Indian Acts

7/30/2019 Indian Acts

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Employee benefit acts are made to safeguard the rights

of the employees

It deals with the rights and obligations of both the

employers and the employees

For any company, it is important to respect a set of

well-established laws and rules because it provides:


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1. Protection to Employee

2. Protection to Employer

3. Dual Protections

4. Value Recognition

5. Economic Stability


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Contribution by both employer and employee.

Pre- decided percentage of the Basic Salary

Basic Salary computed is Basic salary + DearnessAllowance


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It is a Social Welfare Act.

To provide financial support to the employees.

To provide support to dependents of the employees.


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Where it is applicable?

To whom it is applicable?

Application to be filled

Transfer of funds

Withdrawal of funds


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Gratuity is a lump-sum amount paid to anemployee,

On the basis of the duration of his employment,

On termination of service due to retirement,resignation, death, etc.

It is exempt from tax either fully or partly,depending on the type of employee receiving it.

Gratuity received while still in service is notexempt and is taxable as salary.


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Every factory, mine, oil plantation, port andrailway company

Every shop or establishment if it employs 10 ormore persons in the preceding 1 year.

To any other establishment employing 10 or more

persons.


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Any gratuity received by such person is exempt from tax,

to the extent of the least of the following amounts-

A. Gratuity actually received;

B. Rs. 10,00,000 being the notified limit;

C. Salary last drawn 15 No. of years

completed 26


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Where,

1. Gratuity is equal to 15 days salary (based on last

salary drawn), for every completed year of service(part of year exceeding 6 months is treated as one

year);

2. 26 days refer to the working days per month;

3. Salary includes Basic + D.A., but excludes bonus,commission, other allowances, overtime, etc.


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STEP FIND OUT FORMULA RESULT1. Salary last drawn Basic Pay + D.A.

(last drawn)= A

2. Completed Years of Service Retirement dateless Joining date

= B

3. 15 days salary Years of service Salary 15 26=(A B 16 26)

= C

4. Gratuity exempt Least ofa. 15 days salary

for period ofservice (i.e. C)

b. Rs. 10,00,000c. Gratuity

actuallyreceived


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A covered under the Payment of Gratuity Act, 1972retired on 30-8-2010. At the time of retirement, he

was getting basic salary of Rs. 10,000 p.m. and D.A.

@ 10% of basic salary. He had joined the company on1-4-1993. He was paid gratuity of Rs. 1,25,000.compute the amount of gratuity taxable for the A.Y.2011-2012.


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1. Salary last drawn Basic + D.A. (last drawn)= 10,000 + 1,000

= Rs. 11,000 p.m.

2. Period of service 17 years & 5 months, rounded offto = 17 years

3. 15 days salary 17 years Rs. 11,000 15 26 = Rs. 1,07,885

4. Gratuity exempt Least ofa. 15 days salary= 1,07,885b. Rs. 10,00,000c. Received = Rs. 1,25,000Exempt = Rs. 1,07,885

5. Gratuity taxable Received Less Exempt=Rs. 1,25,000 Rs. 1,07,885 = Rs. 17,115


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Employees' State Insurance Act, 1948

The promulgation of Employees State Insurance

Act, 1948 envisaged an integrated need based socialinsurance scheme that would protect the interest of

workers in contingencies such as sickness,

maternity, temporary or permanent physical

disablement, death due to employment injury

resulting in loss of wages or earning capacity.


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Employees State Insurance Act,1948.

Extends to the whole of India.

It shall come into force on the date as the Central

Government may by notification in the official Gazette.

The Act also guarantees reasonably good medical care.

The Employees State Insurance Scheme is administered by

a Corporate body called the Employees State Insurance

Corporation (ESIC),


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To provide benefits in case of sickness, maternity and

employment injury and to make provisions for related

matters.

As the name suggests, it is basically an insurance

scheme i.e. employee gets benefits if he is sick or

disabled.


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Six kinds of benefits are provided under the Act:

Sickness Benefit

Maternity Benefit Disablement Benefit

Dependents Benefit

Medical Benefits &

Funeral Expenses


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The ESI Act, (1948) applies to the followingcategories of factories and establishments in theimplemented areas:-

(1)To all the factories or establishments employing20 or more employees.

(2)Every employee drawing wages more thanRs.10,000/-per month.

(3) The appropriate Government State orCentral is empowered to extend the provisions of theESI Act to various classes of establishments,industrial, commercial, agricultural or otherwise innature.


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Seasonal factories engaged exclusively in any of the

activities like cotton ginning, cotton or jute

pressing, manufacturing coffee, indigo, rubber etc. Mines

Railway running sheds

Govt. factories or establishments & Indian Naval,

Military or Air Force.


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Apayment (maternity allowance) made to a pregnant

women who usually works but does not qualify for

statutory pay.


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It aims to regulate the employment of women incertain periods before and after childbirth

To provide for maternity benefits including maternityleave ,wages , bonus , nursing breaks etc.

To protect the dignity of motherhood and the dignity

of a new person by providing for full and healthymaintenance of the women and her child at thisimportant time when she is not working.


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Every factory , mine or plantation (including those

belonging to government) and

To every shop or establishment wherein 10 or more

people are employed.


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Must actually work for 80 days in 12 monthsimmediately preceding her date of delivery.

Should intimate the employer seven weeks before herdelivery date about the leave period.

Can take advance payment for 6 week leave before

delivery.

Can take payment for 6 week leave after child birthwithin 48 hours after submitting the proof.


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CASH BENEFITS

84 days leave with pay.

A medical bonus of

Rs.1,000-(As Per latestamendment)

An additional leave withpay up to one month.

In case of miscarriage Sixweeks leave with averagepay.

Light work for 10 weeks (6 weeks plus 1 month)

before delivery. 2 Nursing breaks of 15

minutes until the childbecomes 15 months old.

No discharge ordismissal while onmaternity leave.

NON CASH BENEFITS


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Any discharge or dismissal of a women during pregnancy

for absence ids entitled to maternity benefit/medical

bonus.

In case of gross misconduct the employer in written can

communicate about depriving such benefit.

Within 60 days from date of deprivation of maternity

benefit, any women can appeal to the authority prescribed

by law.


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Imprisonment with minimum period of 3 months to

maximum of1 year.

Fine from Rs. 2000 to Rs. 5000.


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