Anda di halaman 1dari 12


Statutory means "of or related to statutes," or what we normally

call laws or regulations. Compliance just means to comply with
or adhere to. So statutory compliance means you are following
the laws on a given issue.
The term is most often used with organizations, who must
follow lots of regulations.
When they forget or refuse to follow some of those regulations,
they are out of statutory compliance. A company that follows all
the rules, is in statutory compliance.
Safeguarding the employees and the enterprise from untoward
risks by managing and consulting on issues such as retirement
benefits and Taxation
Provident Fund
Profession Tax
The Minimum Wages Act
The Maternity Benefit Act
The Payment Of Bonus Act
The Payment Of Wages Act
Was originally applicable to non-seasonal factories using power and
employing 20 or more persons; but it is now applicable to non-seasonal power
using factories employing 10 or more persons and non-power using factories
employing 20 or more persons
All the employees in the factories or establishments to which the Act applies
shall be insured under this Act
The contribution comprise of employer’s contribution and employee’s
contribution at a specified rate
Contribution rate : 1.75% - employees
4.75% -employers
The ceiling 10,000/- gross salary. After reaching the ceiling one will be
exempted. (with effect from 1.10.2006)
Employer is liable to contribute & deduct specified rate of amount and submit
it to the Corporation within 21 days.
Two contribution periods each of six months:
1st April to 30th Sept
1st Oct. to 31st March
Two corresponding benefit periods of six months :
1st January to 30th June
1st July to 31st December
PF and Miscellaneous Provisions Act, provides for compulsory
contributory fund for the future of an employee after his retirement or
for his dependents in case of his early death

It extends to the whole of India except the State of J&K

Every factory engaged in any industry specified in Schedule 1 in which

20 or more persons are employed

Every other establishment employing 20 or more persons or class of such

establishments which the Central Govt. may notify and any other
establishment so notified by the Central Government even if employing
less than 20 persons

PF is contributed from both the sides @12% of the basic salary.

Contribution for the purpose of Employees' pension Scheme is
8.33% of (12% of employers contribution towards PF) or Rs.540/- which
ever is less, will be transferred to Employees’ pension scheme and the
balance amount will go towards Employee PF.
Professional tax or employment tax is a state-based tax. It is allowed as a
deduction from the gross income before computing the tax.
Duration of deduction is half year-
1st day of April to 30th September
1st day of October to the 31stMarch of a year.
PT is deducted slab wise-
1 to 2500-nil
2500 to 3500 -Rs 60
3501 to 5000 - Rs 120
5001 to 10000- Rs 175
and above 10000 Rs 200 per month except Rs 300 in the month of february
Each and every employee receiving pay from the revenue of the Central
Government or any State Government is entitled to pay profession tax
Any organization whether incorporated or not, which is owned or
controlled by the Central Government or any State Government is eligible
to pay PT
Gratuity is an amount given to employees by employer
when they leave the job after completing five years or
minimum 240 days per year or after retirement. The number
of year may differ from company to company
Gratuity is payable under the payment of wages act.
Gratuity shall be payable to an employee on the termination
of his employment after he has rendered continuous service
for not less than five years.
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease

Gratuity is calculated as Basic + DA divided by 26 * No of

years of service *15.
This act provides for fixing minimum rates of wages.
Wages shall mean all remuneration payable to an employed person on the fulfillment of
the contract employment and includes HRA.
 It Includes
(i) a basic rate of wages and special allowance call the cost of living allowance
(ii) a basic rate with or without cost of living allowance plus any concession on the
supply of essential commodities.
 It excludes
(i) The value of rent free accommodation, supply of light, water, medical .....
(ii) Contributions paid by the employer towards the PF or any scheme of social
(iii) Travelling allowance / Travelling concession
(iv) Gratuity

The appropriate government may fix-:

A minimum rate of wages for time work ("a minimum time rate").
A minimum rates of wages for piece work ("a minimum piece rate").
A minimum rate of wages on a time work basis ("a guaranteed time rate")
A minimum rate of overtime work done (“a overtime rate")

The inspectorate staff of the Labour Department takes action on complaints received
from workmen/Unions.
The penalty for violation of is fine of R.500/- or imprisonment upto a period of six
months or both.
If a worker gets less payment, he can also file a claim before the Competent Authority
appointed under the Act, which are Deputy Labour Commissioners for the respective
The authority can impose penalty up to 10 times the difference in minimum wages that
was due and paid
To regulate employment of women for certain periods before and after
child birth and to provide for maternity benefit.
Payment of maternity benefit shall apply to women workers to whom
ESI Act does not apply.
The Act applies to all establishments in which ten or more people are
The maternity benefit shall be at the rate of average daily wage for the
period of actual absence. The maximum period of entitlement shall be
12 weeks of which not less than 6 weeks shall precede the expected
date of delivery.
Maternity benefit shall be payable to employee or any other persons as
per the nomination.
The Amount of benefit upto the period of expected delivery shall be
paid in advance. The balance due for the subsequent period shall be
paid within 48 hours from delivery of child.
The Payment of Bonus Act imposes statutory liability upon the
employers of every establishment covered under the Act to pay bonus
to their employees.
It provides for payment of minimum and maximum bonus and linking
the payment of bonus with the production and productivity.
The Act applies to every factory where 10 or more workers are working
and every other establishment in which 20 or more persons are
employed, on any day during an accounting year
Every employee receiving salary or wages upto RS. 3,500 p.m. and
engaged in any kind of work whether skilled, unskilled, managerial,
supervisory etc. is entitled to bonus for every accounting year if he has
worked for at least 30 working days in that year
The punishment provided for contravention of any provisions of the
Act or any rule made there under is imprisonment for a term, which
may extend for 6 months or with fine, which may extend to Rs. 1000/- or
with both.
It is a central legislation which applies to the persons employed in the
factories and to persons employed in industrial or other establishments
This Act does not apply on workers whose wages payable in respect of
a wage period average Rs. 1600/- a month or more.
This Act has been enacted with the intention of ensuring timely
payment of wages to the workers without unauthorized deductions.
The salary in factories/establishments employing less than 1000
workers is required to be paid by 7th of every month and in other cases
by 10th day of every month.
A worker, who either has not been paid wages in time or an
unauthorized deductions have been made from his/her wages, can file a
Claim either directly or through a Trade Union or through an Inspector
under this Act.
The present day legal climate is one of
uncertainty and confusion. In most cases, a
law comes to light only after its
contravention, resulting in severe penalties.
Statutory Compliances is a must in keeping
you away from the long arm of the law!