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New rules under Labour Laws to reduce compliance burden for companies

However, success lies in the effective adoption of amendments by state governments at the earliest

Anshul Prakash & Jyoti Kakatkar 

New rules under Labour Laws to reduce compliance burden for companies

On 21 February 2017, the Ministry of Labour and Employment, Government of India (Ministry) has notified the Ease of Compliance to Maintain Registers under various Specified Labour 2017 (Ease of Compliance Rules), which have come into force with effect from the date of its notification. The Central Government has notified the Ease of Compliance with a view to address the concerns foreign investors have in relation to observing bulky compliances under the various labour By reducing the number of registers required to be maintained under certain labour laws, the Central Government hopes to reduce the compliance burden of establishments in their day-to-day business.

Amendment of Central under certain Labour Laws 
In accordance with the Ease of Compliance Rules, an employer will be able to maintain combined registers under the following labour (collectively referred to as the Specified Labour Laws):
  • (i) Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act 1996; 
  • (ii) Contract Labour (Regulation and Abolition) Act 1970; 
  • (iii) Equal Remuneration Act 1976; 
  • (iv) Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service) Act    1979; 
  • (v) Mines Act 1952; 
  • (vi) Minimum Wages Act 1948; 
  • (vii) Payment of Wages Act 1936; 
  • (viii) Sales Promotion Employees (Conditions of Service) Act 1976; and 
  • (ix) Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act 1955
The employer will have to maintain five types of combined registers under the Specified Labour Laws, namely employee register; wage register; register of loan/recoveries; attendance register; and register of rest days/leave account of employees/leave with wages.

Accordingly, pursuant to the Ease of Compliance Rules, certain central enacted under the Specified Labour have been amended to replace existing forms of registers with the combined registers notified under the Ease of Compliance  

The combined registers under the Ease of Compliance may be maintained in electronic form. It is understood that Ministry is simultaneously developing a software for these five combined registers to enable maintaining such registers in digitised form. After development of the software, it is contemplated that the software will be uploaded on the Shram Suvidha Portal of the Ministry to enable establishments to download such software for free.

Effective implementation is the key to success
While these amendments will help in substantially reducing the number of registers that are required to be maintained by establishments regulated by the Specified Labour Laws, it may take some more time before the scheme of simplification contemplated in the Ease of Compliance is adopted by state governments. 

Labour is a subject which falls in the ‘Concurrent List’ of the Constitution of India, where both the central and state governments are competent to legislate, and many states have enacted their own under the Specified Labour Other than those Specified Labour which have no state specific enacted, for example the Equal Remuneration Act 1976, the amendments proposed by the Ease of Compliance shall become applicable to an establishment only when the state in which the establishment is located adopts such proposed amendments. The appropriate state governments should be required to amend the enacted under the Specified Labour in consonance the Ease of Compliance

It is important to note that several states, including Maharashtra, Gujarat, Telangana and Karnataka, have enacted voluntary ‘Self-Certification Schemes’ (Schemes) with a view to simplify and bring about transparency in labour law compliances. Under certain Schemes, upon registration, the specified establishments will have the option of filing combined returns under certain labour specified in the particular scheme. Some of the Schemes, such as the scheme enacted by the state of Telangana, also provide an option of filing combined registers under certain labour While adopting the amendments proposed by the Ease of Compliance Rules, the state will have to ensure that there is no inconsistency between the extant scheme and the Ease of Compliance

The central government has made several efforts in trying to streamline and simplify the number of compliances required to be adhered to under the various labour The notification of the Ease of Compliance is definitely a step in the right direction to help establishments cut costs and efforts and ensure better compliance with labour  

The key to the success of the Ease of Compliance will, however, lie in the effective adoption of amendments by the state governments at the earliest. It is to be seen whether any further clarifications or any instructions to the state governments will be notified by the central government in this regard.
________________________________________________________________________________________________
is the associate partner at Khaitan & Co

is the associate at Khaitan & Co

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New rules under Labour Laws to reduce compliance burden for companies

However, success lies in the effective adoption of amendments by state governments at the earliest

However, success lies in the effective adoption of amendments by state governments at the earliest
On 21 February 2017, the Ministry of Labour and Employment, Government of India (Ministry) has notified the Ease of Compliance to Maintain Registers under various Specified Labour 2017 (Ease of Compliance Rules), which have come into force with effect from the date of its notification. The Central Government has notified the Ease of Compliance with a view to address the concerns foreign investors have in relation to observing bulky compliances under the various labour By reducing the number of registers required to be maintained under certain labour laws, the Central Government hopes to reduce the compliance burden of establishments in their day-to-day business.

Amendment of Central under certain Labour Laws 
In accordance with the Ease of Compliance Rules, an employer will be able to maintain combined registers under the following labour (collectively referred to as the Specified Labour Laws):
  • (i) Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act 1996; 
  • (ii) Contract Labour (Regulation and Abolition) Act 1970; 
  • (iii) Equal Remuneration Act 1976; 
  • (iv) Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service) Act    1979; 
  • (v) Mines Act 1952; 
  • (vi) Minimum Wages Act 1948; 
  • (vii) Payment of Wages Act 1936; 
  • (viii) Sales Promotion Employees (Conditions of Service) Act 1976; and 
  • (ix) Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act 1955
The employer will have to maintain five types of combined registers under the Specified Labour Laws, namely employee register; wage register; register of loan/recoveries; attendance register; and register of rest days/leave account of employees/leave with wages.

Accordingly, pursuant to the Ease of Compliance Rules, certain central enacted under the Specified Labour have been amended to replace existing forms of registers with the combined registers notified under the Ease of Compliance  

The combined registers under the Ease of Compliance may be maintained in electronic form. It is understood that Ministry is simultaneously developing a software for these five combined registers to enable maintaining such registers in digitised form. After development of the software, it is contemplated that the software will be uploaded on the Shram Suvidha Portal of the Ministry to enable establishments to download such software for free.

Effective implementation is the key to success
While these amendments will help in substantially reducing the number of registers that are required to be maintained by establishments regulated by the Specified Labour Laws, it may take some more time before the scheme of simplification contemplated in the Ease of Compliance is adopted by state governments. 

Labour is a subject which falls in the ‘Concurrent List’ of the Constitution of India, where both the central and state governments are competent to legislate, and many states have enacted their own under the Specified Labour Other than those Specified Labour which have no state specific enacted, for example the Equal Remuneration Act 1976, the amendments proposed by the Ease of Compliance shall become applicable to an establishment only when the state in which the establishment is located adopts such proposed amendments. The appropriate state governments should be required to amend the enacted under the Specified Labour in consonance the Ease of Compliance

It is important to note that several states, including Maharashtra, Gujarat, Telangana and Karnataka, have enacted voluntary ‘Self-Certification Schemes’ (Schemes) with a view to simplify and bring about transparency in labour law compliances. Under certain Schemes, upon registration, the specified establishments will have the option of filing combined returns under certain labour specified in the particular scheme. Some of the Schemes, such as the scheme enacted by the state of Telangana, also provide an option of filing combined registers under certain labour While adopting the amendments proposed by the Ease of Compliance Rules, the state will have to ensure that there is no inconsistency between the extant scheme and the Ease of Compliance

The central government has made several efforts in trying to streamline and simplify the number of compliances required to be adhered to under the various labour The notification of the Ease of Compliance is definitely a step in the right direction to help establishments cut costs and efforts and ensure better compliance with labour  

The key to the success of the Ease of Compliance will, however, lie in the effective adoption of amendments by the state governments at the earliest. It is to be seen whether any further clarifications or any instructions to the state governments will be notified by the central government in this regard.
________________________________________________________________________________________________
is the associate partner at Khaitan & Co

is the associate at Khaitan & Co
image
Business Standard
177 22

New rules under Labour Laws to reduce compliance burden for companies

However, success lies in the effective adoption of amendments by state governments at the earliest

On 21 February 2017, the Ministry of Labour and Employment, Government of India (Ministry) has notified the Ease of Compliance to Maintain Registers under various Specified Labour 2017 (Ease of Compliance Rules), which have come into force with effect from the date of its notification. The Central Government has notified the Ease of Compliance with a view to address the concerns foreign investors have in relation to observing bulky compliances under the various labour By reducing the number of registers required to be maintained under certain labour laws, the Central Government hopes to reduce the compliance burden of establishments in their day-to-day business.

Amendment of Central under certain Labour Laws 
In accordance with the Ease of Compliance Rules, an employer will be able to maintain combined registers under the following labour (collectively referred to as the Specified Labour Laws):
  • (i) Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act 1996; 
  • (ii) Contract Labour (Regulation and Abolition) Act 1970; 
  • (iii) Equal Remuneration Act 1976; 
  • (iv) Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service) Act    1979; 
  • (v) Mines Act 1952; 
  • (vi) Minimum Wages Act 1948; 
  • (vii) Payment of Wages Act 1936; 
  • (viii) Sales Promotion Employees (Conditions of Service) Act 1976; and 
  • (ix) Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act 1955
The employer will have to maintain five types of combined registers under the Specified Labour Laws, namely employee register; wage register; register of loan/recoveries; attendance register; and register of rest days/leave account of employees/leave with wages.

Accordingly, pursuant to the Ease of Compliance Rules, certain central enacted under the Specified Labour have been amended to replace existing forms of registers with the combined registers notified under the Ease of Compliance  

The combined registers under the Ease of Compliance may be maintained in electronic form. It is understood that Ministry is simultaneously developing a software for these five combined registers to enable maintaining such registers in digitised form. After development of the software, it is contemplated that the software will be uploaded on the Shram Suvidha Portal of the Ministry to enable establishments to download such software for free.

Effective implementation is the key to success
While these amendments will help in substantially reducing the number of registers that are required to be maintained by establishments regulated by the Specified Labour Laws, it may take some more time before the scheme of simplification contemplated in the Ease of Compliance is adopted by state governments. 

Labour is a subject which falls in the ‘Concurrent List’ of the Constitution of India, where both the central and state governments are competent to legislate, and many states have enacted their own under the Specified Labour Other than those Specified Labour which have no state specific enacted, for example the Equal Remuneration Act 1976, the amendments proposed by the Ease of Compliance shall become applicable to an establishment only when the state in which the establishment is located adopts such proposed amendments. The appropriate state governments should be required to amend the enacted under the Specified Labour in consonance the Ease of Compliance

It is important to note that several states, including Maharashtra, Gujarat, Telangana and Karnataka, have enacted voluntary ‘Self-Certification Schemes’ (Schemes) with a view to simplify and bring about transparency in labour law compliances. Under certain Schemes, upon registration, the specified establishments will have the option of filing combined returns under certain labour specified in the particular scheme. Some of the Schemes, such as the scheme enacted by the state of Telangana, also provide an option of filing combined registers under certain labour While adopting the amendments proposed by the Ease of Compliance Rules, the state will have to ensure that there is no inconsistency between the extant scheme and the Ease of Compliance

The central government has made several efforts in trying to streamline and simplify the number of compliances required to be adhered to under the various labour The notification of the Ease of Compliance is definitely a step in the right direction to help establishments cut costs and efforts and ensure better compliance with labour  

The key to the success of the Ease of Compliance will, however, lie in the effective adoption of amendments by the state governments at the earliest. It is to be seen whether any further clarifications or any instructions to the state governments will be notified by the central government in this regard.
________________________________________________________________________________________________
is the associate partner at Khaitan & Co

is the associate at Khaitan & Co

image
Business Standard
177 22