Shardul Amarchand Mangaldas & Co updates

Provident fund liability: EPFO to the rescue
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 25 September 2019

The Employees' Provident Fund Organisation recently directed the provident fund authorities not to initiate inquiries into employers' previous wage structures on the assumption that certain allowances might not have been treated by employers as basic wages for the purposes of provident fund contributions. Such inquiries had been prompted by the Supreme Court's decision in Vivekananda, which clarified the legal position regarding allowances that fall within the definition of 'basic wages'.

Haryana government makes compliance with Standing Orders Act mandatory for other registrations
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 21 August 2019

The Haryana state government recently issued a notification under the Standing Orders Act and introduced a new requirement for principal employers and contractors to file an undertaking of compliance with the act. While the 2019 notification aims to ensure the effective enforcement of the act, employers may perceive the move to require compliance a condition precedent to obtaining registration under other labour laws as a roadblock.

Keeping up with the times: EPF goes digital
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 10 July 2019

The employees' provident fund is a social security fund comprising contributions from employers and employees, which are paid to employees on their retirement. The entire process is administered by the Employees' Provident Fund Organisation (EPFO), which is a statutory body established by the Ministry of Labour and Employment. To keep up with digitisation, the EPFO recently updated the process under which subscribers can withdraw and transfer provident funds.

Casting a wider net – ESI rates amended
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 03 July 2019

The Employees' State Insurance (ESI) (Central) Rules 1950 were recently amended to reduce the required rates of contribution to the statutory fund maintained by the ESI Corporation for the provision of sickness and health benefits. The aim of this change is to cast a wider net by expanding social security coverage to a larger part of the population. However, news reports indicate that – as is often the case – the change has come under criticism.

To compete or not to compete – that is the question
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 19 June 2019

Non-compete restrictions are the tool most commonly used by employers to protect their proprietary interests following the end of an employment relationship, particularly in the case of C-suite employees. However, non-compete restrictions which apply beyond the term of an employment relationship are generally unenforceable in India. That said, this does not mean that employers have no recourse whatsoever.

Supreme Court rules on whether special allowances constitute basic wages for purposes of PF contributions
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 24 April 2019

The Supreme Court recently examined whether certain components of an employee's overall salary are subject to provident fund (PF) contributions. As the Supreme Court has clarified that special allowances paid to employees must be included in the calculation of PF contributions, employers should review and analyse their current salary structures to determine any increase in PF liabilities.

Reducing minimum period of unemployment to withdraw provident fund accumulations
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 22 August 2018

The Central Board of Trustees of the Employees' Provident Fund Organisation recently approved a proposal to permit provident fund members to withdraw 75% of their accumulations after a period of one month of continuous unemployment instead of two months. The proposal would come into effect when the Employees' Provident Funds and Miscellaneous Provisions Act and the Employees' Provident Funds Scheme are amended.

Code on Wages soon to be introduced
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 28 March 2018

The new Code on Wages 2017 was recently introduced in Lok Sabha and is currently pending approval. The code seeks to integrate, amend and simplify the four central labour laws in order to reduce the multiplicity of definitions given under various labour legislation and foster a conducive labour environment by facilitating ease of compliance, thereby promoting the establishment of more organisations and creating more employment opportunities.

Increase in gratuity limit
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 15 November 2017

The Payment of Gratuity Act 1972 is a form of social security legislation which prescribes a scheme for the payment of gratuity. For the private sector, gratuity is capped at Rs1 million, whereas central government employees can receive gratuity of up to Rs2 million. There is a proposal to increase the cap for the private sector in order to align it with the central government. Although this is a step forward in ensuring better benefits to eligible employees, it will increase employers' financial burden.

Disabilities Act and role of private employers
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 04 October 2017

The federal government recently enacted a new act in order to empower disabled individuals and ensure their inclusion in the education and employment spheres. Although the government is primarily responsible for ensuring that disabled individuals receive equal treatment under the act, private organisations have also been made accountable for various obligations.

Social security obligation for outbound employees
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 28 June 2017

With the growing landscape of global businesses, there is a constant need to deploy employees for international assignments not only for skill development, but also for the business needs of the organisation. In order to abate similar obligations in a host country, India has entered into social security agreements (SSAs) with many countries. SSAs offer various benefits, such as the totalisation of benefits and exemption from dual contributions of social security.

Right foot forward: 2016 amendments to maternity benefits
Shardul Amarchand Mangaldas & Co
  • Employment & Benefits
  • India
  • 15 March 2017

The Maternity Benefit (Amendment) Bill 2016 was recently passed by the upper house of Parliament. Key changes include enhanced maternity leave, the introduction of maternity leave for adopting and commissioning mothers and new remote working provisions. The amendments are undoubtedly a positive step towards promoting diversity and the increased participation of women in the workforce in the manufacturing and service industries.

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