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Remuneration is an essential part of employment and one of the most important reasons for providing service for an employee is remuneration. The provisions provided under the laws safeguard the interest of an employee and it is important for the employees as well as the employers to be well aware of the labour rights and regulations. In this article, we are discussing the top most important rights of an employee and an employee must be aware in order to protect his/her interest.
1. Timely and Fair Salary:
- The Payment of Wages Act provides a provision pertaining to the payment of timely salary to an employee.
- An employer has the duty to pay the salary amount to an employee after making the requisite applicable mandatory deductions like TDS, provident fund, etc. If this doesn’t happen, the employee can approach the Labour Commissioner or file a civil suit.
- For employees whose salaries are above Rs. 18,000, civil action can be taken against the employer. Hence, an employee is entitled to receive a timely salary at the end of every month.
2. Appropriate Working Hours and Overtime:
- The Minimum Wages Act and Factories Act provides the provision for the applicable working hours and overtime in an Organisation. The Minimum Wages Act, 1948, states, if an employee works more than the normal working hours, the employer shall pay for every hour for which an employee worked overtime.
- The Factory Act has clearly spelt out the number of hours applicable for an adult employee i.e. 48 hours in a week and not more than 9 hours in a day. Whereas if an Employer requests an employee to work more than the working hours, then the employer must compensate an employee in the form of overtime wages.
- Every employee is entitled to have one day of paid rest per week. As well as, employees are entitled to a minimum of one hour of lunch during work hours.
3. Equal pay for equal work:
- Article 39 (d) of our Constitution clearly states the provisions pertaining to equal compensation for every gender.
- Equal pay here means basic salary plus all additional benefits. An employer cannot discriminate between the employees having equivalent qualification and experience. In addition to the above-mentioned provision provided under the Constitution, there is a separate act i.e.
- The Equal Remuneration Act, 1976, stipulates that there must be no gender bias while paying.
4. Minimum Wages:
- The Minimum Wages Act provides the provision for minimum wage proper of the skilled and unskilled workers (The Minimum Wage Act). The Minimum wage is not uniform, the Central and state governments have the power to determine the minimum wages on the basis of the following:
1. Type of work
2. Area
3. Hours of work
4. Living cost
5. Employer’s financial ability to pay
- In the event that an employer pays an amount lower than the minimum wage, the worker reserves the precise to file a civil suit in a court of competent jurisdiction for the breach of the Minimum Wage Act.
5. Employee Provident Fund:
- Under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, employees have the option to transfer a portion of their salary to their Provident Fund Account (EPF), which is transferred directly by the employer in the Provident Funds accounts of such employee.
- The Employees Provident Fund Organization of India (EPFO) manages the provident fund for all salaried employees. Any organization with more than 20 employees has to register with the EPFO. Both the employees and the employer contribute equally- i.e. 12% of the basic salary and dearness allowance to the EPF.
- An employee can only opt out of the scheme at the beginning once an employee deposit money in the PF, he/she cannot exit in between.
6. Maternity Benefit
- The Maternity Benefit Act, 2017 safeguards the interest of pregnant and lactating women employers in India. Female employees on maternity leave are entitled to full salary as if she was working during that period. A female employee is entitled to maternity leave for 26 weeks which can be availed during pregnancy and/or after the delivery.
- There are other scenarios under which a women employee can avail of her Maternity leave as mentioned below:
a) any complications arise during pregnancy,
b) premature birth,
c) miscarriage, or
d) medical termination of pregnancy.
- In addition to the above, even surrogate mothers, adoptive mothers, as well as commissioning mothers can avail maternity leave. Whereas, number of days varies from case to case.
7. Payment of Bonus:
- Government have maintained a statutory bonus for every employee. An employee has a right to receive a bonus from a company.
- Employer Eligibility: According to The Payment of Bonus Act, 1965, any factory or organization which is at least 5 years old and employs 20 or more employees in an accounting year is bound to pay a bonus to its employees.
- Employee Eligibility: Any employee whose salary is Rs. 21,000/- or less per month, and who has worked for more than 30 days in any accounting year is eligible for a bonus.
- The bonus has to be paid within 8 months of completion of an accounting year.
- An employee cannot claim a bonus if he/she terminated from service because of:
• Fraud
• Violent behaviour on the premises of the company
• Stealing or sabotage of any company property
Will be exempt from receiving the bonus under this Act.
8. Payment of Gratuity:
- The Payment of Gratuity Act, 1972 governs the provisions related to the payment of gratuity to an employee.
- If an employee had worked in an establishment or company for a longer period, then an employee shall be eligible for gratuity benefit.
- The minimum year of service for getting gratuity are five years.
- If the employer does not pay the gratuity amount to the employee, employment lawyers can be consulted to take proper legal action.
- It is a lump sum given by the employer to the employee in case of any of the following:
• Retirement
• Resignation
• Inability to carry on work due to disability
• Death (gratuity is paid to the employee’s nominees)
• Superannuation
Whereas, if the employment of an employee is terminated due to misconduct or wilful negligence that caused damages to the employer then the employer reserve the right to forfeit the gratuity amount. Even then, the gratuity shall be forfeited to the extent of the damage caused.
9. Employee State Insurance:
- The Employees State Insurance Act, 1948 governs the provision pertaining to the Employee State Insurance. The Employees State Insurance Fund is responsible for the maintenance of Employees State Insurance Corporation.
- It covers medical and accidental expenses of an employee or their families.
10. Paid Leaves:
- The leave policy for each company has to be framed according to the State legislation and rules. During the course of employment, an employee is entitled to leaves and holidays. Generally, there are 4 types of leaves available to an employee in India:
a) Casual Leave: An employee can take a casual leave in case of an urgent matter like a family emergency or unforeseen personal matter.
b) Paid leave/Earned Leaves: An employee is entitled to paid leaves that can be availed anytime during his/her employment. Privilege leaves can be carried forward for up to three years. If an employee has outstanding earned leaves at the time of leaving a job, then an employee gets compensation against the unused paid leaves.
c) Sick leave: In case of any medical urgency, an employee can avail sick leave.
d) Other leaves: Like Unpaid Leaves, compensatory leaves etc.
- In addition to the above mentioned, it is mandatory for every organisation to grant leave to employees on the national holidays-
(i) Republic Day (Jan 26),
(ii) Independence Day (Aug 15), and
(iii) Gandhi Jayanti (Oct 2).
- The rest of the national and festival holidays are at the discretion of the company.
Conclusion: It is always advisable for an employer to get appropriate employee policies in place in order to avoid any legal action due to unforeseen circumstances. For an employee the employment laws in India lay down several provisions to safeguard the interest of employees and an employee must be aware of all such applicable provision to his/her employment so that he/she can take legal action accordingly. Moreover, it prevents an employee from entering into any one-sided employment contract which protects the employer.
Article By: Ms Bhavya Sharma, a Practising Company Secretary from Delhi. In case you need any assistance for employment policies, rules and rights applicable to organisations or rights related to employment you can contact us at legal@bhavyasharmaandassociates.com or for more details you can visit: www.bhavyasharmaandassociates.com
Disclaimer: Although due care and diligence have been taken in the preparation and uploading of this Article, Bhavya Sharma & Associate shall not be responsible for any loss or damage, resulting from any action taken on the basis of the contents of this Article. Anyone wishing to act on the basis of the material contained herein should do so after cross-checking with the circulars, notifications, applicable acts, press release issued by the concerned department or seek appropriate counsel for their situation.
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