THE MINIMUM WAGES ACT, 1948

AN ACT TO PREVENT SWEATED LABOUR AND EXPLOITATION OF LABOUR The Act extends to the whole of India

Requires the Central and State Govt. to fix minimum rates of wages in certain scheduled employment. Minimum wages fixed REVISED from time to time

Responsibility of the Employer

to follow the directions and fix wages of the workers at the rate not less than the one fixed to maintain Register of Wages in form XI showing rate of wages payable, actual amount paid, attendance & overtime, deductions for EPF, ESI and other, net amount paid, date of payment and signature of respective employee. Wages slip in form XIII showing the above details to be given to every employee.

PAYMENT OF WAGES ACT, 1936

An Act to regulate the payment of wages to certain classes of persons Extends to the whole of India Responsibility of payment wages rests with the employer Employer to fix Wage Period No wage period shall exceed one month.

Time of Payment of wages

7th day of wage month where less than 1000 are working 10th day where more than 1000 are working No payment in KIND

Permissible deduction from Wages

fines for absence from duty for damage caused to the property of the employer for the amenities provided, like house accommodation for recovery of advance or adjusting over payment of wages towards EPF, ESI, Labour Welfare Fund and similar deductions permitted under any Act or the Standing Orders of the establishment for Life Insurance/ general insurance policies and Housing loan.

The Kerala Payment of Subsistence Allowance Act, 1972

Act to provide for the payment of subsistence allowance to the employees during the period of suspension Extends to the whole of Kerala

Suspension
Any interim decision of an employer debarring an employee temporarily from attending his office

Payment of Subsistence Allowance

50% of wages for the first ninety days of suspension 75% of wages for the period beyond ninety days Full wages for the period beyond one hundred and eighty days

Not eligible for Subsistence Allowance

An employee placed under suspension not entitled for subsistence allowance if he accepts employment during the period of suspension

THE PAYMENT OF BONUS ACT, 1965

An Act to provide for the payment of Bonus to persons in certain establishments on the basis of profits, production or productivity. Extends to the whole of India. Applies to every establishment wherein 20 or more are employed The Appropriate Govt. shall apply the Act to any other establishment, including a factory to which the Factories Act, 1948 applies, wherein less than 20 workers are employed provided the number of persons employed is not less than 10.

Eligibility to Bonus
employee whose salary/ wages does not exceed Rs 10000 per month who has worked in the establishment for not less than 30 days Not disqualified to claim bonus due to fraud, theft or any other misconduct Bonus of very person drawing salary between Rs 3500/- and Rs 10000/- per month shall be calculated as if his salary were Rs 3500 pm

For calculating the number of working days

the days for which the worker has been laid off the days he has been on leave with pay the days he has been absent due to temporary disablement caused by an employment injury the days a woman employee has been on maternity leave
shall be taken in to account.

Rate of Bonus
Minimum :8.33% of salary/wages Maximum 20% of salary/wages Computation of bonus as per Schedule I to IV of the Act. Adjust any interim bonus paid while making payment of the final bonus.

Disputes on Bonus
The Bonus Act does not provide for any machinery to resolve disputes relating to bonus. For this, the Industrial Dispute Act shall be referred to.

THE PAYMENT OF GRATUITY ACT, 1972

The Kerala Industrial Employees Payment of Gratuity Act, 1970, followed by the West Bengal Employees Payment of Compulsory Gratuity Act, 1971 and the intention of the other States to have similar Acts in their respective states necessitated the Central Act so as to avoid different treatment to employees of establishments having branches in more than one states who are subject to transfer from one state to another.

The Payment of Gratuity Act, 1972 extends to the whole of India.

Applies to every factory, mine, plantation and other establishment wherein 10 or more workers are employed.

Gratuity is in the nature of a retirement benefit payable to an employee for a long and meritorious service.

It is not paid to an employee gratuitously or merely as a matter of boon. It is paid for the service rendered by him to the employer (Delhi Cloth and General Mills Co; Ltd Vs The Workmen) Then why it should necessarily be denied to him when an employee is dismissed for misconduct at a latter stage of service ???

Gratuity is payable to an employee on termination of his employment after he has rendered continuous service for not less than five years

on his superannuation on his resignation on his death or disablement due to employment injury or disease

News paper employees

The Working Journalists and Other Newspaper Employees (Conditions of service) and Miscellaneous Provisions Act, 1955, provides for payment of gratuity. As such, three years of continuous service is required for eligibility for Gratuity.

The payment of gratuity shall be forfeited

to the extent of the damage or loss caused by the employee to the property of the employer where the service of the employee is terminated due to misconduct

Rate of gratuity
15 days wages for every completed year of service Rates applicable to Working Journalists depends upon the service of the employee as provided in the Working Journalists and Other Newspaper Employees (Conditions of service) and Miscellaneous Provisions Act, 1955

The average pay of the monthly rated employee shall be taken by dividing the monthly salary/ wages by 26 and not by 30

Piece rate workers and Seasonal establishments

For piece rated workers, average of the three months wages immediately preceding the day of leaving shall be taken as average rate of wage An employee in a seasonal establishment shall be paid @ seven days wages for each season

Salary ceiling
The Amendment Act of 1994 removed the salary ceiling of an employee, but the maximum gratuity payable shall be Rs 3.5 lakh.

In order to be eligible for gratuity, employee should have at least five continuous years of service with the employer
An employee is in service in a calendar year provided he has worked for
190 days in case employee is employed below the ground and 240 days in any other case.

Continuous service (contd.)

The days he/she has been laid off under an agreement or under the ID Act or as permitted by the Standing Orders on leave with pay absent due to temporary disablement due to employment injury on maternity leave shall be taken as worked for the calculation of 190/240 days.

For seasonal employment 75% attendance during a season shall constitute service in a year
An employee who has worked for 4 years 11 months and 10 days not eligible for gratuity as decided in P. Raghavalu and Sons Vs Additional Labour Court, Andhra Pradesh, as the qualifying phrases part thereof in excess of six months shall be taken only for calculation of gratuity and not for determining the eligibility of gratuity.

THE INTERSTATE MIGRANT WORKMEN (REGULATION OF EMPLOYMENT AND CONDITIONS OF SERVICE) ACT 1979

Act to regulate the employment of interstate migrant workers and to provide for their conditions of service.

Extends to the whole of India.

Applies to every establishment wherein five or more interstate migrant workmen (whether or not in addition to other workmen) are employed and every contractor who employs (whether or not in addition to other workmen) 5 or more interstate migrant worker.

Interstate migrant worker

An interstate migrant worker means any person who is recruited by or through a contractor in the state under an agreement or arrangement for employment in an establishment in another state, whether with or without the knowledge of the principal employer.

Provides for
Registration of establishments employing interstate migrant workmen, licensing of contractors, appointment of licensing officers, prohibition of employment of migrant workmen without registration and duties and obligations of contractors provided under the Act.

Employer to ensure
Regular payment, equal pay for equal work irrespective of sex, suitable conditions of work, medical facilities, protective clothing etc shall be ensured to such workmen. The contractor to maintain register of migrant employees, send report of accidents, half yearly returns (From 23) and annual returns (Form 24) Employer contravening the provisions liable for punishment of imprisonment or fine or both

THE EQUAL REMUNERATION ACT, 1976

Act provides for the payment of equal remuneration to men and women Extends to the whole of India Act makes it obligatory on the part of employer to pay equal remuneration to men and women workers for same work or work of a similar nature. In order to make the wages equal, prevailing wages shall not be reduced but the higher rate shall be maintained.

No discrimination
No discrimination while making recruitment for the same work or work of a similar nature, except where the employment of women in such work is prohibited or restricted by or under any law for the time being in force. No discrimination in any condition of service subsequent to recruitment such as promotions, training or transfer.

THE APPRENTICES ACT, 1961

The Act extends to the whole of India. Applies to those apprentices who are undergoing apprenticeship training in designated trades. From time to time, the Central Govt. has specified the designated trades.

Contract of apprenticeship
A contract of apprenticeship training is entered in to between the employer and the apprentice or, if he is a minor, guardian of the apprentice. The contract of apprenticeship training is to be sent to the Apprenticeship Adviser of the respective area.

Termination of training
on the expiry of the period of apprenticeship training specified in the contract. Premature termination by employer the employer shall pay to the apprentice such compensation as may be prescribed Premature termination by the apprentice apprentice or his guardian shall refund to the employer as cost of training such amount as may be determined by the Apprenticeship Adviser

NUMBER OF APPRENTICES
Depends on the ratio of trade apprentices to workers other than unskilled workers and the facilities available and that may be made available by the employer for training the apprentices.

Duties of the employer

Make suitable arrangements for imparting practical training Provide for basic training. Where an employer employs 500 or more workers, the basic training shall be imparted in separate part of the workshop building or in a separate building set up by the employer. * the employer may get easy loan from the Govt. for construction of building for conducting training classes

ITIs
if the number of apprentices to be trained is less than twelve, then the employer may depute such apprentices to any Basic Training Center or Industrial Training Institute run by the Government for basic training in any designated trade. Where an employer deputes any apprentice as above, such employer shall pay to the Government the expenses incurred by the Government on such training, at such rate as may be specified by the Central Government.

RI Centre
Apprentice to be given Related Instruction course. Time spent by a trade apprentice in attending classes on RIC shall be treated as part of his paid period of work.

EMPLOYERS to ensure
Placement of Training Officer with suitable qualification Payment of stipend at a rate not less than the prescribed minimum rate Not to pay on the basis of piece work Not to require to take part in any output bonus or other incentive scheme

Employer to ensure (contd.)

HEALTH, SAFETY AND WELFARE OF APPRENTICES Not to require or allow overtime except with the approval of the Apprenticeship Adviser. In case of employment injury pay compensation in accordance with the provisions of the Workmen's Compensation Act, 1923

Disputes
Any disagreement or dispute between an employer and an apprentice arising out of the contract of apprenticeship shall be referred to the Apprenticeship Adviser for decision.

Obligation for employment

It shall not be obligatory on the part of the employer to offer any employment to any apprentice who has completed the period of his apprenticeship training in his establishment, nor shall it be obligatory on the part of the apprentice to accept an employment under the employer.

THE WORKMENS COMPENSATION ACT, 1923

The Act provides for payment of compensation to the worker injured during the course of employment or contracted by any occupational disease peculiar to that employment Act extends to the whole of India.

The amount of compensation

for accidents resulting in death, an amount equal to fifty per cent of the monthly wages of the deceased workman multiplied by the relevant factor; or an amount of eighty thousand rupees, whichever is more * for permanent total disablement, an amount equal to sixty per cent of the monthly wages of the injured workman multiplied by the relevant factor, or an amount of ninety thousand rupees, whichever is more.

The maximum compensation as per W.C. Amendment Act 2000

Fatal Injury - Rs.4,57,080 Permanent Total Disablement - Rs.5,48,496 Permanent Partial Disablement - According to incapacity caused Temporary Disablement - Rs. 2000 per month upto a period of 5 years

ESI Corporation and Workmen compensation

The liability of payment of compensation shifted from the employer to the Employees State Insurance Corporation

EMPLOYEES PROVIDENT FUND AND MISC. PROVISIONS ACT, 1952

An Act to provide for the institution of provident funds, pension funds and deposit linked insurance fund for the employees in the factories and other establishments Extends to the whole of India except the State of Jammu and Kashmir

Applicability
Applies to all factories and establishments in which 20 or more are employed Continuity of application Exemption Where employees get benefits in the nature of provident fund or old age pension fund from the establishment which are not less favourable than the benefits under the Act.

Schemes under the Act

Three beneficial schemes 1.Employees Provident Fund Scheme 2.Employees Pension Scheme 1995 1952

3.Employees Deposit Linked Insurance 1976

membership
An employee at the time of joining the employment and getting wages up to Rs.6500/- is required to become a member. an employee is eligible for membership of fund from the very first date of joining a covered establishment.

Contribution to EPF
Employees share : 12% of the Basic + DA Employers contribution : 12% to be deposited as : 8.33% to be deposited in Pension Fund A/C No 10 and the balance, ie, 3.67% to be deposited in Provident Fund A/C No 01 along with Employees share of 12%

Contribution (contd.)
Administration charges @ 1.1% of the total wages/salary disbursed by deposit to A/C No 02, Employees Deposit Linked Insurance @ 0.5% of the total wages/salary by deposit to A/C No. 21 and Administration of EDLI @ 0.01% of the wages/ salary by deposit to A/C. No. 22.

Duties of employer
Employer to furnish information about: (a) Ownership and names of responsible persons of the establishment. (b) Declaration and nomination. (c) Joining and leaving of service by the members in form 5 and form 10 respectively (d) Form 12A with monthly challans of deposit. (e) Form 9 for details of employees. (f) Form 3A/6A at the end of the financial year. (g) Any other information as may be required under Para 76 of the scheme

Benefits to employees
Provident Fund Benefits Pension Benefits Death Benefits

Provident Fund Benefits

Employer also contributes to Members PF @ 3.67% (1.67% in case of sick industry - eg: beedi) EPFO guarantees the Employer contribution and Govt. gives a decent interest to PF accumulations Member can withdraw from this accumulations to cater financial exigencies in life - No need to refund unless misused

On resignation, the member can settle the account. i.e., the member gets his PF contribution, Employer Contribution and Interest

Pension Benefits
Pension to Member Pension to Family (on death of member) Scheme Certificate
This Certificate shows the service & family details of a member This is issued if the member has not attained the age of 58 while leaving an establishment and he applies for this certificate Member can surrender this certificate while joining another establishment and the service stated in the certificate is added with the service he is gaining from the new establishment. After attaining the age of 50 or above, the member can apply for Pension by surrendering this scheme certificate (if total service is at least 10 years) This is a better choice than Withdrawal Benefit, that if a member dies holding a valid scheme certificate, his family will get pension (Death when NOT in service)

Pension benefit (contd.)

Withdrawal Benefit
if not eligible for pension, member may withdraw the amount accumulated in his pension account the calculation of this amount is based only on (i) Last average salary and (ii) Service (Not based on actual amount available in Pension Fund Account)

No amount is taken from Member to give Pension to the Member. Employer and Govt. contribute to Pension fund @8.33% and @1.16% respectively EPFO guarantees pension to members, even if the Employer has not contributed to Pension Fund.

Pension calculation is similar to that of Govt. Employee

Death Benefits
Provident Fund Amount to Family (or to Nominee) Pension to Family (or to Parent / Nominee)

Capital Return of Pension

Insurance (EDLI) amount to Family (or to Nominee)
No amount is taken from Member for this facility. Employer
contributes for this.

Nominee is basically determined as per the information submitted by the member at this office through FORM-2

National Wage Policy for India.

As of now, India does not have a formal national wage policy, though the issue has been discussed several times. The government has direct and indirect control over wage levels, which has been exercised through different institutions. (Top salaries of PSUs and Private Sector are strictly regulated, though the degree has been diminishing, particularly in Private Sector This has led to phenomenal differentials between Private and Public).