PMRPY now incentivizes Employers

Have you yet registered with the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY)? If you haven’t still, rush now to www.pmrpy.gov.in and register before 31 March, 2019.

If you are bringing new employees into the Employee Provident Fund (EPF) and Employee Pension Scheme (EPS) net, then the Government of India pays the employer’s contribution back to the employer. PMRPY is designed to incentivize employers for generating new employment.

Earlier scheme only incentivized employer’s contribution towards EPS whereas the amended scheme incentivizes the contribution towards EPF as well. In the amended scheme, the government is bearing the employer’s contribution of 8.33% towards EPS and 3.67% under EPF. This scheme is applicable from 1 April, 2018. To avail of this scheme, businesses have to register before 31^st March, 2019.

This scheme is applicable to all businesses registered with EPFO and having a Labour Identification Number (LIN) under the Shram Suvidha Portal. To register LIN go to: https://shramsuvidha.gov.in . If you already have a LIN head over to PMRPY portal to register.

From the employee’s end, the eligibility is a valid Aadhar linked UAN and wages below of Rs 15,000.

The amendment to PMRPY was made keeping two key factors in mind. One, to incentivize employers creating employment opportunities. Two, employees will get access to social security benefits of the organized sector.

This is a wonderful scheme but has largely gone unnoticed. If you are eligible to benefit from this scheme, register today.

Rush and register today, if you haven’t already

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National Career Service is here to help you

Ask any business out there for the biggest challenge in terms of Human Resources (HR) they face and 9 out of 10 cases you will hear access to a database of employable skilled people as what keeps them on tenterhooks.

The National Career service (NCS) portal has been operational since July 2015 with the aim of connecting the employers and potential employees.

National Career Service (NCS) project is an initiative launched by the Ministry of Labour and Employment (India)Government of India as a Mission Mode Project for establishing quick and efficient career related services.

Businesses can gain access to entry-level workers to mid management level executives, NCS enables employers to find the right fit for their organization through a country-wide database of over 80 lakh candidates. The employers can search suitable candidates, send interview invites and manage their.

The NCS provides the following services:

• Businesses can get access to job seekers with specific skillset. Job seekers will be able to post their profile and also get career-related guidance or training in a specific trade
• Companies can register to participate in job fairs and career exhibitions
• Job seekers can seek an appointment with experts providing career-related counselling.
• There is also an opportunity for counsellors to bring their services to help the job seekers.

Register on NCS today

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Impact of SC Ruling on Allowance to be included in wages for PF Contribution

In an interesting case, the Supreme Court has ruled that PF contributions have to include any allowances paid to the employees over the basic salary.

The key issue in front of the top court was whether the special allowances paid by an establishment to its employees would fall within the expression “basic wages” under Section 2(b)(ii)<link> read with Section 6 of the Act for computation of deduction towards Provident Fund.

You can access the ruling here.

The Ruling

The SC finally has asserted: “Where the wage is universally, necessarily and ordinarily paid to all across board, such emoluments are basic wages. And where the payment is specially paid only to those who avail of the opportunity is not basic wages.”

A case in point is the overtime allowance. Though it is generally in force in all concerns, is not earned by all employees and thus it is excluded from basic wages. Hence, any payment by way of special incentive for work is not basic wages.

Since, there was plenty of room for misinterpretation, the Supreme Court in its observation has said that all allowances other than HRA and incentives attract PF contribution. There are, however, certain caveats to this.

Who is impacted?

This ruling impact only those domestic workers with basic salary less than Rs 15,000 per month as per para 26A and para 2(f) of the EPF Scheme. An additional check here is that, the employer should be making PF contribution on full basic salary or on minimum Rs 15,000 per month.

By the virtue of this observation, it is implied that international workers as per para 26A of the PF Scheme will not be impacted by this ruling.

For managements, the implications are a choice between paying PF contribution on all the components of the salary/wages up to the limit of Rs 15,000 except HRA or to restructure the salary components.

Since there is no standard for prescribing minimum basic salary/wages by state governments, employers will have to carefully restructure their salary/wages.

Retrospective Compliance

It should be noted that for Employees, the cost of PF contribution will increase which in turn decreases their take home salary. Both employers and employees should note that the judgement leads to retrospective compliance. It is important to understand components which attract and/or outside coverage of PF contribution.

In summary, though the Supreme Court judgment does not discuss splitting of salary, it has clearly ruled out breaking the basic salary into various allowances. Also, if the basic salary is Rs 15,000 and above the judgment will not have any effect.

You can speak to our Payroll management specialists to see if your salary structure requires changes.

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New Maternity rules call for creche facilities in organizations with 50 and more employees

Establishments having 50 or more employees will now have to provide a creche facility, according to the National Creche Guidelines outlined by the Maternity Benefit (Amendment) Act, 2017 (“The Amendment Act”). This is an amendment to the Maternity Benefit Act, 1961 (the MB Act).

The new amendment is applicable to government offices, companies and other organization that come under the ambit of MB Act.

Though the Ministry of Labour and Employment through its November 2017 notification required the respective state governments to frame the rules, the Ministry of Women and Child Development came up with a list of minimum standards and norms to ensure a national standard for the program. Not all states have come up with the framework and those that have haven’t still notified them into an Act.

The key features of the national guidelines are:

1. Eligibility: Mothers whose children are in the age group of 6 months to 6 years
2. Location: Should be located within 50 metres from the place of work
3. Timings: Flexible timings but covering the parent’s work day (8 to 10 hours)
4. Space: Should provide a minimum of 8-12 sq.ft. of space per child; to rest, play and learn
5. Human Resource: For every 30 children, one trained creche in-charge with helpers and one guard
6. Monitoring Committee: A creche monitoring committee needs to be set up comprising parents, creche-in-charge and admin/HR representatives

While the state government frameworks come close to the national guideline, there are deviations in many requirements. There is no clarity whether the establishment should follow the national guideline or the state’s framework.

Ambiguities Galore

From a compliance perspective, it is nightmare for companies with multi-state locations as each state has its own guidelines. The national guideline is only provided as a reference and not the final framework.

The national guideline is also not clear on who will bear the cost of running the creche. We have an official reply in response to an RTI application that the cost is to be borne by the employer. In such a case, there is a question mark on what happens to the creche facility allowance that many companies pay presently. One other pointer for us is the requirement that the cost of creche should be borne by the employer as mandated by the Contract Labour (Regulation and Abolition) Act, 2910, and the Factories Act, 1948.

Another point of ambiguity is whether the employers’ responsibility of compliance be diluted if the establishment gets a third-party specializing in running a creche to setup and manage the creche as mandated.

Follow State Government Rules

While clarity is sought, since the framework is to be finally drawn by the respective state governments, it is recommended to follow the rules framed by the state government and seek clarifications where required. Yes, it does put a burden on the establishment, especially those with multi state locations.

You can contact our specialists in Labour Law across the states in India to get more clarity

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