The Indian government was quick to react as COVID-19 cases began to show up in India and immediately locked down the country. In parallel, the government introduced the first set of employment law relief measures which were the following article on People Matters as Employment Law Relief for Employers in India: Part I
Since then, India witnessed additional changes with respect to continuing lockdown as the COVID-19 curve surged obstinately. Some of the recent important employment law relief measures are as follows:
- In pursuance of the Finance Minister’s announcement, the Employees’ Provident Fund Organisation (EPFO) has declared a scheme under Pradhan Mantri Garib Kalyan Yojana. As per this scheme, the government shall pay all wage earners employed in businesses having less than 100 employees and with at least 90% employees earning less than INR 15,000 (approx. USD 200) 24% of their monthly wages (as employer’s and employee’s Provident Fund contribution) per month in their Provident Fund accounts, for three months from April 2020. Employers are required to upload a single ECR with respect to eligible and ineligible employees and submit a declaration with respect to eligible employees certifying compliance with the eligibility criteria required under the scheme.
- The EPFO also extended the last date of payment of provident fund contribution for wage month of March 2020 from April 16, 2020, to May 15, 2020.
- The EPFO has also reportedly allowed employers to file monthly Electronic Challan cum Returns (ECR) without the simultaneous obligation to pay contributions, allowing employers to make payment of contributions within the extended time, without any penalty thereto.
- The Employees’ State Insurance Corporation has further extended the last date for payment of ESI contributions for the wage month of February 2020 until May 15, 2020, giving an effective relaxation for 75 days.
- The Ministry of Labour and Employment has extended the validity of licenses necessary for employers employing contract workers and inter-state migrant workers under the Contract Labour (Regulation and Abolition) Act, 1970 and the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 respectively, whose license renewal dates fall in March-May 2020 until May 31, 2020.
- The Karnataka state government has extended the due date for payment of Professional Tax for employees for March 2020 from April 20, 2020, to May 20, 2020, along with the due date for payment of enrollment tax from April 30, 2020, to May 30, 2020.
- The Maharashtra labor department has extended the last date of submission of Unified Annual Returns under the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 to July 31, 2020.
- The Gujarat labor and employment department has allowed exemption to employers in Gujarat employing contract workers whose license renewal dates fall in March-May 2020 from the requirement of applying for renewal of a license under Contract Labour (Regulation and Abolition) Act, 1970 until May 15, 2020.
- In order to facilitate Micro, small and medium scale enterprises (MSMEs) retain their workers, the Haryana government has formulated the “Haryana MSME revival Interest Benefit Scheme” whereby, all the MSME units working in Haryana on or before March 15, 2020, will be eligible for 100% interest benefit on loans availed for payment of wages to employees or other expenses, up to a maximum limit of INR 20000 (USD 264) per employee on interest payable to the concerned bank/financial institution (up to 8% per annum) subject to certain conditions.
- In order to enable recovery from lock-down related production lag, certain state labor departments have allowed factory employers an exemption from various provisions under the Factories Act, 1948 for a limited period, including:
- Gujarat has exempted factories from the application of the provisions related to daily and weekly working hour limits and spread-over limits for adult workers, and extended working hour limits in factories to 12 hours per day per worker, with a weekly limit of 72 hours from April 20, 2020, to July 19, 2020.
- Punjab has similarly extended the daily working hour limit for individual adult workers in factories to 12 hours from April 20, 2020, to July 20, 2020.
- Himachal Pradesh has also allowed similar exemption to factories from daily working hours, interval of res) and spread-over hours, allowing extended limit of 12 hours of daily working for adult workers effective from April 20, 2020, until July 20, 2020.
- Rajasthan has also notified exemption for factories from provisions of working hours of adult workers, allowing a maximum of 12 hours of working per day for all essential goods manufacturing and distribution factories which is effective until July 11, 2020.
- Madhya Pradesh has also notified exemption for factories in non-containment zones from the provisions under Factories Act, 1948 relating to weekly hours, daily hours, intervals for rest, etc. of adult workers allowing workers in factories to work for 12 hours a day and 72 hours in a week, which is effective from April 24, 2020, till July 24, 2020.
- Haryana has also notified exemption of all factories from Factories Act, 1948 provisions related to weekly hours, daily hours of adult workers allowing the employment of workers in factories for up to 12 hours a day subject to other compliances, which is effective till June 30, 2020.
- Uttarakhand has also notified similar exemption for factories from provisions under Factories Act, 1948 pertaining to daily and weekly working hours of adult workers allowing factory employers to have two 11 hour shifts in a day with a 1-hour gap in between and with maximum overtime limit of 3 hours per day per worker, subject to other compliances, which is effective from April 28, 2020, to July 28, 2020.
- The Maharashtra government announced one-time financial assistance of INR 2,000 (approx. USD 25) to 1.2 million construction workers through direct benefit transfer.
- The Pension Fund Regulatory and Development Authority of India (PFRDA) has allowed employees who are subscribers to the National Pension Scheme (NPS), to make partial withdrawals towards the treatment of the subscriber and his/her dependents in case of COVID-19 infection.
The Indian Ministry of Home Affairs, in its comprehensive and consolidated Order dated April 15, 2020, allowed commencement of several activities in areas outside containment zones demarcated by the local authorities. While other APAC countries such as Japan, Indonesia, South Korea, Singapore, Australia, New Zealand introduced wage-subsidy and other employment support schemes to aid employers who are continuing to pay employees during the economic slowdown, India is yet to provide sufficient succor to employers struggling to adapt to the changed reality and lockdown orders owing to COVID-19. Moreover, several government advisories and orders directing employers to continue payment of full wages to their employees have left business owners in the lurch, with fixed costs and menial-income due to lockdown.
Although relief has been given through exemption from various compliance requirements, material financial support is still lacking from the Indian government. Substantial measures such as providing wage subsidy are currently unavailable, especially if the government wants to ensure that employers continue to pay wages and do not terminate the employment of their workers.
With reports of labor authorities issuing notices to employers for any adverse actions taken by employers due to COVID-19 cost-optimization measures and litigation having commenced including in the Supreme Court, it may soon result in catastrophic consequences for our economy. The government needs to actively step in to protect businesses, several of which are facing significant cash-flow problems and maybe pushed towards bankruptcy.
It remains to be seen whether the Indian government will provide stilts to the COVID-19 infected backbone of our labor-intensive market or let it wilt in the storm.