up to Rs. 3000 - Rs. 18/-
Salary above Rs. 3000 - Rs.12/-
BENEFITS UNDER STATUTORY DEDUCTIONSBENEFITS UNDER STATUTORY DEDUCTIONS
A)A) Provident Fund :Provident Fund :
i) Final withdrawal at the time of leaving service.
ii) Advance for purchase or repair of House, LIC
premium, Marriage of Son/Daughter etc.
iii) Life long pension to the member & to his/her
nominees after death.
iv) Insurance benefits on the death of Member while
v) Interest @ rate 9.5 % on the deposits & the same is
exempt from Income Tax.
B)B) ESIC :ESIC :
i) Free medical treatment is offered to employees
at ESI Hospitals, Dispensaries.
ii) During sickness of Employees, 7/12 of normal
wages will be paid by ESI as compensation .
iii) Maternity Benefits for 12 weeks.
iv) Injury during the course of EMPLOYMENT
resulting in temporary /permanent
disablement entitles the covered EMPLOYEE
to a regular payment to substitute his/her lost
V) Death during the course of EMPLOYMENT
entitles dependents to a regular payment.
vi) One time payment of Rs. 1000/- to help meet
vii) Cashless provisions of Super specialty
Services through network Hospitals have been
vii) Issue of smart Cards i.e. ‘Pehchan’ &
networking of all ESI Institution for easy
PENALTIES FOR NON COmPLIANCE OF STATUTARYPENALTIES FOR NON COmPLIANCE OF STATUTARY
i)i) PF :PF : Any employer who contravenes any of the provisions of
the Act is liable to be arrested without any warrant being
issued in respect of a cognizable offence. Whereas
defaults by employer in paying contributions or
inspections, administration charges attract imprisonment
up to 3 years and fines up to Rs. 5,000/-. In case if offence
is repeated, imprisonment may be extended to 5 years
but not less than 2.
ii)ii) ESIC :ESIC : For employees contribution , imprisonment for 2
years to maximum 5 years and/ or fine of Rs. 25,000/-
For employers contribution imprisonment for 6
months to maximum 3 years and / or fine of
iii)iii)Professional Tax -Professional Tax - Penalty for "late application"
for enrolment/registration [Sec. 5(5)]
The prescribed authority may impose penalty of ` 5
for each day of delay in case of an employer for
registration and of ` 2 for each day of delay in case
of any person for enrolment, after giving a
reasonable opportunity of hearing.
Penalty for giving "false information in any
application" for enrolment/registration [Sec. 5(6)]
The authority may impose penalty equal to 3 times
the tax payable under the Act, after giving hearing
opportunity. (Up to 30.4.2002, penalty was restricted
to ` 1,000/-).
Penalty for "late filling of returns" by Employer [Sec.
The authority may impose penalty of ` 300 per
Penalty for "Non-payment or late payment of tax."
by Enrollee/Employer (Sec. 10)
The authority may impose a penalty equal to 10%
of the tax due.
Interest on late payment of tax. (Sec. 9)
The interest for late payment of tax or any
additional demand of tax raised in assessment is
1.25% p.m. with effect from 1-7-2004 (2% p.m. up
Interest on refund of excess payment of tax (Sec.
If any refund is due from any order in respect of
period 1.4.2004 and onwards then interest on refund
@ 6% p.a. is receivable by such person entitled to
refund, for maximum 18 months.
The present day legal climate is one of
uncertainty and confusion. In most cases, a
law comes to light only after its
contravention, resulting in severe penalties.
Statutory Compliances is a must in keeping
you away from the long arm of the law!
Mr. Ravindra NikamMr. Ravindra Nikam
Asst. Manager Human Resource