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LABOUR LAWS Act Payment of Bonus Act, 1965 To Whom it applies (Employers) Beneficiaries under the Act (Employees)

a) Every factory (as defined in Employees other than Factories Act). apprentice

Salary or wage :

b) Every other establishment in a) Who have worked for which 20 or more persons (less than more than 30 days in a 20 but 10 or more if app. Govt. financial year. notifies) are employed on any day during the accounting year.


c) Special provisions with respect to b) Having salary / wages certain establishments are provided less than Rs. 10000/d) Employees employed through c) For persons drawing contractors on building salary between Rs. 3500/operation. and Rs. 10,000/- per month, bonus will be based on salary of Rs. 3500/- per month only.

All remuneration other than overtime and includes DA, and retention allowances Does not include :

i) any other allowance which the employee is for the time being entitled to; ii) the value of house accommodation or of supply of light, water medical attendance or other ammenity or of any service or of any concessional supply of foodgrains or other articles. iii) any travelling concession iv) any Bonus (including incentive, production and attendance Bonus v) any contribution paid or payable by empoyer to any pension fund or PF

vi) any retenchment compensation Gratuity or Ex gratia payment vii) any commission payable to the employee. Payment of Gratuity Act, 1972 a) Every factory (as defined in factories Act) mine, oil field, plantation port and railway company.

a) Any person employed on wages (other than apprentice)


b) Every shop or establishment to which shop and establishment Act of a state applies in which 10 or more persons are employed on any day of the preceding 12 months.

b) At the time of retirement/ resignation on superannuation, an employee should have rendered continuous service of not less than 5 years.

Includes :

c) Any establishment employing 10 c) In case of death or or more persons as may be notified disablement, the gratuity is by the central Government. payable even if he has not completed 5 years of service.

i) All emoluments earned by the employee while on duty or on leave including DA, Does not include : Bonus, Commission, HRA, over time and any other allowance.

Industrial Disputes Act, 1947

Wages :

Any industry carried by or under authority of any dept.of Central / State Govt. or local authority or any other industry ( excluding any agricultural operations, hospitals/dispe-saries, educational, scientific research or training institutions charitable/social/philanthropic services,khadi or village industries,activities related to defence research automic energy and space any domeshtic services,professional concern and co.op.society/club employing less than 10 persons. Not applicable to dispute arising after closure of the industry.

Any person (including apprentice) employed in any industry to do any manual, unskilled, skilled, teaching, operational, clerical, Supervisory work for hire,reward and includes any such persons who has been dismissed,discharge,retrenc hed but does not include aperson who is employed mainly in managerial or administrative capacity and draws more than Rs.6500/p.m.and persons employed in defence /police force. (Amended w.e.f. 26.6.2006).

Includes: All remuneration capable of being expressed in terms of money like

i) Basic wages, D.A. value of free food or food allowances in lieu of whole or part of the wages, overtime, and other allowances, ii) Value of House accommodation, supply of light and water, medical attendance or other amenities or any service or of any concessional supply of food grains or other articles, iii) Value of travelling concession,

iv) Any commission payable on promotion of sales or business or both.

Does not include:

i) Any Bonus ii) PF, Pension or Gratuity

Employees Provident Funds and Miscellaneous Provisions Act, 1952

a) Every establishment which is a factory engaged in any industry specified in Schedule I and in which 20 or more persons are employed and

Any person who is employed for wages in any kind of work of an establishment or employed through contractor in or in connection with the work of an establishment and whose wages do not exceed Rs. 6,500/- p.m. However, an employee covered under the Act will continue to be covered under the Act even if his wages exceed Rs. 6,500/p.m. but will continue to get benefits as if his wages were Rs. 6,500/- p.m.

Bacis wages :-

b) Any other establishment employing 20 or more persons, whom Central Govt. may, notify.

In case of International workers PF is applicabale on entire salary. As per notification dated 1st Oct, 2008.

Includes :-

c) Any establishment employing even less than 20 can be covered by a specific Central Govt. notification.

All emoluments earned while on duty on leave and holidays) Does not include :Value of food consession, DA, HRA, overtime allowance, any Bonus, Commission or similar allowance. contribution is payable on D. A. also as per sect. 6 of the Act

The Workmens Compensation a) Employer includes any person whether incorporated or not and any agent of employer and when services are temporarily lent or let Act, 1923. on hire to anotherperson, then means such other person.

Any workman who is injured by accident arising out of and in the course of his employment, or any workman, employed in specified list of employment, contracts any disease specified therein as an occupational disease peculiar to that occupation.

Wages :-

Wages Include:

Any Privilege or benefit which is being capable of estimated in money, other than travelling allowance or the value of travelling concession or a contribution paid by the employer of a workman towards any pension or PF or a sum paid to a workman to cover any special expenses entailed on him by the nature of his employment. The Employees State a) All factories excluding seasonal Insurance factories

a ) Any person employed for wages (up to Rs.10000/w.e.f. 1.10.2006) in or in connection with the work of a factory or establishment and

Act, 1948.

i) employing 10 or more persons if working with power.

b) Any person who is directly employed by the employer in a factory or through is agent on work which is ordinarily part of the work of the factory or incidental to pupose of the factory. c) Rate of contribution of the wages:

Wages :

ii) employing 20 or more persons if working without power.

include :

b) Shops employing 20 or more persons.

For Employer - 4.75%

i) All remuneration paid or payable in cash to the employee including payment in respect of period of authorised leave, lockout, strike which is not illegal or lay-off

c) Any establishment specially notified by the Government.

For Employee - 1.75%

ii) Other additional remuneration paid at interval not exceeding 2 months

d) Contribution period :1st April to 30th September 1st October to 31st March

Does not include :

e) Benefit period 1st January to 30th June/ 1st july to 31st December

i) Contribution to PF, Pension or Gratuity payable on discharge,

f) Date of submission of return :- within 42 days from the end of contribution period.

ii) Any travelling allowances or value of any travelling concession,

iii) Sums to be defray special expenses by nature of employment. The employees Pension Scheme, 1995.

Employees who :

a) Members

i) have been members of the Employees Pention Scheme, 1971.

b) Heirs will be paid the pension as per the Scheme provided in the Rules.

Minimum Wages Act, 1948.

ii) On or after 16.11.95 become members of employees P.F. Scheme, 1952. iii) who have been members of the employees P. F. Scheme, 1952 opt to join within 6 months from 16.11.1995. Any person who employs directly or through another person, wheather for himself or for any other person employes one or more employees in any scheduld employment in respect of which minimum rates of wages have been fixed under this Act.

Any person who is employed for hire/reward to do any work in a scheduled employment and includes an outdoor worker to whom any articles or materials are given for doing some work either at home / any other premises.

Wages :

or through another person, wheather for himself or for any other person employes one or more employees in any scheduld employment in respect of which minimum rates of wages have been fixed under this Act.

employed for hire/reward to do any work in a scheduled employment and includes an outdoor worker to whom any articles or materials are given for doing some work either at home / any other premises.

Includes :- All Remuneration being expressed in terms of money including HRA - Does Not Include :i) Value of House Accommdation supply of light, water, medical attendance. ii) any other amenity or any service, excluded by an order of the Appropriate Government. iii) any travelling allowance or any value of travelling concession. iv) any sum paid to defray special expenses entitled due to nature of employment v) any Gratuity payable on discharge Payment of Wages Act, 1936. a) Every person employed in any factory, upon any railway or through sub-contractor in a railway and a person employed in an Industrial or other establishment Wages

Every person who is employed in any of the above mentioned etablishments and who is drawing less than Rs. 6,500/- per month. b) The State Government may by (Amended w.e.f. notification extend the provision to 11.08.2005) any class persons employed in any establishment or class of establishments.

a ) Includes :-

i) All remuneration by way of salary or allowance capable of being expressed in terms of money.

ii) Payable under any Award or Settlement.

iii) On account of overtime, holidays, leave, production, attendance, bonus etc.

iv) Payable by reason of termination which dose not provide for the time within which the payment is to be made. v) To which the person employed is entitled under any scheme framed hereunder any law for the time being in force. b ) Dose Not Include i) Bonus (wheather under a scheme of profit sharing or otherwise) which dosent form part of remuneration payable under the terms of employment or which is not payable under the Award ii) Value of house accomadation or of light, water, medical attendance or other amount or of any services excluded from the competition of wages by the Government. iii) P. F. and Gratuity iv) Travelling allowance v) Any sum paid to defray special expense due to nature of his employment The Bombay Shops & Establishment Act,1948

a ) State of Maharashtra, Local All Employees Areas given in Schedule I, Areas where C.P. and Berar and Hyderabad Shops and Establisments Act were applicable before the amending Act of 1960.

b ) Local areas having population more than / less than 25,000 by Notification ( Section 1 )


c ) Any class of establishment or persons by Notification (Section 5 )

W.E.F. 20.07.2004

Non-Applicability :

( Basic wages ) Skilled :

a ) Certain provisions of the Act in column III of Sch. II to Establishments in Column II

Rs. 3330/- ( Zone I )

( Section 4 )

Rs. 3230/- ( Zone II )

b ) Factories to which the Factories Act is applicable. ( Section 17 )

Rs. 2930/- ( Zone III )


Rs. 3230/- ( Zone I )

Rs. 3130/- ( Zone II )

Rs. 2830/- ( Zone III )

Unskilled Rs. 3130/- ( Zone I )

Rs. 3030/- ( Zone II ) Rs. 2730/- ( Zone III ) Plus the Special allowance as may be declared by the Government of Maharashtra Special Allowance from 1.7.2009 to 31.12.2009. Rs. 955.30 for all categories and all Zones.

Employers to remember for making Statutory Deductions and for filing Returns under various Labour Laws Name of the Act Date P.F. Act Pay P.F. Deductions Before 15th of the following month Submit monthly returns Before 25th of the following month ESI Act

Make payment Before 21th of the following month Professions Tax Act Employers to submit Form III & PayBefore tax Deducted month end from employees wages Maternity Benefit Act Submit Return in Form XI Before 15th January of each year Contract Labour Act Submit Annual Return in Form XXI (Before In case 31st of State) Jan. (State) Form No. XXV in case of central Central Factories Act Submit Annual Return in Form 27 Before 1st Feb. Workmens Compensation Act Submit Annual Return Before 1st Feb. The Payment of Wages Act Submit Return in Form V Before 15th Jan.

Benefits a) Subject to provisions:Minimum bonus shall be 8.33% of salary /wages earned or Rs. 100 whichever is higher . b ) If allocable suplus as computed under the Act exceeds the amount of minimum bonus, then bonus shall be payable at higher rate subject to a maximum 20% of salary / wages. c) Customary bonus paid is deductible.

Other Important Issues


a) Computation of bonus is Imprisonment upto 6 to be worked out as per months and / or fine schedules I to IV of the Act. upto Rs.1000/- or both

b) Records in form Nos. A, B & C are to be maintained.

c) Annual Return in Form D to be filed. d) Bonus must be paid within a period of 8 months from the close of accounting year.

a) The quantam of gratuity is to be computed at the rate of 15 days wages based on the rate of wages last drawn by the employee concerned for every completed year of service of a part thereof 6 months. b) The total amount of gratuity payable shall not exceeds Rs. 3.5 lakhs.

a) Employers other than Non payment of Central Govt. or state Govt. Gratuity payable obliged to obtain an under the Act insurance from LIC in prescribed manner for liability for payment of gratuity.

b) Establishments to which is punishable with act applies must get imprisonment up to registered with the 2 years (minimum 6 controling Authority. months) and / or fine upto Rs. 20,000/Other contraventions / offences attract imprisonment up to 1year and / or fine up to 10,000/-. Or both. c) Once Act applies,it continues to apply even if employment strength falls below 10.

c) In case where higher benefit of gratuity is available under any gratuity scheme award or agreement, the employee will be entitled to higher benefits.

d) Calculation of Gratuity Monthly salary / 26 x 15 days x No. of years

The Act Restricts unfair labour practices, prescribed for regulating and governing cases of strikes, lock-out, lay-off, retrenchment and closure in certain establishments. Consequenses of the aforesaid eventualities are provided towards employees as well as employer.

The Act deals with a) Under Sec. 25Q if industrial Disputes between an employer:employers and employers or between employers and workmen or between workmen and workmen which is connected with the employment or non employment or terms of employment or with the conditions of labour of any person. Such disputes are dealt by the authorities prescribed under the act. Contravens the provision of Sec. 25M (lay off without prior permission of the Government) or Sec. 25-N (Retrenchment without permission etc.) Imprisonment up to one month or fine up to Rs. 1000/b) Under section 26 (2) if any employer commence continues or otherwise acts in furtherance of an illegal lockout. Imprisonment up to one month or fine upto Rs.1000/c) If any person commits

Certain mandates :

1) Mandatory requirement in case of closure of an undertaking :a) 60 days notice to the government for intended closure in Form no. XXIV-B under Sec. 25FFA if employing more than 50 workmen but less than 100 workmen b) Application for prior permission of at least 90 days in form XXIV-C to the Govt. when there are 100 or more workmen during preceding 12 months under S25-O

an unfair labour practice u/s. 25T, the Fifth schedule Imprisonment up to six month or fine up to Rs.1000/-

2) Mandatory provision concerning retrenchment of workmen, compensation to be paid and other conditions: a) worman must have worked for 240 days b) Retrenchment compensation @15 days wages per every completed year to be calculated on last drawn wages inclusive of allowances. c) One month notice or wages in lieu thereof d) Reasons for retrenchment e) Complying with principle of last come first go f) maintenance of seniority list at least 7 days in advance. g) Sending of notice in Form XXIV to the secretary, Government of Maharashtra. 3) Notice of change under S.9A:21 days notice is required to be given by an employer to the workmen about changing the conditions of service as provided in IV schedule in Form XXVII. 4) Prior Permisssion for Lay off : When there are more than 100 workmen during preceding 12 months under S. 25M 5) Prior Permission for retrenchment :When there are more than 100 workmen during preceding 12 months under S. 25N

Employees covered enjoy a modicum of Social Security in the form of an unattachable, unwithdrawable (except in severely restricted circumstances like buying homes, marriage / death in family etc.) financial nest egg to which employees and employers contribute equally throughout the covered persons employment

a) Once the Act applies it continues to apply even if employment strength falls below 20.

Liable to be arrested without warrant. being a congnisable offence Defaults by employer in paying contributions or inspection / administration charge attract imprisonment upto 3 years and fines upto

This sum is payable b) Periodical returns have Rs. 10,000/-. If normally on to be filed under the Act. offence is repeated, retirement or death imprisonment extend to 5 years but not less than 2 years in addition to fine of Rs. 25,000/- For any retrospective application, all dues have to be paid by employer with damages upto 100% of arrears. c) Inspection Note book has to be maintained d) The Employees pension scheme 1995 also applies w.e.f. 16.11.1995

Amount of compensation payable by the employer will be a) Where death results from injury, 50% of monthly Wages x relevant factor or Rs. 80,000/- whichever is more. b) Where permanent total disablement results from injury 60% of monthly Wages x relevant factor or Rs. 90,000/whichever is more c) Relevant factor, which is dependent upon age of employee, ranges from 228.54 to 99.37. If the monthly wages are more than Rs. 4000/- for the purpose of the above calculation it is restricted to Rs. 4000/-

a) Any contract by a worker waiving his right to be compensated under this Act is null and void.

Compensation should be paid early delay beyond 1 month attract interest @ 12% p.a. and penalty of up to 50% of the compensation. Certain other offences attract fine up to Rs. 5,000/-.

b) The intention of the Legislature and the circumstances under which law was enacted is to be seen. It is interpreted in favour of the weak.

c) Notice book is to be maintained. A statement, report and a return is to be filed when applicable d) In case of fatal accident, payment of compensation to the dependent of a workman is to be made through Commissioner of Workmens Compensation

a) The following benefits are provided Sickness benefit, maternity, disablement, dependent, medical, and funeral expenses Rehabilitation allowance Cannot receive 2 benefits for same period.

a) Once the Act applies it continues to apply even if employment strength falls below 20 / 10

Under S.39 (5) (a) if the principal employer does not pay any contribution on the due date :-

b) Free medical b) Register of employees is Payment of simple treatment is to be maintained Form 6 interest @12% p.a. offered. to (Regulation 32) or higher rate till employees and his date of actual family at hospital payment Interest & dispensaries run recoverable as by ESI Corporation arrears of land revenue under section 45-C to 45-I c) During sickness, c) Reports and Returns For varoius offences an employee will have to be filled as : An employer may receive wages as applicable. be punished with per standard fine from Rs. 2000/benefit rate to shown in the table. d) Maternity As per notification dated Rs. 25000/- and / or benefits for 12 11.03.2008 employer imprisonment from 6 weeks of which not employing 40 and more months to 5 years more than 6 weeks employees have to append should be a certificied by C. A in preceding revised format of return. In confinement case of below 40 employees certificate by employer. e) Injury during / On failure by an in course of employer to pay his employment contribution the resulting in temp. / ESIC can recover the permanent same as an arrear of disablement land revenue. entitles covered employee to regular pay. f) Death during the course of employment entitles dependents to regular payment g) One time payment of Rs. 2,500/- to help meet funeral expenses

h) Unemployment allowance to a member who has contributed minimum period of 5 years prior to loss of employment. i) Payable till reemployed elsewhere (maximum 12 months period)

a ) To members - Benificial Legislation Superannuation pension, retiring pension or permanent total disablement pension. b ) To heirs widow or widowers pension, children pension or orphan pension. Guardian pension, Nominee pension As per the scheme provided in the rules.

Imprisonment up to one year. Fine upto Rs. 5000/- or both for the defaulter.

The Act prescribes the minimum rates of wages payable to employees for different scheduled employment, for different class or work and for adults, adolescents, children and apprentices depending upon different localities,

a ) Register of wages to be maintained at workspot in prescribed forms. Such records to be preserved for 3 years from the time of last entry made therein.

Imprisonment up to 5 years and / or fine up to Rs. 10000/- is imposable for contravention or both

the minimum rates of wages payable to employees for different scheduled employment, for different class or b ) Normal working day work and for adults, adolescents, prescribed under the Act is 9 hours. children and apprentices depending upon different localities, for one or more wage periods; viz. by hour, by the day, month or other large period.

5 years and / or fine up to Rs. 10000/- is imposable for contravention or both

The Act provides for

a ) Regular and timely payment of wages. Specified day after last day of the wages period in respect of which wages are payable are : i) 7 days for Railways, Factory, Industrial or other establishment employing less than 1,000 workers

a) Wages to be paid in current coin of currency. Written authorisation of employee necessary for payment by cheque /credit to Bank A/c. b) Deductions cannot exceed 75% of wages for payment to co-op. Societies, and 50% in other cases.

Penalties are from Rs.1000/- to 22,500/- Repeat offences attract 1 to 6 months imprisonment

c) Registers/records in Form No. I, II, III & IV to be kept for 3 years from last entry (If muster role cum wage register in form

ii) 10 days for other No. II as per than persons maharashtra Minimum stated in (I) above wages rule is maintained the above registers are not required to be maintain).

iii) In case of termination of employment, the wages must be paid before the expiry of the second working day from the day of termination b ) Prevents unauthorised deductions being made from wages and charges of arbitrary fines.


Section 1, sub-section ( 6 ): "One thousand six hundred rupees" is amended to "Six thousand five hundred rupees"

a) Right to leave if Obligation and liability more than 3 of employer months @ 5 days for 60 days work and 21 days for 240 days work. 26th Jan, 1st May, 15th Aug. and 2nd Oct. are paid holidays.

a) Contravention of certain provisions of the act - for each offence - fine from Rs.1000 /- to 5000 /-

(Section 35 : Rule II - A ).

a) Change in particular of establishments to be communicated to inspector within 15 days for No. of employees and 30 days for other changes. ( Section 8 : Rule 8 : Sch II : Form E )

b) Continued contravention of Section 7( 1 ) after 10 days of conviction - fine of Rs. 100/every day. c) Contravention of Section 12 - fine of Rs. 1000/- to Rs. 5000/-

b) Leave pay @ b) Closing to be notified equal to average within 10 days to inspector daily wage for days ( Section 9 ) actually worked in 3 months (Section 36). c) Overtime wages c) Register and other @ twice the records ordinery rate for additional work. ( Section 63 ).

d) Employee Contravening Section 18( 2 ) 24, 31 and 65 - fine of Rs. 500/to Rs. 5000/- for each offence.

to be produced on demand e) False entries by employer / manager in Registers etc. fine of Rs.1000/- to Rs. 5000/- if both are liable then aggregate fine not to exceed Rs. 5000/-. (Section 51). f) Commission of offence for which once convicted - fine of Rs.1000/- to Rs.5000/-and for third conviction Rs. 1000/- to Rs. 10,000/-. d) Maintainance of registers g) Penalty for wilful and records and display of obstruction of notice. Inspector Rs. 100/to Rs. 5000/-. (Section 62 : Rule 20 : Form H-N)

e) For termination 30 days notice or wages in lieu of such notice who has completed 1 year or more and 14 days noticeor wage in lieu of such notice who has completed 3 months or more. f) Not to permit employee to work when he is on leave / or on holidays ( Section 65 ). g) Identity cards to employees in residential hotels etc. (Section 25). Commercial establishment can be opened not earlier than 8-30 a.m. and closed not later than 9-30 p.m. Limit of overtime work : The maximum limit for working overtime shall not exceed three hours and the employer may, for the purpose of the work beyond the said overtime hours, engage additional number of employees.