Labour laws ppt

CA Vivek Agarwal
FCA, DISA (ICAI), B.Com
cavivekslg@gmail.com +91 9832373066
www.facebook.com/trpvivek @trpvivek
SEMINAR ON
16TH July’ 2015
ICAI, EIRC, Kolkata

The legislations can be categorized as follows:
 Labour laws enacted by the Central Government, where the Central
Government has the sole responsibility for enforcement.
 Labour laws enacted by Central Government and enforced both by Central
and State Governments.
 Labour laws enacted by Central Government and enforced by the State
Governments.
 Labour laws enacted and enforced by the various State Governments which
apply to respective States.
Structure of Legislations :

The Employees’ State Insurance Act, 1948
The Employees’ Provident Fund and
Miscellaneous Provisions Act,1952
The Dock Workers (Safety, Health and Welfare)
Act, 1986
The Mines Act, 1952
The Iron Ore Mines, Manganese Ore Mines and
Chrome Ore Mines Labour Welfare (Cess) Act,
1976
The Iron Ore Mines, Manganese Ore Mines and
Chrome Ore Mines Labor Welfare Fund Act, 1976
The Mica Mines Labour Welfare Fund Act, 1946
The Beedi Workers Welfare Cess Act, 1976
The Limestone and Dolomite Mines Labour Welfare
Fund Act, 1972
The Cine Workers Welfare (Cess) Act, 1981
The Beedi Workers Welfare Fund Act, 1976
The Cine Workers Welfare Fund Act, 1981
Labour laws enacted by the Central Government, where the Central
Government has the sole responsibility for enforcement

The Building and Other Constructions Workers’ (Regulation
of Employment and Conditions of Service) Act, 1996.
The Child Labour (Prohibition and Regulation) Act, 1986.
The Contract Labour (Regulation and Abolition) Act, 1970.
The Equal Remuneration Act, 1976.
The Industrial Disputes Act, 1947.
The Industrial Employment (Standing Orders) Act, 1946.
The Inter-State Migrant Workmen (Regulation of
Employment and Conditions of Service) Act, 1979.
The Labour Laws (Exemption from Furnishing Returns and
Maintaining Registers by Certain Establishments) Act, 1988
The Maternity Benefit Act, 1961
The Minimum Wages Act, 1948
The Payment of Bonus Act, 1965
The Payment of Gratuity Act, 1972
Labour laws enacted by Central Government and enforced both by
Central and State Governments
The Payment of Wages Act, 1936
The Cine Workers and Cinema Theatre Workers (Regulation
of Employment) Act, 1981
The Building and Other Construction Workers Cess Act,
1996
The Apprentices Act, 1961
Unorganized Workers Social Security Act, 2008
Working Journalists (Fixation of Rates of Wages Act, 1958
Merchant Shipping Act, 1958
Sales Promotion Employees Act, 1976
Dangerous Machines (Regulation) Act, 1983
Dock Workers (Regulation of Employment) Act, 1948
Dock Workers (Regulation of Employment) (Inapplicability to
Major Ports) Act, 1997
Private Security Agencies (Regulation) Act, 2005

The Factories Act, 1948
The Employers’ Liability Act, 1938
The Motor Transport Workers Act, 1961
The Personal Injuries (Compensation
Insurance) Act, 1963
The Personal Injuries (Emergency Provisions)
Act, 1962
The Plantation Labour Act, 1951
The Sales Promotion Employees (Conditions
of Service) Act, 1976
The Trade Unions Act, 1926
Labour laws enacted by Central Government and enforced by the
State Governments
The Weekly Holidays Act, 1942
The Working Journalists and Other
Newspapers Employees (Conditions of
Service) and Miscellaneous Provisions Act,
1955
The Workmen’s Compensation Act, 1923
The Employment Exchange (Compulsory
Notification of Vacancies) Act, 1959
The Children (Pledging of Labour) Act 1938
The Bonded Labour System (Abolition) Act,
1976
The Beedi and Cigar Workers (Conditions of
Employment) Act, 1966

Classification of LABOUR LAWS in India
I. Laws related to Industrial Relations such as:
Trade Unions Act, 1926, Industrial Employment Standing Order Act, 1946,
Industrial Disputes Act, 1947.
II. Laws related to Wages such as:
Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965.,
Working Journalists (Fixation of Rates of Wages Act, 1958 (Majhithia Wage Board)
III. Laws related to Working Hours, Conditions of Service and Employment such as:
Factories Act, 1948., Plantation Labour Act, 1951., Mines Act, 1952., Contract Labour (Regulation
& Abolition) Act, 1970, Sales Promotion Employees Act, 1976, Inter-State Migrant Workmen
(Regulation of Employment and Conditions of Service) Act, 1979, Building & Other Construction
Workers (Regulation of Employment & Conditions of Service) Act, 1996, Building and Other
Construction Workers Welfare Cess Act, 1996, Cine-Workers and Cinema Theatre Workers
(Regulation of Employment) Act, 1981,, Industrial Employment (Standing Orders) Act, 1946,
Mines and Mineral (Development and Regulation Act, 1957 etc.

Classification of LABOUR LAWS in India……(Contd..)
IV. Laws related to Equality and Empowerment of Women such as:
Maternity Benefit Act, 1961, Equal Remuneration Act, 1976.
V. Laws related to Deprived and Disadvantaged Sections of the Society such as:
Bonded Labour System (Abolition) Act, 1976, Child Labour (Prohibition & Regulation) Act 1986,
VI. Laws related to Social Security such as:
Employees’ Compensation Act, 1923., Employees’ State Insurance Act, 1948., Employees’
Provident Fund & Miscellaneous Provisions Act, 1952., Payment of Gratuity Act, 1972… and so on

What will we cover today ?
 Payment of Wages Act’ 1936
 Minimum Wages Act’ 1948
 Social Security Measures and Schemes Enacted by the State Govt.
 Employees’ Provident Fund & Misc. Provisions Act’ 1952
 Employees’ State Insurance Act’ 1948

Payment of Wages Act’ 1936
The Act provides a summary remedy to recover wages earned in an office and not
paid BUT does not provide a remedy for investigation of quarrels which concern the
office itself.
The main purpose of the Payment of Wages Act, as revealed from its provisions, is the
prevention of illegitimate deduction from the wages of an employee or delay in
payment of wages (Section 15).
•Deduction of security deposit from salary of employees not allowable under the Act.
•Compliances by employer : -
•Annual return in Form IV to be submitted annually (calender year basis).
•Notices and Abstract of Act to be displayed at the establishment.
•Wage Records to be maintained by the Employer.
•Records to be preserved for a period of 3 years.

Minimum Wages Act’ 1936
The Act aims and seeks to provide minimum wages in industries in which
there is no arrangement for regulation of wages on a just and reasonable
basis through collective bargaining.
•Compliances by employer : -
• Annual return in Form III to be submitted annually (calendar year basis).
• Notices and Abstract of Act to be displayed at the establishment.
• Wage Records to be maintained by the Employer (Register of Wages & Pay slip)
• NO Time limit has been prescribed for preserving the records.
•In case wages are fixed through a bi-partite or tri-partite agreement : -
•Minimum Wages as prescribed should be adhered to,
•In case minimum wages are not adhered to then a copy of such agreement
should be forwarded to the jurisdictional JLC or DLC for consent and
approval.

Social Welfare Scheme run by Labour Department, Govt. of West Bengal:-
State Assisted Scheme of Provident Fund for Unorganised Workers
A beneficiary enrolled under this scheme , have to deposit @ Rs.25/-per month and Govt. will
contribute @ Rs.30/- per month against his/ her name. Further the beneficiary will get
interest(presently 8.8%) accumulated thereon. At the time of maturity i.e. on attaining the age of 60
yrs or untimely death, the beneficiary/nominee will get the total deposit amount along with the govt.
contribution and the interest accrued thereon.
Age must be between 18 and 60 yrs. Monthly income should be below Rs.6500/-.
It is to be noted if a beneficiary is registered at the age of 18 yrs and continues till the age of 60 yrs,
the beneficiary will get a sum of Rs.250000/- (approx.).
In case of Normal Death the nominee will get a sum of Rs.50000/- and in case of Accidental Death the
nominee will get a sum of Rs.150000/-
A maximum amount of Rs.10000/- will be given as health benefit in a Year under the scheme.

Building and Other Construction Workers Welfare Scheme:-
The workers engaged in construction work like mason, carpenter, electrician, plumbers etc.
may be enrolled in this scheme depositing Rs.20/- as registration fees and Rs.30/- as
subscription for a year.
Age should be between 18yrs to 60yrs.
Various benefits like normal death, accidental death, funeral, health Benefits, education for
the children, aid for buying cycle, tools and Spectacles, Aids for marriage, maternity benefit
are provided.
After attaining the age of 60yrs the beneficiary will get pension for atleast Rs.750/- per
month. After the death of beneficiary the nominee will get @50% per month as family
pension.
The beneficiary will also get the total deposit along with interest @8% In case of attaining
60 yrs or death.

West Bengal Transport Workers Social Security Scheme :-
The workers engaged in public transportation like bus, taxi, van, auto-rickshaw, lorry,
truck etc. may be enrolled in this scheme depositing Rs.30/- as registration fees for life
time.
Age should be between 18yrs to 60yrs.
Various benefits like normal death-50000, accidental death-200000, health benefits,
education for the children, Aid for marriage for 2 daughter are provided.
After attaining the age of 60yrs the beneficiary will get pension for at least Rs.1500
month. After the death of beneficiary the nominee will get @50% per month as family
pension.

Employees' Provident Fund & Misc. Provisions
Act’ , 1952

Applicability
Every establishment where 20 or more persons are employed.
Employee Eligibility
• Any person who is employed directly or employed through contractor
• Employees contribution up to a Salary (Basic + DA + Retaining Allowance +
Cash Value of Food Concession) less than or equal to Rs.15000/-
• Apprentices are not to be treated as “employees” under the Act
Maximum Statutory limit for Contribution under EPF and MP Act’
1952 is Rs 15000/- w.e.f. 01.09.2014
Employees' Provident Fund Scheme, 1952

Rate of Contribution
• Employee: 12% on Basic + DA + CVFA
• Employer: 13.36% on Basic + DA + CVFA
• [(PF-3.67% + 0.85%) + (EDLI-0.5% + 0.01%) + (Pension-8.33%)]
• * 0.85% Is PF Administrative charges payable in A/c 2 (subject to minimum of Rs
75/- per month for non-functional establishment and Rs 500 per month for other
establishments,
• 0.01 % is ELDI Adm. Charges payable in A/c 22 (subject to minimum of Rs 25/- per
month for non-functional establishment and Rs 200/- per month for other
establishments.
Monthly Remittance of Contribution & Return of employees
• Remittance of Contribution (PF Challan), for the previous month, on or before
15th of following month
• ECR copy with details of the employees deployed

PF Deductions for employees:
 PF deduction is mandatory for all the employees whose Basic + DA is less than or
equal to 15000.
 Employees with Basic + DA more than 15000 have an option to opt out of PF scheme.
 Deduction will be 12% of Basic + DA for an employee.
 If the Basic + DA is more than 15000, employer have an option to pay 12% of actual
amount or Rs. 1800 (12% of 15000).

 All the organizations having an employee strength of 20 or more than 20 are
eligible for PF deductions.
 Employer has to contribute 13.61% towards PF deduction. It is divided as:
- Pension Fund : 8.33%
- Provident Fund : 3.67%
- Employee Deposit Linked Insurance : 0.5%
- Administrative Charges for PF Scheme: 0.85% (Subject to conditions as discussed)
- Administrative Charges for EDLI Scheme: 0.01% (Subject to conditions as discussed)
PF Deductions for employees:

Tax benefit:
 Sec 80 (C): Tax exemption on the investment up to 1.50 lac.
 Sec 10 10 (C): Avail income tax exemption on the withdrawn PF amount. However,
withdrawal of PF accumulations where duration of employment is less than 5 years
has now been made subject to deduction of tax at source.
Returns:
 The current rate of interest on PF is 8.75% (For FY 2014-2015)
Tax Benefit and returns:

S.No Form no. Description
1 Form 2 Nomination form at the time of joining an organization.
2 Form 19 PF withdrawal after resignation.
3 Form 10 C Pension withdrawal after resignation.
4 Form 10 D
Employee completed 10 year’s of service/attained 58 year’s age. The amount
will be paid as pension.
5 Form 20 Claim PF amount for deceased member.
6 Form 13 For transfer of PF a/c. (NOW ONLINE)
7 Form 31 For withdrawing advance from PF account.
Forms to be filled by the employees:

Forms to be filled by the employees:
S.N
o
Form No. Due Date Frequency Description
1 Form 5 25th of every
month
Within 15
days
Employee joining an organization. (Now only
through Online ECR)
2 Form 10
25th of every
month
Monthly
Resigned Employee details (Now only through
Online ECR)
3 Form 12 A 25th of every
month
Monthly
contains consolidated details of that particular
month- new joinees, left employees and employer-
employee PF contributions. (Now only through
Online ECR)
4 Form 3A 30th April Yearly Employee contribution details (Now only through
Online ECR)
5 Form 6A 30th April Yearly Employees consolidated contribution list. (Now only
through Online ECR)
6 Form 5A Inception Once When an organization registers at EPF, India. Online
through ECR portal

• Login to http://esewa.epfoservices.in/
• Upload the ECR file
• On successful upload of the ECR file, a Summary page of uploaded ECR file will
appear.
• Fill in the details regarding EDLI and EPF/EDLI administrative/inspection charges.
• On click of submit button, a digitally signed PDF File will appear.
• Once you approve the PDF file, a Challan will be generated with a TRRN (Temporary
Return Reference Number) along with an acknowledgement slip for the uploaded
ECR file. Print the challan and make the remittance.
How to file PF?

Payment Options:
There are three options:
A: If you are a CINB (Corporate Internet Banking) customer of SBI you can make online
remittance using the TRRN.
B: If you do not have a bank account as above then you can pay online through any other
bank too on the online payment portal provided on www.epfindia.gov.in
B: The challan along with DD/cheque can be deposited to any of the SBI branches.
Note: The challan generated will be valid only for 15 days.

How to fill ECR?
• Step 1: Use any Spreadsheet (Open Office, Excel, Lotus etc,) for creating the member details
as per the prescribed format and save the file in CSV (Comma delimited) format.
• Step 2: Open the CSV file in any text editor (notepad, edit plus, etc.,) and replace all “,” with
“#~#”. Save the CSV file.
• Step 3: Change the file extension from CSV to TXT. Your file will be ready for upload.

Universal Account Number Employees Portal
Claim settlement status check
EPF Balance check through SMS on mobile
Online filing of grievances
Online filing of transfer claims by employee
Online payment facility for NON SBI CBIN Employers
Online Registration of employers
Online filing of ECR/ challan generation
Online Transfer claim employers portal

Inspections/ Assessments (Section 7A)
After the allocation of Labour Identification Number (LIN) by the Ministry of
Labour, now inspections are selected online based on certain criterion(s).
On inspection by the Enforcement Officers, in case the requirement of the
purpose of inspection is not fulfilled, the report is subject to assessment of
contributions payable by the jurisdictional Assistant/Regional PF Commissioner
and proceeding u/s 7A of the Act is initiated.
Manual selection of inspections is done only in cases where there is any specific
complaint by an employee or trade union.

Levy of interest and damages
Interest u/s 7Q
Interest @ 12% per annum is levied in case of belated payment of contributions.
Damages u/s 14B
Damages u/s 14B is further levied as a penal action in case of belated payment of
contributions as under: -
5 % Delay Upto 2 months
10 % Delay 2 months – 4 motnhs
15 % Delay 4 months – 6 months
25 % Delay above 6 months

Employee’s State Insurance Act’ 1948

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
ESI SCHEME
Employees' State Insurance Act’ 1948

The ESI Act 1948 applies to
Non – seasonal Factories using power in and Employing ten (10) or
More persons
Non – seasonal and non- power using factories and
establishments employing twenty(20) or more persons (However,
vide a notification shops and establishments employing 10 or more
employees are coverable under the Act w.e.f. 10.2.2011)
Educational institutions and private nursing homes are coverable
under the ACT w.e.f. 26.8.2006 (In West Bengal).
Employees of the Factories and Establishments in receipt of wages
not exceeding Rs.15000 /- Per month are covered under this Act.
[SINCE COVERAGE UNDER THE ESI ACT IS BY AREA BASED
NOTIFICATIONS, THE AREA IN WHICH AN INSTITUTION IS LOCATED
NEEDS TO BE NOTIFED FOR THE PURPOSE OF COVERAGE UNDER THE
ACT)

The ESI Act 1948 applies to ……
A Chartered Accountant’s office/firm too.
Vide amendment in West Bengal Shops and Establishment by
Amendment Act of 1981, such offices in included within the definition of
Commercial Establishment.
However, apprentices are not deemed to be employees under the Act.

WAGES…..Defination of….
Wages means all remuneration paid or payable in cash to an employee, if
the terms of the contract of employment, express or implied, were fulfilled
and includes any payment to an employee in respect of any period of
authorised leave, lock out, strike which is not illegal or layoff and other
additional remuneration, if any, paid at intervals not exceeding two
months, but does not include :-
a). Any contribution paid by the employer to any pension fund or
Provident fund, or under this act;
b). Any traveling allowance or the value of any traveling concession;
c). Any sum paid to the person employed to defray special expenses
entailed on him by the nature of his employment ; or
d). Any gratuity payable on discharge.

CONTRIBUTIONS
The Scheme is primarily funded by contribution raised from
Insured Employees and their employers
Payable such as
1. Employees’ Contribution – 1.75% of the Wages
2. Employers’ Contribution – 4.75% of the Wages
TOTAL - 6.50% of the Wages
Employees in receipt of an average daily wage of Rs.
100/- or Less, are exempted from Payment of their share of
contribution (w.e.f. 01.07.2011) but are entitled to all social
security benefits under the Scheme.

STATEMENT OF ESI CONTRIBUTIONS FOR THE MONTH OF ………………….
Sl
Name of
Employee
Insurance
Number
No of
Days
Rated
Rate of
pay
Total
Average
Pay
ESI
Deduction
Employers
Contributions
Total
Contributions
1Vijay 4102255441 26 Daily 150 3900 150 69 186 255
2Ram 4102255442 25 Daily 150 3750 150 66 179 245
3Prabhu 4102255443 24 Daily 90 2160 90 0 103 103
4Shyam 4102255444 26 Daily 230 5980 230 105 285 390
5Kishore 4102255445 26 Daily 225 5850 225 103 278 381
6Ashok 4102255446 26 Daily 225 5850 225 103 278 381
7Nirmal 4102255447 18 Monthly 4000 2769 153.83 49 132 181
8Vimal 4102255448 16 Monthly 3000 1846 115.37 33 88 121
9Kumar 4102255449 12 Monthly 2500 1154 96.16 0 55 55
10Ashim 4102255450 10 Monthly 2400 923 92.3 0 44 44
11Jayanto 4102255451 24 Monthly 6000 5538 230.75 97 264 361
39720 625 1892 2517

CONTRIBUTIONS AND BENEFIT PERIOD
Employees covered under the ESI Act, are required to pay contribution
towards the scheme on a monthly basis. A contribution period means a six
month time span from 1st April to 30th September and 1st October to 31st
March.
Cash benefits under the scheme are generally liked with contributions
paid. The benefit period starts three months after the closure of a
contribution period. The two type of periods are elucidated below.
Contribution Period Benefit Period
1st April to 30th September 1st January to 30th June
of the following year
1st October to 31st March 1st July to 31st Dec.

The Compliances under the ESI Act have been made
online mandatorily over the past few years and all
employers are required to file salary details online.
All Employers have been issued unique User-Ids and
Passwords to logging on the ESIC portal.
For New Registrations, a temporary user id can be
generated by the Establishment itself, which on
allotment of code number is suspended and a new Id
and Password is issued.

Assessment :
Defaulter establishments are selected by the department and notice in Form C-
18(adhoc) is issued to the respective establishment.
Proceedings u/s 45A is initiated and the contributions payable by the
establishment is assessed on actual basis on the basis of records produced before
the department.
Employers aggrieved by any such order u/s 45A, may prefer to file an appeal
before the Appellate Authority within 60 days of the order u/s 45A.
Employers also have an option to file a suit in the Employees Insurance (EI) Court
appointed by the state government to resolve the disputes between
employers/employees with the Corporation.

Interest and Damages :-
Interest (Section 45C) on delayed payment of contributions is payable @ 12% .
Damages (Section 85B) :
Penal damages are payable in case of delayed payment of contributions as under :
5 % Delay Upto 2 months
10 % Delay 2 months – 4 motnhs
15 % Delay 4 months – 6 months
25 % Delay above 6 months

IP Number
(10 Digits)
IP Name
( Only alphabets
and space )
No of Days for
which wages
paid/payable
during the month
Total Monthly
Wages
Reason Code for
Zero workings
days(numeric only;
provide 0 for all
other reasons-
Click on the link for
reference)
Last Working
Day
( Format
DD/MM/YYYY or
DD-MM-YYYY)

Reason Code Note
Without Reason 0 Leave last working day as blank
On Leave 1 Leave last working day as blank
Left Service 2
Please provide last working day (dd/mm/yyyy). IP will not appear from next wage
period
Retired 3
period
Out of Coverage 4
Please provide last working day (dd/mm/yyyy). IP will not appear from next
contribution period. This option is valid only if Wage Period is April/October. In case
any other month then IP will continue to appear in the list
Expired 5
period
Non Implemented area 6 Please provide last working day (dd/mm/yyyy).
Compliance by
Immediate Employer 7 Leave last working day as blank
Suspension of work 8 Leave last working day as blank
Strike/Lockout 9 Leave last working day as blank
Retrenchment 10
period
No Work 11 Leave last working day as blank
Doesnt Belong To This
Employer 12 Leave last working day as blank

Few misconceptions on EPF and ESI Compliances:
i) EPF and ESI are for major/big employers ?
ii) Employees become permanent after obtaining EPF and ESI membership ?
iii) EPF and ESI withdrawals are something out of this world (difficult if not impossible) ?
iv) EPF and ESI compliances are difficult ?
v) It is tough to face inspections of these departments ?
vi) Components of salary on which EPF and ESI dues are payable !!
Any more if you can suggest……..

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