SEMINAR ON - Eastern India Regional Council of The ... laws ppt.pdf · The Payment of Wages Act,...

CA Vivek Agarwal FCA, DISA (ICAI), B.Com

[email protected] +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?


http://esewa.epfoservices.in/

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.


PF - ECR Format to generate PF Challan-1384841159234.xls

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

1 Vijay 4102255441 26 Daily 150 3900 150 69 186 255

2 Ram 4102255442 25 Daily 150 3750 150 66 179 245

3 Prabhu 4102255443 24 Daily 90 2160 90 0 103 103

4 Shyam 4102255444 26 Daily 230 5980 230 105 285 390

5 Kishore 4102255445 26 Daily 225 5850 225 103 278 381

6 Ashok 4102255446 26 Daily 225 5850 225 103 278 381

7 Nirmal 4102255447 18 Monthly 4000 2769 153.83 49 132 181

8 Vimal 4102255448 16 Monthly 3000 1846 115.37 33 88 121

9 Kumar 4102255449 12 Monthly 2500 1154 96.16 0 55 55

10 Ashim 4102255450 10 Monthly 2400 923 92.3 0 44 44

11 Jayanto 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


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)

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

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….

SEMINAR ON - Eastern India Regional Council of The ... laws ppt.pdf · The Payment of Wages Act,...

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