What are the 10 Labour Laws that every employee must know?

29 Jul 2020  Read 17741 Views

Did you know that India is among the 10 worst countries for working people according to the Global Rights Index 2020 which ranks 144 countries on the degree of respect for worker’s rights. Labour laws and reforms have been a controversial topic which no one wants to discuss and the majority of the population of India are not aware about their labour laws especially the daily wage laborers and even sometimes the employees working in huge establishments.

Therefore it is important for the employees as well as the employers to be well aware about the labour rights and regulations. Every youth and the daily wage laborers who get recruited in a company or an industrial establishment must know his or her basic labour rights.

Top 10 labour laws for employees in India

The Minimum Wages Act, EPF Act, Code on Wages Act (inclusive of 4 Acts), Maternity benefit Act, Industrial Disputes Act, Employees State insurance Act and Payment of Gratuity Act are some of the major acts of labour law that every employee must know.

What are the rights of workers enshrined under the Acts?

1.  The Minimum Wages Act, 1948

a.   This Act governs the minimum amount of wages or salaries to be paid to an employee or a worker.

b.  The minimum wages of an employee depends upon certain factors such as;

·         Which State you belong?

·         Whether you are skilled or unskilled?

·         Which category you belong?

·         What are your designation and the industry in which you are working?

c.   Every employee or worker should be aware about the minimum wages specified for their State. 

2.  The Employees Provident Fund Act, 1952

a.   The businesses or firms having 20 or more employees working in any establishment should register with EPFO.

b.  The deductions from the salary are the savings of an employee that are deposited in the Provident Fund account and the pensions are given on retirement.

c.   The employee contribution to the PF account is the deduction of 12% of his basic salary every month plus DA that is deposited in PF account. 

3.  Payment of wages Act, 1936

a.   Under the act, every company is bound to pay wages or salary to the employees by 7th of every month.

b.  The Act also deliberates about the deductions and non- deductions on the salaries of employees.

4.  Equal remuneration Act, 1976

a.   If the company makes recruitment for a job at a similar position, then it must not discriminate on the grounds of sex, color or castes.

b.  It eradicates discrimination on the grounds of gender with regards to wages by employers or recruitment of the employees or allotment of similar works.

c.   Example: If a company hires a female accountant and a male accountant, both having same qualification and experience but salary fixed for male accountant is Rs. 25000 and for female accountant Rs. 20000, this will amount to discrimination under the Act. 

5.  Maternity Benefit (Amendment) Act, 2017

a.   The amended Act enhanced the duration of paid maternity leave for women employees from 12 weeks to 26 weeks.

b.  Women employees having 2 or more surviving children shall have duration of 12 weeks of paid maternity leave.

c.   Paid maternity leave of 12 weeks for adoptive mothers.

d.  The Act makes crèche facility compulsory for any company employing 50 or more employees. 

6.  Payment of Bonus Act, 1965

a.   Government have maintained statutory bonus for every employee. An employee has a right to receive bonus from a company.

b.  The bonus awarded to an employee with respect to his wages is 8.33% of the wages.

c.   8.33% is the minimum limit set for awarding the bonus on wages, the percentage of awarding bonus can increase with respect to the profitability of the company.

7.  Code on wages Act, 2019

The Code on wages Act, 2019 is a newly established act that had been enacted for the betterment of around 50 crore workers in India.

a.   The Code includes four major acts: The minimum wages Act, Payment of wages Act, Payment of Bonus Act and Equal Remuneration Act.

b.  The Code provides for a common provision of minimum wages and timely payment of wages to all the workers by disregarding the sectors or the wage ceiling.

c.   The Code provides a separate definition for workers and employees. 

8.  The Industrial Disputes Act, 1947

a.   The Act provides for the establishment of the Works Committee that consists of employers and workers to preserve good relations between them.

b.  The major focus of this Act is the settlement of any industrial disputes in any industrial establishment. 

9.  The Employees State Insurance Act, 1948

a.   It covers family medical insurance and accidental insurance.

b.  The Employees State Insurance Fund is responsible for the maintenance of Employees State Insurance Corporation.

c.   Minimum deductions from the salaries of an employee; overall 4% of wages are deducted to the ESI. 

10.  Payment of Gratuity Act, 1972

a.   If an employee had worked in an establishment or company for a longer period, then it becomes the responsibility of a company to show their gratitude in the form of gratuity.

b.  Under the Act, if an employee had worked in a company for more than five years, then the company is responsible to award gratuity amount for 15 working days of every year.

c.   For example: If an employee had worked in a company for 8 years, then the gratuity amount to be paid by the company with respect to 15 working days of every year shall be the salary of 120 days i.e. salary of 120 days has to be paid as gratuity amount. 

So these were some of the very important laws in relation to employment in India. These came in force to ensure good working conditions, maternity leaves, fair payment etc.

Labour laws are very controversial and the unawareness of labour laws has raised the bar of urgency to know the basic labour rights of an employee. Are you sure that you are completely aware of your basic labour rights? 

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