The Employees' Provident Funds presentation

To provide maximum retirement benefits and an efficient service to our members through prudent and innovative management of the fund.

1. Global Vision Backed By
Local Knowledge
rsm.global/india Strictly Confidential and Furnished on Request
Presentation on Recent Labour Law Updates &
PF/ESIC Amnesty Schemes
-By Nirav Jogani
THE POWER OF BEING UNDERSTOOD
7
th
January 2017

2. Contents
Overview of Important LabourLaws
ESIC & PF Amnesty Scheme
PF Incentive Scheme(PMRPY)
THE POWER OF BEING UNDERSTOOD
2
Wages Definition Under Various Laws
Recent Updates in Various LabourLaws
FAQ
2

3. OVERVIEW OF IMPORTANT LABOURLAWS
EMPLOYEES STATE INSURANCE
(ESIC)

4. Brief Intro of ESIC
•Applicability:TheActappliestoeverycommercialestablishmentemploying 10or
moreemployees.TheActcoversthoseemployeeswhosewagesdonotexceed
21,000p.m.(w.e.f.01/01/2017)or25000p.m,incaseofdisabledemployees.The
limittill31December2016wasRs.15,000.
•Exemption:Seasonalestablishments,Governmentfactoriesandestablishments
withsimilarsuperiorbenefitsareexemptedfromESIC.
THE POWER OF BEING UNDERSTOOD
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•Contribution:Employertopaycontribution4.75%andEmployeetopay1.75%of
theearnedwagesasESICcontribution.
•MonthlyChallan:MonthlyChallantobesubmittedonorbefore21
st
ofsubsequent
month.

5. Interest & Damages on delayed payments of contribution-ESIC
SimpleInterest Rate @ 12% p.a. is charged separately
+ Damages as under:-
ABelow 2 months @ 5%p.a.
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BAbove 2 months to up to 4 month @10%p.a.
CAbove 4 months to up to 6 month @15% p.a.
DAbove6 months ( Subject to Max 100%) @25% p.a.

6. Benefits of ESIC
FreeMedicalTreatmentisofferedtocoveredemployeesaswellas
his/herfamilymembersu/s2(11)oftheAct.
MaternityBenefitfor12weeks.
Dependent’sBenefit.
About70%ofemployeesnormalwagewillbepayableduringsickness.
RegularpaymentoflostwagesinthecaseofInjuryduring/incourseofRegularpaymentoflostwagesinthecaseofInjuryduring/incourseof
employmentresultingintemporary/permanentdisablement.
RegularpaymenttodependentsifDeathduringthecourseof
employment
OnetimepaymenttohelpmeetFuneralExpenses.
Insuredpersoncanavailcashlesstreatmentinthehospitalsreferredby
ESIHospital.
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7. FAQ -ESIC
Q.1IfthewagesofanemployeeexceedsRs.15,000inamonth,canhebe
treatedasnotcoveredanddeductionofcontributionisstopped?
Ifthewagesofanemployee(excludingremunerationforovertimework)
exceedsthewagelimitprescribedbytheCentralGovernmentafterstartof
contributionperiod,hecontinuestobeanemployeetilltheendofthat
contributionperiod(6months)andhencecontributionistobedeductedand
paidonthetotalwagesearnedbyhim.paidonthetotalwagesearnedbyhim.
Q.2Whatistheeffectofincreaseinwagesfromaretrospectivedate ?
Incasethewagesofanemployeeisincreasedfromaretrospectivedate
resultingincrossingthewagelimitprescribed,itseffectoncoverageofthat
employeeisonlyafterexpiryoftheContributionperiodduringthecurrencyof
whichsuchincreaseisannouncedordeclared.Thecontributiononenhanced
wagesisalsopayablefromthemonthinwhichsuchincreaseisannounced.
Thereisnoneedtopaythecontributiononthearrearsfortheperiodpriorto
themonthofdeclaration/announcement/agreement.
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8. FAQ -ESIC
Q.3Whycontributionshouldbepaidonthetotalwagesbeyondthewage
ceilinglimitwhenanemployeecrossesthewagelimitprescribedbythe
CentralGovernment?
Anemployeewhocrossestheprescribedceilinglimitinanymonthatanytime
aftercommencementofthecontributionperiod,he/shewouldcontinuetobean
employeetilltheendofthatcontributionperiod.
Thoughthereisaceilinglimitofwagesforcoverageofanemployee,thereisnoThoughthereisaceilinglimitofwagesforcoverageofanemployee,thereisno
ceilinglimitinthedefinitionofwagesforpaymentofcontribution.Hence,
contributionispayableonthetotalwageswithoutanyceilinglimit
Fileinlink\ESICFAQ.pdf
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9. OVERVIEW OF IMPORTANT LABOURLAWS
PROVIDENT FUND

10. Brief Intro of EPF
Applicability:
•EPFAappliestoeveryestablishmentswhichisafactoryengagedinanyindustry
specifiedinScheduleIandinwhich20ormorepersonsareemployed,and
•toanyotherestablishmentemploying20ormorepersonsorclassofsuch
establishmentwhichtheCentralGovernmentmaybynotificationintheofficial
Gazettedecide.
THE POWER OF BEING UNDERSTOOD
10
Gazettedecide.
Exemption:
•AnyCo-op.Soc.registeredundertheCo-op.SocietiesAct,employinglessthan50
employeesandworkingwithouttheaidofpower.
•CentralandStateGovts.ortheirundertakingshavingtheirownschemes.

11. Brief Intro of EPF
•Employeedrawingsalary(Basic+DA)uptoRs.15,000/-permonthtobecovered
undertheprovidentfundscheme.
•Coveredemployeedrawingsalarymorethan15,000/-p.m.canbecovered
voluntarilyundertheschemebutpaymentsarerestrictedonlyon15,000/-p.m.
salary.
•Onceemployeeiscovered,he/shecannotoptforexitfromschemeeventhough
monthlywagesexceedthresholdlimit.
THE POWER OF BEING UNDERSTOOD
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monthlywagesexceedthresholdlimit.
•Govttobearemployer’sshareincaseofanyPersonwhoisclassifiedasdisabled
employeeundertheactandisdrawingmonthlywagesupto25000/-,forfirst3
years
•Contribution-12%istobecontributedbyboththeemployeeandtheemployerplus
administrationchargeof0.85%,0.50%asinsurancepremium.Minimumchargeis
700/-(Rs.100/-forinactivecompany).
•Pension/Superannuationfundscheme-apartoftheabovecontributiontothe
providentfund(8.33%)isdivertedtothisscheme.

12. Brief Intro of EPF
•TheEmployeeDepositLinkedInsuranceFundSchemeisforprovidingLife
Insurancebenefits.TheemployercontributesforEDLIis0.5%onwages(Basic+
D.A.)salaryasmentionedinearlierslide.
•CalculationforEDLIbenefits(inthecaseofdeathofemployeeduringemployment
services)is20timesthelastdrawnsalary+20%bonus.Foreg.Iflastdrawnsalary
is15,000,thanbenefitwillbe15000*20+20%=3,60,000/-&PFdepartmentis
THE POWER OF BEING UNDERSTOOD
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is15,000,thanbenefitwillbe15000*20+20%=3,60,000/-&PFdepartmentis
thinkingtoincreaseitto6,00,000/-butyetnotfinalized.
•Undersection12oftheEPFA,EmployercannotreducewageseligibleforPF
contributionaswellasEmployercannotdeductEmployerContributionfrom
memberswagesorrecoverotherwise.

13. Interest & Damages on delayed payments of contribution-EPF
SimpleInterest Rate @ 12% p.a. charged separately
+ Damages -
AUpto 2 months @5%p.a.
BAbove 2 months to up to 4 month @10%p.a.
CAbove 4 months to up to 6 month @15% p.a.
THE POWER OF BEING UNDERSTOOD
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•EmployerLiabletopay12%p.a.simpleInterestorhigherrateonamountdue
fromduedatetillpayment&Damagesasabove(5%-25%p.a.)fordefaultin
payingcontributionasperspecifiedtimeline.
•Simple Interest Rate @ 12% p.a. charged separately
DAbove6 months @25% p.a.

14. FAQ -EPF
Q.1IsitbeneficialforemployeeswhodrawsalaryaboveRs15001/-tobecome
memberofProvidentFund?
Yesbecauseprovidentfundcontributionbytheemployer&employeeisnota
taxableincomeforIncomeTaxpurpose.
Q.2WhatifanemployeewhilejoiningestablishmenthasabasicsalaryofRs
11200andaftersomeperiodoftimehisbasicsalaryincreasesaboveRs.11200andaftersomeperiodoftimehisbasicsalaryincreasesaboveRs.
15001/-,doeshehaveanoptiontoterminatehismembershipformthe
Providentfundact?
EmployeewhowhilejoiningtheorganisationhasabasicsalaryaboveRs
15001/-hasanoptiontoeitherbecomeoravoidbecomingmemberofProvident
fundbutemployeeswhosebasicsalarywhilejoiningtheorganisationislessthen
Rs15001/-butaftersomeperiodoftimetheirbasicincreasesaboveRs15001/-
hastocompulsorilycontinuetobememberofProvidentFund.
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15. FAQ -EPF
Q.3 What is the contribution percentage to the Provident fund and Pension
Scheme?
Employerscontributionof12%ofbasicsalaryistotallydepositedinprovident
fundaccountWhereasoutofEmployeescontributionof12%,3.67%is
contributedtoProvidentfundand8.33%isdepositedinPensionscheme.
Q.4Whenisanemployeeeligibletoenjoypensionscheme?
ForanemployeetobecomeeligibleforPensionfund,hehastocomplete
membershipoftheFundfor10Years.
Q.5Whatdoesitmeanbycontinuousserviceoftenyears?
Continuousserviceof10yearsinEmployeePensionFund,meansifan
employeewhohasworkedwithXcompanyforsay3years,thenheresigned
fromthatorganisationandjoinedYcompany,whereinheworkedfor2years,then
resignedfromtheretojoinestablishmentfor5yearsbutduringthese10yearsof
servicehehasnotwithdrawnhisfundbuthastransferredhisEmployeepension
fund,thenwesaycontinuousserviceoftenyears.
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16. FAQ -EPF
Q.6WhencananemployeeavailthebenefitofEmployeepensionfundscheme
whichhehascontributedduringthe10yearsofcontinuesservice/
Anemployeecanavailthebenefitaftercompletionof58yearsofservice.
Q.7Incaseafterregisteringtheestablishmentatanypointintime,thenumber
ofemployeesworkinginitbecomeslessthan20thenwilltheActapply?
AnyestablishmentwhichhasbeencoveredundertheActonceshallcontinuetoAnyestablishmentwhichhasbeencoveredundertheActonceshallcontinueto
begovernedbytheActevenifthenumberofpersonsemployedthereinatany
timefallsbelow20.
Q.8IstheActapplicabletoafactorywhichiscloseddownbutisemployinga
fewemployeestolookaftertheassetsoftheestablishment?
No,Wheretheestablishmentiscloseddownandonlyfoursecuritymenare
employedforkeepingawatchovertheassetsandpropertiesofthe
establishments,theActwouldnotbeapplicable.
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17. FAQ -EPF
Q. 9 Is a trainee an employee under the Act ?
Yes,atraineewouldbeconsideredasanemployeeaspertheActbutincase
thetraineeisanapprenticeundertheApprentice’sActthenhe/shewillnotbe
consideredasanemployeeunderthisAct.
Q.10WhatincasethereareworkersinvolvedasContractlabour?
ItistheresponsibilityoftheContractortodeductthePFandsubmitastatement
tothePrincipalEmployerintheprescribedformatby7thofeverymonth.ThetothePrincipalEmployerintheprescribedformatby7thofeverymonth.The
CompanybecomesthePrincipalEmployerwouldberesponsibleforthePF
deductionoftheworkersemployedoncontractbasis.
Q.11Arethepersonsemployedbyorthroughacontractorcoveredunderthe
Scheme?
Personsemployedbyorthroughacontractorareincludedinthedefinitionof
“employee”undertheEmployee’sProvidentFindsAct,1952,andassuch,they
arecoveredundertheScheme.
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18. FAQ -EPF
Q. 12 In case the Contractor fails to deduct and submit the PF amount from the
contract workers then what is to be done ?
TheCompanybeingthePrincipalemployerisresponsibleforthePFtobe
deductedfromtheContractworkersaswell.IncasetheContractorsfailsto
deductandsubmitthePFduesthentheCompanyhastopaytheamountand
canlateronrecovertheamountfromtheContractor.
Q. 13 What happens in case there is a salary revision and a raise in the basic
salary of the employee and arrears need to be paid, Do we need to deduct
PF from the arrears as well ?
ArrearsareconsideredtobeemolumentsearnedbytheemployeeandPFisto
bedeductedfromsucharrears.
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19. OVERVIEW OF IMPORTANT LABOURLAWS
MINIMUM WAGES &
PAYMENT OF WAGES

20. The Minimum Wage Act, 1948
•Applicability:MinimumWagearetheMinimumratesofwagesfixedbythe
AppropriateGovt.fordifferentclassesofworkersemployedinanemployment
specifiedinPartI&partIIoftheschedule.Thewagespaidbyanemployercannot
belowerthantheminimumwagessonotified.
•TheMinimumWagesaretobepaidasunder:
1 Inan employment which employs less than Beforeexpiry of 7
th
Day.
THE POWER OF BEING UNDERSTOOD
20
1 Inan employment which employs less than
1000 persons
Beforeexpiry of 7
th
Day.
2 In any other case Before the expiry of tenth day after the last day
of the wageperiod.
3 On caseof Termination of Employment Before the Expiry of the Second day after his
termination

21. The Minimum Wage Act, 1948
ClassificationofSkillCategory:
•Skilled:Employeeiscapableofworkingindependentlyandefficientlyandturning
outaccurateworking.Hemustbecapableofreadingandworkingonsimple
drawingcircuitsandprocess,ifnecessary.
•SemiSkilled:Employeeishavingsufficientknowledgeoftheparticulartradeor
THE POWER OF BEING UNDERSTOOD
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•SemiSkilled:Employeeishavingsufficientknowledgeoftheparticulartradeor
abovetodorespectiveworkandsimplejobwiththehelpofsimpletoolsand
machines.
•Unskilled:Employeedoesnotpossessspecialtraining/skillsandwhosework
involvestheperformanceofsimpledutieswhichrequiretheexerciseoflittleorno
independentjudgmentorpreviousexperiencealthoughafamiliaritywiththe
occupationalenvironmentisnecessary.

22. The Minimum Wage Act, 1948
Currentminimumwagesapplicable(Gujarat)from01-10-2016to31-03-2017:-
•Zone-I
Name of the EstablishmentBasic PayS.A. (Special
Allowance)
Per Day Total Amt/
Per month with
26 days
Gujarat
THE POWER OF BEING UNDERSTOOD
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Gujarat
Skilled 293 20.80 313.80 8158.80
Semi-skilled 284 20.80 304.80 7924.80
Un-skilled 276 20.80 296.80 7716.80

23. FAQ –Minimum Wage Act
Q. 1 What is the minimum wages for part time employee/worker?
An employee employed on part-time basis shall be paid atleast50% of the
minimum rate of wages and special allowance, if he works up to 4 hours and if
he works more than 4 hours, he shall be paid full minimum rate of wages plus
special allowance.
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24. The Payment Of Wages Act, 1936
•Applicabletofactory/shops&establishmentsandallindustrialestablishment.
•Exemption:DoesnotapplytoemployeeswhosewageexceedsRs.10,000.
•DeductionofWages:
•Totalamountofdeductionshouldnotexceed50%ofthewagesofanyemployee.•Totalamountofdeductionshouldnotexceed50%ofthewagesofanyemployee.
•Restrictiononreductionofwagestoalowerpostortimescale.
24

25. The Payment Of Wages Act,1936
Provisions Sections Requirements
Time of wages Sec. 5
Sec. 13 –A
Less than 1000 before 7
th
day of following month
More than 1000 before 10
th
day of following month
Fines Sec. 8 Fine to be deducted with authority approval should not exceed 3%
of wages. It should not be recovered in installment but are to be
recovered within in 90 days.
THE POWER OF BEING UNDERSTOOD
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recovered within in 90 days.
Allowable deduction Rule
2(g)
Sec. 7(2) (a) to (q) amenities, loans, income tax etc.. Loss of wages not to
be considered as deductions. Penalties like withholding of
increment, reduction to lower scale etc, suspension.
Deduction not to exceedSec. 3 Co-op. Societies –75% Other cases-50% of wages
Recovery of AdvancesSec. 12 Within 18 months in installments, each not exceeding ¼ of
wages. Rule 18 Form IV.

26. OVERVIEW OF IMPORTANT LABOURLAWS
BONUS & GRATUITY

27. The Payment of Bonus Act, 1965
•Applicable to every factory & other establishment in which 20 or more persons are
employed on any day during an accounting year.
•EveryEmployeewhohasworkedfornotlessthan30daysintheyeararecovered .
•EmployeesearningSalaries/Wagesofupto21000/-permontharecoveredbut
bonustobecalculatedon7000/-orminimumwageswhicheverishigherw.e.f.April
2014.
THE POWER OF BEING UNDERSTOOD
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2014.
•[email protected]%ofSalaryorwagesearnedbytheEmployeesduringthe
accountingyearor100/-whicheverishigher.&Maximum20%oftheAllocable
Surplus.

28. The Payment of Bonus Act, 1965
•WagesforEntitlementofBonus-Basic+DA.
•TimelimitofPaymentofBonus-within8monthsfromthecloseoftheaccounting
year.
•DisqualificationofemployeefromBonus-ifdismissedfromserviceforfraud,
riotousorviolentbehaviorwhileonPremisesofEstablishmentortheft,
Misappropriationetc.
THE POWER OF BEING UNDERSTOOD
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Misappropriationetc.
FormstobeMaintained:
•FormA-ComputationofAllocableSurplusunderSec.2(4),
•FormB-SetonandsetoffofallocablesurplusunderSec.15
•FormC-BonusPaidtoemployeesfortheaccountingyear
•FormD-Annualreturn-SubmissionofAnnualreturnwithin30days

29. The Payment of Gratuity Act, 1972
•Applies to every factory, shop or establishment in which 10 or more persons are
employed on any day of the preceding 12 months.
•Benefits for employees in continuous service over 5 years
•Continuous service means uninterrupted service but includes service interrupted on
account of sickness, accident, lay-off, strike, lock out etc.
•Exemption:AnEstablishmentwhichhasobtainedGroupGratuityScheme&
THE POWER OF BEING UNDERSTOOD
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•Exemption:AnEstablishmentwhichhasobtainedGroupGratuityScheme&
GovernmentDepartments.
•Taxability:
ExemptinthehandsofemployeeuptomaximumceilingofRs.10,00,000/-

30. The Payment of Gratuity Act, 1972
•GratuityCalculation:
•15daysoflastdrawnwagesforeverycompletedyearofservice
•MonthlyRateofwages/26*15*No.ofyearservice.
•Pieceratedemployee-Avg.oftotalin3month/15*No.Ofyearsservice.
•Seasonalemployee-Basedon7dayswagesofeachseason.
THE POWER OF BEING UNDERSTOOD
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•Seasonalemployee-Basedon7dayswagesofeachseason.

31. ESIC AMNESTY SCHEME

32. Scheme to Promote Registration of Employers/ Employees (SPREE)
Govt.hasintroducedanewSchemetopromoteRegistrationof
Employers/Employeesasone-timeopportunityto
(a)Encouragetheemployerstoregisterthemselves;
(b)Encouragetheemployerstoregisteremployees,ifany,whohavebeenleft
outofcoverageincludingcontractual,casual,temporaryetc.
TheSchemewillremainopenfortheperiodw.e.f.20
th
December2016to31
st
March2017.
File in link\esic_circular-127-2016_spree_scheme.pdf
32

33. Theemployersregisteringduringtheperiodwillbetreatedascoveredfromthe
dateofregistrationorasdeclaredbythem.
Thenewlyregisteredemployeesshallbetreatedascoveredfromthedateof
theirregistration.
Thiswillnothaveanybearingonactionstaken/requiredunderESIAct,ifany,
Features of SPREE
Thiswillnothaveanybearingonactionstaken/requiredunderESIAct,ifany,
priorto20
th
December2016.
33

34. ESIC Amnesty Scheme
Benefits of SPREE
(Scheme to Promote Registration of Employers/ Employees)

Opportunityfordefaultingfirmstodeclarecorrectemploymentfigures.
Toprovidecontributioninnationalgrowth,bygivingsocialSecuritytomore
Employees.Employees.
OpportunityfortheemployeesandemployerstostartonacleanSlate.
NoEnquiryfortheESICLiabilitypriorto20
th
December2016.
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35. PF AMNESTY SCHEME

36. Enrolment and Establishment coverage campaign 2017.
EFPOhaslaunchedanEnrolmentandEstablishmentcoveragecampaign2017.
ThisisaCampaigntoprovideopportunitytotheemployerstovoluntarilycome
forwardanddeclaredetailsofallsuchemployeeswhowereentitledforPF
membershipbetween01.04.2009to31.12.2016butcouldnotbeenrolledforany
reason.TheCampaignaimstoextendPFbenefitstoemployeeshithertodeprived
EPF(Seventh Amendment) Scheme, 2016
reason.TheCampaignaimstoextendPFbenefitstoemployeeshithertodeprived
ofPFbenefits.
Windowopenfrom01.01.2017to31.03.2017fortheemployer.
Procedure:
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37. Procedure For Availing Benefit of PF Amnesty Scheme
1. Any employer during the campaign period, may send declaration for
membership of the employees who were required or entitled to become
members of the fund on or after the 1st day of April, 2009 but before the
1st day of January, 2017 who could not be enrolled for any reason.
2.
Theemployershall,within15daysfromthedateoffurnishingthedeclaration,remit
theemployer’scontributionpayableinaccordancewiththeprovisionsofthistheemployer’scontributionpayableinaccordancewiththeprovisionsofthis
Schemeandtheemployee’scontributiondeductedfromtheemployee’swages
alongwithinterestpayableinaccordancewithsection7QoftheActanddamages.
Providedthatemployershallnotberequiredtopaytheemployee’scontributionif
thesamehasnotbeendeductedfromthewagesoftheemployee.
3.FileareturninsuchformasmaybespecifiedbytheCentralProvidentFund
Commissioner,totheRegionalProvidentFundCommissioner.
File in link\PF scheme notification.pdf
37

38. Benefits of Enrolment and Establishment coverage campaign 2017.
Themember’scontributioniswaivedunderthisschemefortheperiodbeginning
the1stdayofApril,2009andendingthe31stdayofDecember,2016,ifthesame
isnotrecovered/deductedfromthememberswages.
NoadministrativechargesforEPF&EDLIwillbeleviableforthepastperiodin
respectoftheemployeesenrolledduringthecampaign.
Nominalrateoflevyofdamagesfromtheestablishmentforpaymentof
contributionforthepastperiodduringthecampaignforenrolmentshallbefixedat
Rs1perannum.
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39. FAQ –Enrolment and Establishment coverage campaign 2017
Q. 1 Who can make a declaration?
Anyemployer,whetheralreadycoveredoryettobecovered,canmakea
declaration.
Q.2Whocanbedeclaredamemberbytheemployer?
UndertheCampaignonlysuchemployeecanbedeclaredformembership-
(i)whoisaliveand(i)whoisaliveand
(ii)whofurnishesForm11totheemployerand
(iii)whowasrequiredorentitledtobecomememberofEmployees’Provident
Fundonorafterthe1stdayofApril,2009butbeforethe1stdayofJanuary,
2017butcouldnotbeenrolledasmemberforanyreason.
Q.3Isthereanyrestrictiononthenumberofdeclarationsthatcanbefiledby
anemployer?
No.Thereisnorestrictiononthenumberofdeclarationsthatcanbefiledbyan
employer.
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40. FAQ –Enrolment and Establishment coverage campaign 2017
Q.4 Is there any restriction on the number of employees that can be enrolled
under a single declaration?
No. There is no restriction on the number of employees that can be enrolled under
a single declaration.
Q. 5 Whether online facility is available for making the declaration?
Yes. Facility for making the declaration online is available. However, documentary
declaration can also be filed with the concerned RO/SRO.declaration can also be filed with the concerned RO/SRO.
Q. 6 How is the amount of contribution, interest and damages to be paid after
making the declaration?
Contribution is to be remitted as a supplementary ECRs for every month of the
past period enrolment till December, 2016. Simple interest at the rate of 12% per
annum and damages at the rate of Rupee one per annum are also to be paid
through a separate ECR.
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41. FAQ –Enrolment and Establishment coverage campaign 2017
Q.7WhetheritisnecessaryfortheemployertotakeForm11fromallthe
employees?
Yes.DulyfilledinForm11shouldbeobtainedbytheemployerfromallthe
employeesbeingdeclaredundertheCampaign.Adeclarationtothiseffectis
includedintheDeclarationFormtobesignedbytheemployer.Thedeclaration
givenintheDeclarationFormmaybeacceptedifitisdulyfilledinandsignedbygivenintheDeclarationFormmaybeacceptedifitisdulyfilledinandsignedby
theemployer.
Q.8Aninquiryundersection7AoftheActhasbeeninitiatedagainstthe
employerfortheperiodfromApril,2011toMarch,2014.Cansuchan
employermakeadeclarationundertheCampaign?
AdeclarationcanbemadeundertheCampaignfortheperiodforwhichno
inquiryundersection7Ahasbeeninitiated.Therefore,theemployercanmakea
declarationforemployeeswhosedateofjoining(thedateonwhichtheemployee
41

42. FAQ –Enrolment and Establishment coverage campaign 2017
wasentitledandrequiredtobecomemembersofthefund)iseitherbetween
01.04.2009and31.03.2011orbetween01.04.2014and31.12.2016.For
instance,iftheemployerdeclaresoneemployee,Mr.‘A’tohavejoinedon
01.04.2010,theemployerwillgetthebenefitsundertheCampaigninrespectof
Mr.‘A’onlyfortheperiodforwhichtheinquiryhasnotbeeninitiated,i.e.for
01.04.2010to31.03.2011andfor01.04.2014to31.12.2016.01.04.2010to31.03.2011andfor01.04.2014to31.12.2016.
Q.9Theestablishmentishaving7Ainquirygoingoninrespectof110
employees.Whethertheremainingemployees,forwhomno7Aproceeding
isbeingconducted,canbedeclaredandenrolledundertheCampaign?
Yes.
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43. PF INCENTIVE SCHEME –
PRADHANMANTRIROJGARYOGNA

44. PradhanMantriRojgarProtsahanYojna(PMRPY): EPF
UnderthisschemetheGovernmentofIndiawouldpay8.33%ofEPS(Employees
PensionScheme)contributionofemployerfornewemploymentprovided.
Forthetextile(apparel)sector,thegovernmentwillalsobepayingthe3.67%
EmployeesProvidentFund(EPF)contributionoftheeligibleemployerforthese
newemployees.
This Scheme is applicable for new employment generated & having a new
Universal Account Number (UAN), for 3 years starting from the date of joining in
the establishment.

File in link\RI_PMRPY_17346.pdf
44

45. FAQ -PMRPY
Q. 1
Which establishments are eligible for PMRPY scheme?
AllestablishmentsregisteredwithEPFOcanapplyforavailingbenefitsunder
theschemesubjecttothefollowingconditions:
(a)Establishmentsregisteredwiththe(EPFO)shouldalsohaveaLabour
identificationNumber(LIN)allottedtothemundertheShramSuvidhaPortal
https://shramsuvidha.gov.in
(b)Theeligibleemployermusthaveaddednewemployeestothereference(b)Theeligibleemployermusthaveaddednewemployeestothereference
baseofworkers.
Q.2 What is reference base of workers under PMRPY scheme?
Thereferencebaseofworkersisdeterminedbythenumberofemployees
againstwhomtheemployerhasdepositedthe12%(3.67%EPF+8.33%EPS)
withEPFOason31stMarch,2016,asascertained/verifiedfromthemonthly
ElectronicChallancumReturn(ECR)forMarch,16.Thusitisnecessarythat
theestablishmentshouldhavesubmittedtheirECRforthemonthofMarch,16.
45

46. FAQ -PMRPY
Q.3Whatwouldbethereferencebaseforthenewestablishmentscominginto
existence/gettingregisteredwithEPFOafter01
st
April,2016?
IncaseofnewestablishmentsgettingregisteredwithEPFOafter01
st
April,2016,
thereferencebasewouldbetakenasZero/NILandallnewemployeeswouldbe
entitledtobecoveredundertheScheme,subjecttoothereligibilityconditions.
Q. 4 What is the definition of new employee under the PMRPY scheme?
NewEmployee,forthepurposesofthescheme,isdefinedasNewEmployee,forthepurposesofthescheme,isdefinedas
(i)anemployeeearninglessthanRs.15000permonth,
(ii)notworkinginanyestablishmentregisteredwiththeEPFOinthepast
(priorto01stApril,2016)and
(iii)didnothaveaUniversalAccountNumberpriorto01
st
April,2016.
Alltheaboveconditionsshouldbesatisfiedforanemployeetobecategories
asnewemployee.
It is important to note that for the purpose of the PMRPY Scheme, the UANs
need to be Aadhaarseeded and verified
46

47. FAQ -PMRPY
Q. 5 How long the employer will get the benefit for the eligible new employees?
The Scheme will be in operation for a period of 3 years. Hence, the employers
will continue to get the 8.33% contribution paid by the Government for the eligible
new employee for the next 3 years, provided such employee continues in
employment with the same employer.
Q.6Howtheemployerwouldavailthebenefitsunderthescheme?Q.6Howtheemployerwouldavailthebenefitsunderthescheme?
Thebriefprocessforemployertoavailbenefitsundertheschemeisprovided
below:
TheeligibleestablishmentwillupdatethePMRPYinterfaceeachmonth(latest
by10
th
offollowingmonth)throughaPMRPYformwhereinthedescriptionofthe
post(jobrole)forthenewemploymentneedstobespecifiedalongwiththedate
ofjoininganddateofexit,ifapplicable.
PMRPYformforamonthshouldbesubmittedbyeligibleemployers,preferably
Bythe10
th
dayofthefollowingmonth.
47

48. FAQ -PMRPY
•Incasetheemployerdoesnotsubmittheinformationon-lineonthePMRPYform
by10
th
ofthefollowingmonth,hewillnotbeeligibleforavailingbenefitsunderthe
PMRPYSchemeforthatmonth.
•Anonlinecertificate/undertakingwouldbemadebytheemployerinprescribed
formatdulydigitallysigned.
•TilltheintroductionofnewECR2.0,thereleaseofthecontributionfundwouldbe
madedirectlytotheemployerinhisbankaccount.madedirectlytotheemployerinhisbankaccount.
•Thedetailsofthenewemployee(assubmittedbytheemployerintheECR)willbe
validatedfromtheUANdatabase
•UANseededwithAadhaarnumberwouldbevalidatedinUIDAI/EPFOdatabasefor
verificationandde-duplication
•Afterdueverification,thesystemwillcomputetheamountdueforthat
establishmentagainsttheverifiednewemployee.
48

49. DEFINITION OF WAGES UNDER DIFFERENT
LABOURLAWS

50. Wages under PF Act
Section2(b)“basicwages”means-
•allemolumentswhichareearnedbyanemployeewhileondutyoronleaveoron
holidayswithwagesineithercaseinaccordancewiththetermsofthecontractof
employmentandwhicharepaidorpayableincashtohim,
•butdoesnotinclude–
•i).Thecashvalueofanyfoodconcession;•i).Thecashvalueofanyfoodconcession;
•ii).Anydearnessallowance(thatistosay,allcashpaymentsbywhatevername
calledpaidtoanemployeeonaccountofariseinthecostofliving),house-rent
allowance,overtimeallowance,bonus,commissionoranyothersimilarallowance
payabletotheemployeeinrespectofhisemploymentorofworkdoneinsuch
employment;
•iii).Anypresentsmadebytheemployer.
50

51. Wages under ESIC Act
Wagesu/s2(22)oftheESIAct,forthepurposeofchargingofcontributionincludes:-
•Matinee allowance which is being paid to employees in Cinema Houses
•Shift allowance paid to employees who work on shift duty at odd shifts
•Location allowance paid, in addition to DA to meet the high house rent
•Compensatory allowance
•Cash handling allowance paid to Cashier•Cash handling allowance paid to Cashier
•Supervisory Allowance
•Additional pay paid to training staff
•Charge allowance
•Steno/Typist allowance (cont…)
51

52. Wages under ESIC Act (Cont..)
•Plantallowance
•Honorarium for looking after the hospital/dispensary
•Computer allowance
•Gestetner/Photocopier/Printer allowance
•Personnel/Special allowance
•Machine allowance•Machine allowance
•Conveyance allowance
•First-aid allowance
•Personnel allowance -Pay over and above the basic wage and dearness
allowance for skill, efficiency or past good records.
•Area allowance -given to employees living in a particular area to meet the high
cost of living in that area.
•Extra payment if payment is made within an interval of two months.
52

53. Payments not include as Wages under ESIC Act
ThefollowingitemswillnotformpartofthewageeitherunderSection2(9)orunder
Section2(22)oftheESIAct:-
•Payment made on account of un-availed leave at the time of discharge.
•Commission on advertisement secured for Newspapers, if not paid to the regular
employee.
•Fuel allowance/Petrol allowance•Fuel allowance/Petrol allowance
•Entertainment allowance
•Shoes allowance
•Payment made on account of gratuity on discharge/retirement
•Any incentive or other payment made at an interval exceeding 2 months
•Payment made on encashment of leave
53

54. Wages under Minimum Wage Act
“Wages"meansallremuneration,capableofbeingexpressedintermsofmoney,which
would,ifthetermsofthecontractofemployment,expressorimplied,werefulfilled,be
payabletoapersonemployedinrespectofhisemploymentorofworkdoneinsuch
employmentandincludeshouserentallowance,butdoesnotinclude--
•(i) the value of--(a) any house-accommodation, supply of light, water, medical
attendance, or (b) any other amenity or any service excluded by general or special
order of the appropriate Government; order of the appropriate Government;
•(ii) any contribution paid by the employer to any Pension Fund or Provident Fund or
under any scheme of social insurance;
•(iii) any travelling allowance or the value of any travelling concession;
•(iv) any sum paid to the person employed to defray special expenses entailed on
him by the nature of his employment; or
•(v) any gratuity payable on discharge;
54

55. WagesunderGratuityAct
“Wages”meansallemolumentswhichareearnedbyanemployeewhileondutyor
onleaveinaccordancewiththetermsandconditionsofhisemploymentandwhich
arepaidorarepayabletohimincashandincludesdearnessallowancebutdoes
notincludeanybonus,commission,houserentallowance,overtimewagesandany
otherallowance.
55

56. WagesunderBonusAct
“Salaryorwage”meansallremuneration(otherthanremunerationinrespectofover-time
work)capableofbeingexpressedintermsofmoney,whichwould,ifthetermsofemployment,
expressorimplied,werefulfilled,bepayabletoanemployeeinrespectofhisemploymentor
ofworkdoneinsuchemploymentandincludesdearnessallowance (thatistosay,allcash
payments,bywhatevernamecalled,paidtoanemployeeonaccountofariseinthecostof
living),butdoesnotinclude—
(i)anyotherallowancewhichtheemployeeisforthetimebeingentitledto;
(ii)thevalueofanyhouseaccommodationorofsupplyoflight,water,medicalattendanceor(ii)thevalueofanyhouseaccommodationorofsupplyoflight,water,medicalattendanceor
otheramenityorofanyserviceorofanyconcessionalsupplyoffoodgrainsorotherarticles;
(iii)anytravellingconcession;
(iv)anybonus(includingincentive,productionandattendancebonus);
(v)anycontributionpaidorpayablebytheemployertoanypensionfundorprovidentfundor
forthebenefitoftheemployeeunderanylawforthetimebeinginforce;
(vi)anyretrenchmentcompensationoranygratuityorotherretirementbenefitpayabletothe
employeeoranyexgratiapaymentmadetohim;
(vii)anycommissionpayabletotheemployee.
56

57. Applicability Of Laws On Diff Components Of Wages
BASIC
DA/
COLA
HRA
WASHING
/ SHOES
ALLO-
WANCE
TRAVELLING
/CONVE-
YANCE
ALLOWANCE
EDUCATION
ALLOWANCE
PETROL/
ENTERTA
INMENT
ALLO-
WANCE
LTA
TELEPH
-ONE
ALLOW
UNIFORM
ALLOW
MEDICAL
REIMBU-
RSEMENT
OVER-
TIME
OTHER
INCENTIVE/
EARNING
Y Y N N N N N N N N N N N
PF
Y Y N N N N N N N N N N N
ESIC
YYYN Y YNYYYNYY
MIN. WAGE
YYYY N Y YNYYNNN
PT
YYYY Y Y YYYYNYY
GRATUITY
YYNN N NNNNNNNN

58. RECENT UPDATES IN VARIOUS LABOURLAWS

59. PF CONTRIBUTIONS CAN BE DEPOSITED IN PRIVATE
SECTOR BANKS
•The Government of India has amended paragraph 38 of the Employees’ Provident
Fund Scheme relating to ‘Mode of Payment of Contribution’
•Prior to June 2016 this paragraph was amended whereby in addition to State Bank
of India other nationalised banks were included.
•NOW by a Gazette of India Notification No. G.S.R.6(E) dated 4
th
January, 2017, •NOW by a Gazette of India Notification No. G.S.R.6(E) dated 4
th
January, 2017,
Employees’ Provident Fund Scheme has provided for remittances through All
Scheduled Banks in India including Banks in Private Sector.
59

60. Changes in The Maternity Benefit Act 1961
TheMaternityBenefit(Amendment)Bill,2016passedbyRajyaSabhaon11
th
August,2016whichinter-aliaincludeincreasingmaternitybenefittowoman
coveredunderMaternityBenefitAct,1961form12weeksto26weeks,forupto2
survivingchildrenallowingthemothertotakecareofthechildduringchild’smost
formativestage.
Providesmaternitybenefitof12weekstocommissioningmother(Incaseof
surrogatechild)andAdoptingmother(Incaseofadoption)surrogatechild)andAdoptingmother(Incaseofadoption)
Facilitates“workfromhome” toamotherwithmutualconsentoftheemployee
andtheemployer.
ThebillispendingtobepassedonLokSabhaandaccordingly,thelawhasnot
comeintoforceyet.
Fileinlink\MaternityBenefitBill,2016.pdf
60

61. Changes in ESIC Act 1948
ESICcoverageonwageceilinghasbeenincreasedformRs.15,000/-toRs.
21,000/-.(w.e.f.01.01.2017)
ESICcontributionreducedfornewlycoveredareaofimplementationfor2years.
Employeecontributionratefrom1.75%to1%andEmployercontributionrate
4.75%to3%totalcontributionrate6.5%to4%.(w.e.f.01.01.2017)
Fileinlink\ESIC21000.pdf
Fileinlink\Reduceincontributionrate.pdf
61

62. Changes in Wages Act 1936
Amendment
toSection6ofthePaymentofWagesActwhichwillfurtherprovide
creditingthewagesinthebankaccountoftheemployeesorpaymentthrough
chequealongwiththeexistingprovisionsofpaymentincurrentcoinorcurrency
notes.
Also,theappropriateGovernment(CentreorState)willhavetocomeupwiththe
notificationtospecifytheindustrialorotherestablishmentswheretheemployernotificationtospecifytheindustrialorotherestablishmentswheretheemployer
shallpaywagesONLYthroughchequeorbycreditingthewagesinemployees’
bankaccount.
Fileinlink\ThePaymentofWages(Amendment)Ordinance2016.pdf
62

63. Gujarat Amendment of Minimum Wages Act 1948
InMinimumWageAct,insection11(1),thefollowingprovisionisadded-
EveryestablishmentregisteredundertheFactoriesAct&GujaratShopAnd
EstablishmentAct1948,whereinnotlessthen20employeeareengaged,shall
paytheminimumwageonlythroughchequeorbydepositinginanyBank.
Fileinlink\GujaratWageNotification.pdf
63

64. Changes in Labour Welfare Fund Gujarat 1953
Thefollowingchangesaremadeinthecontributionrateofemployees&employer-
EmployeerateincreasedfromRs.3toRs.6
EmployerrateincreasedfromRs.6toRs.12
Labourwelfarefundtobepaidonlythroughonlinemode.(www.glwb.gujarat.gov.in)
AbovementionedchangeseffectivefromDecember2016
Fileinlink\LWFGujarat.pdf
64

65. Changes in EPS
TheMinistryofLabourandEmploymenthasnotifiedthat––
1.MembersandpensionersoftheEmployees’PensionSchemedesirousof
continuingtoavailpensionandmembershiptotheEmployees’PensionScheme
byavailingtheCentralGovernment’scontributionandsubsidyunderthesaid
Scheme,arerequiredtofurnishproofofAadhaarnumberorundergoAadhaar
authenticationaspertheprocedurelaiddownbytheEmployeesProvidentFund
OrganisationforbetterandhasslefreeidentificationthroughAadhaar.OrganisationforbetterandhasslefreeidentificationthroughAadhaar.
2.AmemberorapensioneroftheEmployees’PensionSchemedesirousof
continuingthebenefitofthesaidScheme,whoisnotyetenrolledforAadhaar
shallberequiredtomakeanapplicationforAadhaarenrolmentby31stJanuary,
2017,incaseheisentitledtoobtainAadhaaraspertheprovisionsofsection3of
thesaidActandsuchmembersandpensionersmayvisitanyAadhaarenrolment
center(listavailableatwww.uidai.gov.in)togetenrolledforAadhaar:
PPT7.1.17\Fileinlink\AADHARCARDMANDATORYEPF.pdf
65

66. Changes in The Payment of Bonus Rules, 1972
Therule5ofthepaymentofBonusRules,1972wasamended:-
NewtimelineforsubmissionofFormDisnow1
st
Februaryforthefilingofthe
return.Hence,nowtheannualreturnneedstobefiledforeverycalendaryear
before1
st
Febofthefollowingyearirrespectiveofthefinancialyearthatan
employerfollows.(w.e.f.6
th
Dec.2016.
66

67. RSMASTUTE CONTRIBUTION TO
HELP YOU ACHIEVE YOUR GOALS

68. What we are doing to Help You
•Launch of Labour Law Support Mobile app
•Representations being created for government
•RTI applications for clarifications on the schemes
•Proposal to create an employer’s association to address issues
of employers including representations, writ petitions etc
•Advisory, software, compliance audits & other services
•Compliance dashboard app
•Assistance to clients to get benefits for their employees
•Awareness programs, presentations, seminars etc
•Research publications

69. THANK YOU FOR
YOUR TIME AND YOUR TIME AND
ATTENTION
69