We are pleased to release our Labour Law Insights Volume 6. This edition covers updates and amendments regarding labour law regulations and EPFO. Whether it is changes in minimum wage, working hours, or employee benefits, we provide comprehensive insights.
Key insights:
- Labour departments across 12 states have revised the rate of minimum wages due to an increase in the consumer price index, and employers with presence in these states should take note of the revised rates. These states include Andhra Pradesh, Bihar, Madhya Pradesh, Odisha, Gujarat.
- A significant development for Gujarat is with respect to contract labourers who are not covered under the Scheduled employment as per the Minimum Wages Act. Such workers are now covered within the ambit of minimum wages compliance and all the contractors and principal employers are required to ensure due compliance with this requirement.
- The West Bengal Government has pursuant to the DPIIT’s recommendation, rolled out the smart online and compliance dashboard for ease of doing business. It is expected to provide more transparency to the establishments operating in the state.
- The measures taken by the Kerala Government towards introducing online payments through NEFT and the modern Banking Transfer System, along with the preparation of register electronically under Kerala Labour Welfare Fund are a welcome move which will go towards improving the overall ease of doing business in the state.
- The Haryana Government, pursuant to the ease of business guidelines issued by the DPIIT, has launched the online dashboard to provide transparency in disseminating information under six labour legislations. This will help potential investors and existing establishments understand and plan Haryana's business activities.
EPFO updates
- The EPFO is aiming to boost transparency and prevent unjust practices, which may occur when utilising reserves and surplus. This measure safeguards the interests of all beneficiaries and reinforces the principle of fair and equitable distribution of Provident Fund earnings. The establishments are expected to comply with these guidelines to avoid consequences during audits, particularly when surrendering the PF exemption or cancelling the exemption status.
- However, clarifications from EPFO are still awaited on:
- Whether the EPFO will question the surplus accumulated by the trusts before the issuance of this circular for compliance under the new guidelines or the circular applies prospectively from the date of its issue.
- Guidance from EPFO would help clear the concerns on how these funds should be managed under the current regulatory structure since there is not much clarity under the existing provisions of the EPF Act and EPF Scheme on the utilisation of reserves and surplus.
- Manner of calculation of the amount of distributable surplus, which is necessary to address ambiguities such as:
- Whether unrealised gains should be included in the distributable surplus or
- Whether only the realised gains should form part of the distributable surplus and
- Whether provisions for investment losses can be adjusted when calculating the surplus.
- The EPFO laid down necessary guidelines for employers to generate DSC and E-Sign to authenticate establishment documents. They have also mentioned the points which employers should take care of while applying for a DSC or E-Sign so that chances of rejection are mitigated. The EPFO also warned that any person authorised by the employer is jointly and severally liable for any loss/damage caused using DSC/E-Sign. All employers are advised to go through the guidelines before applying for DSC and E-Sign.
- The EPFO’s decision to expedite pension disbursement for its members, allowing them to receive their benefits earlier and avoid delays due to public holidays, is commendable. This initiative will bolster the trust and credibility of the EPFO.
