By Rupin Chopra and Vibhuti Vasisth
Centre Support Schemes for employers in India
In an attempt to keep up with the present and un-paralleled crisis, both, the States as well as the Centre have been issuing notifications and orders consistently. Considering the given scenario, we have included the significant reliefs granted to the employers by the Centre, as on May 20, 2020.
- Reduction of Employees Provident Fund (“EPF”) contribution– On May 18, 2020, the Ministry of Labour and Employment, introduced an amendment to the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (the “EPF Act”). Vide the Amendment, read with the FAQs issued by the EPFO on May 20, 2020, the statutory rate of PF contributions under the Act, has been reduced to 10 percent from the existing 12%, for the months of May, June and July, 2020. The said reduction is for both, employees as well as the employers. Furthermore, this amendment would be applicable to all such establishments that are covered under the Employees’ Provident Fund Organization (“EPFO”). However, establishments that are eligible for reliefs under the Pradhan Mantri Garib Kalyan Yojana guidelines, the Central and State PSEs, and other establishments that are either owned or controlled by the Central or the State Government would not be included.
- Relaxation of Employee State Insurance (“ESI”) filings– On May 18, 2020, the Employees’ State Insurance Corporation, allowed employers to file their return of ESI contribution up to June 11, 2020, for the contribution period beginning from October, 2019 to March, 2020.
- Delayed EPF deposit would not attract penalty– On May 15, 2020, an announcement by the EPFO was made stating that no proceedings would be initiated as a result of delay in payment of contributions or other administrative charges during the period of lockdown. Such delays would not and are not to be treated as default and penal damages would not follow.
- EPF offers support for businesses– On May 13, 2020, the Finance Minister addressed the nation and announced that the period of the Pradhan Mantri Garib Kalyan Yojana, wherein the Government would be contributing to the EPF, on behalf of both, the employer as well as the employee, would now be extended for an additional 3 months i.e., until August, 2020.
- Certain reliefs to contractors– The Finance Minister, in the above-mentioned address also stated that all central agencies would be given an extension of nearly 6 months so as to complete the contractual obligations, including the ones that are in relation to concession agreements and EPC.
- Email mechanism by the EPFO for obtaining e-sign– On May 06, 2020, in an attempt to ease the compliance procedures, the EPFO introduced a new email mechanism, wherein the employers/authorized signatories would be allowed to apply for a one time approval from the Regional Offices so as to enable use of digital signatures, Aadhar based e-signatures for tasks such as the KYC attestation, and so on. Employers would be required to send a scanned copy of their duly signed letter to the concerned regional office vide email.
- Electronic Challan-cum-Return (“ECR”) filings– It was notified on April 30, 2020, that the employers would be able to file their Employees Provident Fund ECR separately, without having to make simultaneous payments of the statutory contributions reported in such ECR. The contributions could be paid after filing the ECR and no penal action would follow if the dues are paid within the prescribed time.
- Dispelling rumours regarding liability of industries–In a letter dated April 23, 2020, the Ministry of Home Affairs addressed the Chief Secretaries of all States, which intended to dispel all rumours that stated that employers, including CEOs would be penalised or that the factories will be sealed or closed for non-compliances, in case a worker is tested COVID-19 positive.
- State Governments change working hours for factories–The State Governments of Gujarat, Madhya Pradesh, and Himachal Pradesh, have increased the working hours of labours in a factory, for 3 months, to 12 hours per day with a minimum of 30 minutes of rest after 6 hours of continuous work. In Rajasthan it has been increased to 12 hours per day and in Uttarakhand, it has been increased to 11 hours per day, for a period of 3 months. Further, working hours have been increased to 12 hours per day, with maximum extendable period of 13 hours per day in Maharashtra and Haryana till June 30, 2020.