CA Vivek Agarwal FCA, DISA (ICAI), B.Com CA Vivek Agarwal FCA, DISA (ICAI), B.Com SEMINAR ON 16 TH 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, The Child Labour (Prohibition and Regulation) Act, The Contract Labour (Regulation and Abolition) Act, The Equal Remuneration Act, The Industrial Disputes Act, The Industrial Employment (Standing Orders) Act, The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 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, 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, 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 Rs.25/-per month and Govt. will 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 /- (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 /- 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 per month as family pension. The beneficiary will also get the total deposit along with 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 , 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 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 Employees' Provident Fund Scheme, 1952

Rate of Contribution Employee: 12% on Basic + DA + CVFA Employer: 13.36% on Basic + DA + CVFA [(PF-3.67% %) + (EDLI-0.5% %) + (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 Employees' Provident Fund Scheme, 1952

PF Deductions for employees:  PF deduction is mandatory for all the employees whose Basic + DA is less than or equal to  Employees with Basic + DA more than 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 (12% of 15000). Employees' Provident Fund Scheme, 1952

 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: Employees' Provident Fund Scheme, 1952

Tax benefit:  Sec 80 (C): Tax exemption on the investment up to 1.50 lac.  Sec (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 ) Tax Benefit and returns: Employees' Provident Fund Scheme, 1952

S.NoForm no.Description 1Form 2Nomination form at the time of joining an organization. 2Form 19PF withdrawal after resignation. 3 Form 10 CPension 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. 5Form 20Claim PF amount for deceased member. 6Form 13For transfer of PF a/c. (NOW ONLINE) 7Form 31For withdrawing advance from PF account. Forms to be filled by the employees: Employees' Provident Fund Scheme, 1952

Forms to be filled by the employees: S.N o Form No.Due DateFrequencyDescription 1Form 5 25 th of every month Within 15 days Employee joining an organization. (Now only through Online ECR) 2Form th of every month Monthly Resigned Employee details (Now only through Online ECR) 3Form 12 A 25 th 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 ) 4Form 3A 30 th April YearlyEmployee contribution details (Now only through Online ECR) 5Form 6A 30 th April YearlyEmployees consolidated contribution list. (Now only through Online ECR) 6Form 5A Inception OnceWhen an organization registers at EPF, India. Online through ECR portal Employees' Provident Fund Scheme, 1952

Login to 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? Employees' Provident Fund Scheme, 1952

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 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. Employees' Provident Fund Scheme, 1952

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. Employees' Provident Fund Scheme, 1952

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. Employees' Provident Fund Scheme, 1952

Levy of interest and damages Interest u/s 7Q 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 ) Educational institutions and private nursing homes are coverable under the ACT w.e.f (In West Bengal). Employees of the Factories and Establishments in receipt of wages not exceeding Rs /- 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) Employees' State Insurance Act’ 1948

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. Employees' State Insurance Act’ 1948

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. Employees' State Insurance Act’ 1948

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 % 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 ) but are entitled to all social security benefits under the Scheme. Employees' State Insurance Act’ 1948

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 Daily Ram Daily Prabhu Daily Shyam Daily Kishore Daily Ashok Daily Nirmal Monthly Vimal Monthly Kumar Monthly Ashim Monthly Jayanto Monthly Employees' State Insurance Act’ 1948

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 1 st April to 30 th September and 1 st October to 31 st 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 1 st April to 30 th September 1 st January to 30 th June of the following year 1 st October to 31 st March 1 st July to 31 st Dec. Employees' State Insurance Act’ 1948

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. Employees' State Insurance Act’ 1948

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. Employees' State Insurance Act’ 1948

Interest and Damages :- Interest (Section 45C) on delayed payment of contributions is 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 Employees' State Insurance Act’ 1948

EMPLOYEE REGISTRATION

FILING OF MONTHLY SALARY DATA

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)

ReasonCodeNote Without Reason0Leave last working day as blank On Leave1Leave last working day as blank Left Service2 Please provide last working day (dd/mm/yyyy). IP will not appear from next wage period Retired3 Please provide last working day (dd/mm/yyyy). IP will not appear from next wage period Out of Coverage4 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 Expired5 Please provide last working day (dd/mm/yyyy). IP will not appear from next wage period Non Implemented area6Please provide last working day (dd/mm/yyyy). Compliance by Immediate Employer7Leave last working day as blank Suspension of work8Leave last working day as blank Strike/Lockout9Leave last working day as blank Retrenchment10 Please provide last working day (dd/mm/yyyy). IP will not appear from next wage period No Work11Leave last working day as blank Doesnt Belong To This Employer12Leave last working day as blank

GENERATION OF CHALLAN

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……..

Time for….