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Human Resource Human Resource Department Department

STATUTORY HR/LEGAL STATUTORY HR/LEGAL COMPLIANCESCOMPLIANCES

FOR ANY SUCCESSFUL ORGANISATION, SOUND COMPLIANCE OF VARIOUS LAWS IS VERY IMPORTANT .

WITHOUT PROPER LEGAL FOUNDATION, ORGANISATIONS CAN NOT GROW AND SURVIVE.THEY MAY INVITE SERIOUS PROBLEMS FROM GOVT. AGENCIES, EMPLOYEES ETC.

ESI Provident Fund Profession Tax GratuityLabour Welfare FundThe Maternity Benefit Act

All the employees drawing a gross salary up to Rs. 15000/-in the factories or establishments to which the Act applies shall be insured under this Act.The contribution comprises of employer’s contribution and employee’s contribution at a specified rateContribution rate : 1.75% - (Gross earned salary) -employees

4.75% - (Gross earned salary)-employers Employer is liable to contribute & deduct specified rate of amount and submit it to the Corporation within 21 days of the month.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. 1952, provides for compulsory contributory fund for the future of an employee after his retirement or for his dependents in case of his early death.

Applicable to every organisation engaged in any industry specified in Schedule 1 in which 20 or more persons are employed.

PF is contributed from both the sides @12% of the basic salary subject to a maximum basic of Rs. 6500/-. Out of 12% Employer’s contribution, 8.33% goes towards employees pension scheme and remaining 3.67% goes to the PF account of the employee.

Professional tax or employment tax is a state-based tax. It is allowed as a deduction from the gross income before computing the tax. PT is deducted slab wise. –Rs. 01 to 5000 - NilRs .5001 to 10000- Rs. 175

and above Rs. 10000 - Rs. 200 per month except Rs 300 in the month of February.

Gratuity is payable to an employee under the payment of wages act 1972.

(a) on superannuation, or (b) on retirement or resignation, or (c) on death or disablement due to

accident or disease.

Gratuity is calculated as Basic + DA divided by 26 * No of years of service *15.

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 employed.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 .The Amount of benefit up to the period of expected delivery shall be paid in advance. The balance of Salary due for the subsequent period shall be paid within 48 hours from delivery of child.

Half yearly contribution to be paid to Maharashtra Labour Welfare Fund as on 30th June & 31th Dec. as per Act 1953.Contribution : Employee EmployerSalary up to and Below Rs. 3000 Rs. 6/- Rs. 18/-Salary above Rs. 3000 Rs. 12/- Rs. 12/-

The following steps are required to be taken with immediate effect –

1. IDS Software to be used to replace manual payroll from the Salary of Oct. 2012 onwards.

2. The Salary break up to be revised as per following standard format –

i) Basic Pay - 40% of Gross. ii) HRA - 40% of basic pay iii)Conveyance Allowance – Rs. 800/- Asst. Manager &

above. Rs. 500/- Below Asst.

Manager.

3. Employees Statutory deductions –3. Employees Statutory deductions – i) i) PF –PF – 12% of basic pay subject Maximum Basic

of Rs. 6500/-

ii) ii) ESIC – ESIC – 1.75% of gross earned salary, payable up to Rs. 15000/- Per month.

iii)iii) Professional Tax -Professional Tax - Rs. 01 to 5000 - Nil Rs .5001 to 10000 – Rs. 175 and above Rs. 10000 - Rs. 200 per month

except Rs 300 in the month of February.

iv) iv) Labour Welfare Fund –Labour Welfare Fund – Contribution : (Employee Contribution half

yearly) Salary up to and Below Rs. 3000 - Rs. 6/-

Salary above Rs. 3000 - Rs. 12/-

i)i)PFPF -- 12% of basic pay subject to maximum basic of Rs. 6500/-

ii)ii) ESICESIC –– 4.75% on gross earned salary up to 15000/- Per month.

iii)iii) Labour Welfare Fund –Labour Welfare Fund – Salary up to Rs. 3000 - Rs.

18/- Salary above Rs. 3000 -

Rs.12/-

BENEFITS UNDER STATUTORY BENEFITS UNDER STATUTORY DEDUCTIONSDEDUCTIONS

A) A) Provident Fund : Provident Fund : i) Final withdrawal at the time of leaving

service.ii) Advance for purchase or repair of House,

LIC premium, Marriage of Son/Daughter etc.

iii) Life long pension to the member & to his/her nominees after death.

iv) Insurance benefits on the death of Member while in Service.

v) Interest @ rate 9.5 % on the deposits & the same is exempt from Income Tax.

B) B) ESIC :ESIC :i) Free medical treatment is offered to

employees at ESI Hospitals, Dispensaries.

ii) During sickness of Employees, 7/12 of normal wages will be paid by ESI as compensation .

iii) Maternity Benefits for 12 weeks.iv) Injury during the course of

EMPLOYMENT resulting in temporary /permanent disablement entitles the covered EMPLOYEE to a regular payment to substitute his/her lost wages.

V) Death during the course of EMPLOYMENT entitles dependents to a regular payment.

vi) One time payment of Rs. 1000/- to help meet Funeral Expenses.

vii) Cashless provisions of Super specialty Services through network Hospitals have been introduced.

vii) Issue of smart Cards i.e. ‘Pehchan’ & networking of all ESI Institution for easy access.

PENALTIES FOR NON Compliance OF STATUTARY PENALTIES FOR NON Compliance OF STATUTARY RULES.RULES.

i) i) PF : PF : Any employer who contravenes any of the provisions of the Act is liable to be arrested without any warrant being issued in respect of a cognizable offence. Whereas

defaults by employer in paying contributions or inspections, administration charges attract imprisonment up to 3 years and fines up to Rs. 5,000/-. In case if offence is repeated, imprisonment may be extended to 5 years but not less than 2.

ii) ii) ESIC : ESIC : For employees contribution , imprisonment for 2 years to maximum 5 years and/ or fine of Rs. 25,000/- For employers contribution imprisonment for 6 months to maximum 3 years and / or fine of Rs. 10,000/-

iii)iii)Professional Tax -Professional Tax - Penalty for "late application" for enrolment/registration

[Sec. 5(5)]The prescribed authority may impose penalty of ` 5

for each day of delay in case of an employer for registration and of ` 2 for each day of delay in case of any person for enrolment, after giving a reasonable opportunity of hearing.

Penalty for giving "false information in any application" for enrolment/registration [Sec. 5(6)]

The authority may impose penalty equal to 3 times the tax payable under the Act, after giving hearing opportunity. (Up to 30.4.2002, penalty was restricted to ` 1,000/-).

Penalty for "late filling of returns" by Employer [Sec. 6(3)]

The authority may impose penalty of ` 300 per return.

Penalty for "Non-payment or late payment of tax." by Enrollee/Employer (Sec. 10)

The authority may impose a penalty equal to 10% of the tax due.

Interest on late payment of tax. (Sec. 9)The interest for late payment of tax or

any additional demand of tax raised in assessment is 1.25% p.m. with effect from 1-7-2004 (2% p.m. up to 30-6-2004.)

Interest on refund of excess payment of tax (Sec. 19A)

If any refund is due from any order in respect of

period 1.4.2004 and onwards then interest on refund @ 6% p.a. is receivable by such person entitled to refund, for maximum 18 months.

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!

PRESENTED PRESENTED BY……………….BY……………….

Mr. Ravindra NikamMr. Ravindra NikamAsst. Manager Human Resource