The Most Recent Amendments in Indian Labour Law Legislations – Webinar FAQs
ADP India hosted a webinar on The Most Recent Amendments in Indian Labour Law Legislations and their Effects on Your Establishment on 9 May 2018. The webinar recording can be viewed below.
There were many interesting questions that came up during and after the webinar. While Mr. Anandan answered several of them during the webinar, there were some questions that he did not have the time to answer. We have drafted these questions and answers into a quick Frequently Asked Questions (FAQ) format, for the benefit of everyone. If you have further questions, please comment below and we’ll answer as soon as we can.
FAQs: The Most Recent Amendments in Indian Labour Law Legislations and their Effects on Your Establishment
- We are unable to approve more than one KYC in the new unified portal. We have a digital signature enrolled in the portal. Currently, we are able to approve one KYC document in the portal and nothing more. The approval screen goes grey and inactive if we try to approve the second one. Request your clarification.
The issue may not be with PF portal. Kindly check with the Vendor who had given you the dongle. If you still face problems, you may have to visit the IT department of the Regional PF Office.
- What is the current process of withdrawing EPF and EPS? There are continuous changes in the EPFO and we are not aware of these amendments.
Upon separation from the PF membership of the establishment, if a member wishes to withdraw, he/she should not be employed in any other organisation. The member can apply for withdrawal after 60 days of PF remittance of his last deducted contribution.
Alternatively, a PF member who is female, for the purpose of her marriage can apply for withdrawal immediately, but should not be employed in any other organisation. Further, those who are going abroad for higher education, employment opportunities or for other purposes, can also apply for withdrawal immediately.
- Can’t all the companies shift to the online transfer of PF? We approve the transfer requests based on the document provided. But there are still some companies resorting to paper format. Request you to explain.
Online transfer is not possible in many PF members, for reasons, that (1) personal details of the PF member – DOJ, DOB, Fathers Name, Marital status, etc. are not updated (2) KYC details – PAN, AADHAR, Bank details are missing (3) AADHAR was not seeded to UAN
- What is the penalty if the person has not withdrawn his PF for more than three (3) years? Some of our ex-employees have moved abroad and not withdrawn their PF.
There is no penalty for anyone – employer or employee. The monies lying with EPFO will accrue interest until the PF member (or) Nominee withdraws.
- Under PMRPY, please elaborate as to what you mean by ‘existing beneficiary for his remaining period’.
The establishment would have already registered under PMRPY and the beneficiary’s name could have been included in the portal to avail benefits. The reimbursement of benefits to the establishment, in the name of such beneficiary would be three (3) years from their date of joining/date of registration into PMRPY. Hitherto, the benefit was 8.33% of employer contribution and effective 1st April 2018 wage month, it would be 12%. If availing of benefits was already commenced, the establishment would get 12% for the remaining period of total three (3) years.
- The question is in case of involuntary exits: If an employee serves and gets terminated in less than five (5) years, is it mandatory for the employer to pay ex-gratia?
Ex-gratia is not mandatory under the Act.
- If Gratuity is a part of CTC, is it the obligation of the employer to pay the gratuity even if the employee serves for a year?
It is only between the employee and employer if such compensation is mentioned in the CTC. Statutorily it is not obligatory under the Payment of Gratuity Act.
- As per our understanding, the employee’s service is coming to four (4) years and 214 days. So if the organisation is working five (5) day week, is gratuity payable as per interpretation of gratuity case law in Madras High Court where they told to pay gratuity for service of four (4) years and 240 days (six (6) day working organisation)?
Arrive at the eligibility for Gratuity by totaling number of days including the weekly-off (either one day or two days in a week), as it is paid day. The Act doesn’t state about one day weekly-off or two-days weekly-off.
- PMRPY incentive changed from 8.33 to 12% – this is effective from which month?
April 2018 wage month.
- Is there any recent amendment for ESI exemptions in Srikakulam and Vizag areas?
There are no recent amendments from ESIC for these locations.
- You mentioned that women employees working night shifts will receive one paid holiday. Why is this so?
It is a provision under the recent Maharashtra Shops and Establishment Act, 2017.
- One of our employees has changed his name and has a gazetted copy of it. When he tried to change basic details, EPFO is asking for the birth certificate and has rejected the request despite current employer having approved it. How to deal with this?
Apply with the physical Joint Declaration form.
- If an employee completes three (3) years in his previous organisation and then three (3) years in the current organisation, then how should we calculate the gratuity for his employment?
Eligibility for Payment of Gratuity is calculated if an employee is continuously working in one establishment. In the above case term of years cannot be considered for arriving at eligibility of the individual employee. What was discussed during the webinar is, if an employee already received Gratuity under The Payment of Gratuity Act, then it would be considered for arriving at maximum Gratuity payable by the establishment, i.e. 20 Lakhs.
- What is the percentage of the tax deduction for people who have withdrawn in less than five (5) years?
If the service less than five years in an establishment and the withdrawing amount is Rs. 50,000 or more, then the TDS would be minimum 10% and maximum 34.60.
- Please give a brief explanation of the Bonus Act. What is the eligibility and how to calculate bonus and disburse? Also, what are the minimum and maximum bonus?
Any on-roll employee who has served 30 days or more in the previous financial year is eligible for payment of Bonus in the following financial year, within 8 months after the closing of books of accounts. Those employees who are drawing a Basic (+DA if any) of Rs. 21,000 per month or less. Upon eligibility, the amount to be considered for bonus calculation is Rs. 7,000 or the Minimum Wages, whichever is higher (MW is to be considered for those employees who are engaged in Scheduled employment). With the account surplus, the establishment needs to declare statutory bonus (between 8.33% and 20%) and disburse before November 30.
- For employees leaving during the month, is the salary pro-rated based on 30 days working or the working days of that month (for ex. 22 days working month and the person has worked for 15 working days)?
Working days should always include the weekly-off, which needs to be considered as paid days. 22 days working month has weekly-offs which also needs to be considered for calculation of paying days. Whatever week-offs falls during such 15 days, those days also need to be included and considered as worked days.
- An employee wants to withdraw PF and she resigned 6 months back. Is it the employer who has to withdraw for her, or does she have to do it for herself?
If the PF member (who is currently not employed) has updated all personal details including Bank, PAN and AADHAR in the UAN member portal he/she can withdraw the PF on her own, applying through online. Otherwise, he/she has to apply through the establishment.
- Is PMRPY applicable to IT Professionals?
It is applicable for all those eligible employees whose Gross wages is Rs. 15,000 or less per month.
- In terms of the Gratuity Act, if we have to consider the entire employment cycle, how does the current employer calculate? We currently calculate based on years of service and not on the amount. Is it not right to follow the years of service of the employee in a particular establishment?
During recruitment (employee on-boarding) the details of Gratuity already availed (amount) in their previous employment needs to be considered. Considering the number of years in the previous employment is not mandatory.
- Employee joins after payroll cut-off in a month, after which we close the payroll, and remit PF for them next consecutive month. This is beyond the PF cut-off of joined period, we are levied penalty for that. Will it be treated as default?
Yes. The attendance of an employee was considered for specific days, as above which is according to the convenience of the employer. But it is a not a case for EPFO. For EPFO the monthly calendar is 1 ~ 30/31.
- Please let us know how to resolve PF & ESI registration issue with Shram Suvidha Portal?
If you register for PF & ESI through Shram Suvidha Portal it would be easy to get the registration through one single application. If you find difficulty, try separately through EPFO and ESIC portals.
- In shops and establishments, if an employee is terminated, can the employer stop their PF amount?
PF deducted and remitted to EPFO is PF member’s money. No one can stop withdrawal or transfer of such accumulation.
- Can you share the information on display boards to be done in office premises for Karnataka/Maharashtra?
Name board of an establishment should always be in Vernacular language (Marathi in case of Maharashtra) and another language of establishment’s choice. Both the names should be similar in size, font. Notice board should have displays of Abstracts (Shops & Establishment, Minimum Wages, Payment of Wages, Gratuity, Bonus, Maternity Benefit, CLRA, Employee Compensation, Standing Order) and Notices (S &E, MW, PoW, Gratuity, Stranding order, List of holidays), Declaration under Child Act, Committee details on SH Act specific to the State.
- What if a newly hired employee is already having a PF account and does not disclose it to the employer, and the new employer enrols him in PMRPY website?
Though this cannot happen because the UAN linking, considering something of such happening – All such money is to be reimbursed by the establishment if the benefit is already availed by the employer.
- If an employee goes on sabbatical leave, then will it be considered as a break of service for calculation of Gratuity?
If the sabbatical leave is mentioned in the certified Standing Order, it is treated as continuous service for the purpose of calculation of Gratuity. Otherwise, statutorily it is not.
You can access ADP India’s previous webinar recordings here.
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