a startup going is not easy. Building a business from scratch never was. For
someone who has never managed or owned a business before it is an uphill task
trying to put in place strategy and logistics. Having to look into the
legalities is another critical aspect, one that few are equipped to handle.
make life for startups a little easier, we put together the basic requirements
covered under the most important central Acts. This should make a great starting
Contract Labour (Regulation & Abolition) Act
The applicability of this Act extends to an
establishment where twenty or more workmen are employed on any day of the
preceding twelve months as contract labour; or to a contractor employing twenty
or more workmen on any day of the preceding twelve months. (This is subject to
change by a notification by the Government allowing 2 months’ notice)
Maharashtra Shops and Establishments Act, 1948
Through the latest amendment applicable to the
whole state of Maharashtra, the Act applies to any establishment employing 10
or more workers. Establishments with under ten employees must submit an online
application with an intimation to the Facilitator within 60 days of
commencement of business or commencement of the Act.
The Payment of Gratuity Act, 1972
The act applies to all factories, mines,
oilfield, plantation, port and railway company. But in case of shops or
establishments other than those stated before, it applies to those
organizations with 10 or more persons are employed on any day of the preceding
12 months. In case of any shop and establishment to which the act applies the
number of employees reduces below 10, it shall continue to be governed by the
act irrespective of the number of employees. Thus no employer can escape
liability under this act by reducing the number of employees.
Maternity Benefit Act, 1961
The Act applies to all factories, mines and
plantations – whether owned by the Government or otherwise; establishments
engaged in equestrian exhibition, acrobatics; shops or establishments wherein 10 or more
persons are employed or were employed on any day of the preceding 12 months.
To claim benefits: The
Act lays down that any women employed, whether directly or through any agency,
for wages in any establishment is eligible to claim maternity benefits if she
is expecting a child and has worked for her employer for at least 80 days in
the 12 months immediately preceding the date of her expected delivery.
Rules are framed by the State Government, where
submissions of plans of any class or description of factories is made to the
Chief Inspector or the State Government:
requiring the previous permission in writing
of the State Government or the Chief Inspector to be obtained for the site on
which the factory is to be situated and for the construction or extension of
any factory or class or description of factories;
requiring for the purpose of
considering applications for such permission the submission of plans and
prescribing the nature of such plans
and specifications and by whom they shall be certified;
requiring the registration and
licensing of factories, or any class or description of factories, and
prescribing the fees payable for such registration and licensing and for the
renewal of licences;
Requiring that no licence shall be
granted or renewed unless the notice specified in section 7 has been given.
If on an application for permission, accompanied
by the plans and specifications sent to the State Government or Chief Inspector
by registered post, no order is communicated to the applicant within three
months from the date on which it is so sent, the permission applied for in the
said application shall be deemed to have been granted.
In cases where a State Government or a Chief
Inspector refuses to grant permission to the site, construction or extension of
a factory or to the registration and licensing of a factory, the applicant may
within thirty days from the date of such refusal, appeal to the Central
Government if the decision appealed for was of the State Government, and to the
State Government in any other case.
Payment of Bonus Act,1965
Payment of Bonus applies where a company is at
least 5 years old, has at least 20 employees, made a profit in that year, and
where the employee’s wages are not more than 21,000 every month.
The Maharashtra Labour Welfare Fund Act, 1953
The provisions of the Act shall is restricted
to establishments employing five or more persons, applicable to employees
except those working in the managerial or supervisory capacity and drawing
wages exceeding Rs.3500/- only per month.
Labour Welfare Fund Act
welfare fund is a statutory contribution managed by individual state
authorities to provide social security to workers. This act has been
implemented only in 15 states out of 34 states including union territories. The
contribution and periodicity of remittance differs with every state. In some
states the periodicity is annual (Andhra Pradesh, Haryana, Karnataka, Tamil
Nadu etc) and in some states it is to be contributed during the month of June
& December (Gujarat, Madhya Pradesh, Maharashtra etc).
Employees' Provident Fund and Miscellaneous Provisions Act, 1952
The Act applies to every establishment engaged
in one or more of the industries specified in Schedule I of the Act or any
activity notified by Central Government in the Official Gazette; which employs 20
or more persons, and cinema theatres employing 5 or more persons. It does not cover co-operative societies employing less
than 50 persons and working without the aid of power. Applicability also extends
where the number of employees falls below 20 at a later date. It includes establishments
under the control of state or central Government and employees who are getting
benefits including contributory P.F. or old age pension as per government rules,
and establishment set up under any central, provincial or state act and the
employees who are getting benefits in the nature of contributory P.F. or old
age pension as per rules. The Act also applies to establishments not satisfying
the above two conditions for coverage and if the employer and majority of the
employees are willing.
Employees' State Insurance Act '1948
Act is applicable to non-seasonal factories employing 10 or more persons. The
Scheme has been extended to shops, hotels, restaurants, cinemas including
preview theatres, road-motor transport undertakings and newspaper
establishments employing 10 or more persons. The Scheme has been extended to
Private Medical and Educational institutions employing 10 or more persons in
certain States and Union Territories.
The Employees’ Compensation Act, 1923
Object of the Act is to provide for the payment of compensation by certain
employers to their employees for injury caused to them by accident while in
employment. If an employee contracts an occupational disease while in
employment, it is also treated under the Act as injury caused by accident. In
case of Maharashtra, The Employees’ Compensation Act is applicable to all shops
Sexual Harassment Act 2013
It is applicable to all establishments less than 10 workers are
Payment of Wages Act 1936
act applies to every person employed in any factory, railway or through
sub-contractor in a railway and a person employed in an Industrial or other
establishment. The state government may extend the provisions to any class of
persons employed in any establishment or class of establishments.
Payment of Minimum Wages Act 1948
The Act applies to people in scheduled
employments or in specified class of work in respect of which minimum wages have
been fixed. No employee can give up by contract or agreement his rights in so
far as it purports to reduce the minimum rates of wages fixed under the Act. Hence, any contract or agreement made less
than the minimum rates of wages fixed shall be null and void.
Apprentice Act 1961
This Act is applicable to the industries and
trades which were informed by the Central Government in the Official Gazette. Almost
all the industries fall under the purview of the act. It may not be applicable
to the special Apprenticeship programs of the government unless informed by the
Central Government in the Official Gazette. The act applies to those categories
of apprenticeship where the practical education is necessary to the trade. Internships
are not covered under this act.