Today, India has surfaced as one of the most popular business destinations in the world. The impact of corporate culture on the society is so substantial that even the ordinary people prefer to set up their own business.
Therefore, to regulate the corporate sector, several amendments have been made in corporate laws of India from time to time. No matter whether the company is public or private; it has to adhere to the Indian corporate laws. In India, a company has to make a wide variety of compliances periodically. Labour Law Compliance is considered of great importance to any organization having a business place in India.
What is labour law?
Labour Law is the body of law primarily focused on ensuring the protection of the rights of workers in India. It regulates employers, employees and trade unions through various compliances to secure the rights of the employees and labourat large.
Types of funds that safeguard the interest Labour in India
The Labour Law insists on the creation of funds such as Labour Welfare Fund (LWF), EPF, ESI, etc. to ensure the welfare of labourin the country.
Importance of labour compliance
The establishments in India should carry-out statutory compliance under various Labour Laws. The scope of labour compliance is not limited to filing returns and maintaining statutory deposits and records by the employer. In case of any prosecution, these records are to be produced as evidence under various statues. Also, if the company or employer fails to make the compliance, there are severe penalties prescribed by the law.
Indian Labour Law consists of various acts covering every possible aspect for the protection of labour rights. The applicability of law depends on the type of organization. Also, there are multiple laws which apply to employer and employee respectively.
List of Labour Laws in India:
1. Minimum Wages Act, 1948:
It provides for the fixing of minimum wages to employees in specific employment.
2. Employees Provident Funds and Miscellaneous Provisions Act, 1952:
It provides for the creation of provident funds, pension funds, and deposit-linked insurance funds for employees.
3. Employees’ State Insurance Act, 1948:
This act provides for specific benefits to employees in case of sickness, maternity, and injury during employment.
4. Factories Act, 1948:
It lays down provisions for the welfare, health, safety, and working conditions of labouremployed in factories.
5. Contract Labour (Regulation & Abolition) Act, 1970:
It provides for protection of labour rights of the worker employed on a contractual basis.
6. Payment of Bonus Act, 1965:
It regulates the payment of bonus to the employee either on the basis of profits or by production or productivity.
7. The Plantation Labour Act, 1951:
It provides for the welfare of labourand to govern the conditions of labour working in plantations.
Similarly, there is a long list of Labour Laws required to be adhered to by various organizations.
Some of the Labour law compliance required by an establishment:
1. Registration under the Employee Provident Fund (EPF) act must be done by every establishment having 20 or more employees.
2. Establishments are required to comply under the Employees’ State Insurance Act.
3. A monthly contribution toward funds related to EPF and ESI is required by both employer and employee.
4. Registers are to be maintained, and a return is required to be filed periodically.
5. In case, the organization is a manufacturing unit, then it must carry-out all compliances provided under Factories Act, 1948.
Risks of Non-Compliance
In the event of non-compliance by a company attracts penal provisions which include imprisonment, fine or both depending on the type of default. Imprisonment may extend to 3 years, or more and fine may be imposed on a daily basis, or a lump sum amount can be charged.
Labour compliance services
Compliances to the law of the land are mandatory, and companies established in India cannot afford to ignore it. Still, hiring a professional for identifying a relevant labour law and its applicability to the company is quite expensive. Thus to cater this issue adequately, Labour compliance services are available in the market which offers expert service at a very reasonable rate. Companies can opt to avail the Labour Compliance Services and reduce the business cost significantly.