ARTICLE
16 January 2025

Employment Law Corner - November - December 2024

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IndusLaw

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INDUSLAW is a multi-speciality Indian law firm, advising a wide range of international and domestic clients from Fortune 500 companies to start-ups, and government and regulatory bodies.
We welcome you to the November-December 2024 Edition of IndusLaw's Employment Corner Bulletin, where we discuss the key statutory and judicial updates for the period between November and December...
India Employment and HR

We welcome you to the November-December 2024 Edition of IndusLaw's Employment Corner Bulletin, where we discuss the key statutory and judicial updates for the period between November and December of 2024. This year has brought significant changes in the realm of legislative developments and evolving employment practices. In this regard, we also discuss some of the more critical statutory developments and prominent HR practices that employers and HR leaders should take into consideration while strategizing on their organizational practices and compliances for 2025. We have also dedicated a section in the Bulletin to highlight important D&I and HR initiatives being implemented by employers across India.

STATUTORY UPDATES

CENTRAL

Employees' Provident Fund Organisation sets January 15, 2025, as Deadline for UAN Activation and Aadhaar-Bank Account Seeding under Employment Linked Incentive Scheme

The Employees Provident Fund Organisation ("EPFO") has issued instructions dated November 22, 2024, regarding the Employment Linked Incentive Scheme ("ELI Scheme") announced in India's Union Budget 2024-25. The ELI Scheme introduces groundbreaking programs to boost formal employment in India. It includes a direct benefit transfer of one-month salary (in 3 equal monthly instalments) by the Government to first-time joiners in all formal sectors, with the maximum benefit amount capped at INR 15,000, subject to further clarifications by the Government.

The EPFO has made it mandatory for every subscriber to have an activated Universal Account Number ("UAN") linked with Aadhaar, and their bank accounts seeded with Aadhaar. Employers are directed to ensure compliance by January 15, 2025, particularly for employees who joined in financial year 2023-24. The UAN activation process can be completed through Aadhaar-based One Time Password verification, enabling employees to access various online services including their Provident Fund ("PF") passbook viewing, claiming submissions, and real-time tracking. The Aadhaar-bank account seeding requirement is essential as the ELI Scheme benefits will be disbursed through direct benefit transfer.

The EPFO has emphasized that these measures are part of its ongoing commitment to improving the delivery of social security benefits and enhancing service accessibility through its online portal to all members.

Employees' Provident Fund Organisation revises Guidelines for Physical Claims Settlement without Aadhaar Seeding – Guidance for International Worker Claims

The EPFO has issued instructions dated November 29, 2024, clarifying the settlement of physical claims for specific categories of members who are unable to seed and authenticate their Aadhaar, a challenging matter for members who are not comfortable with electronic dealings.

The instructions also address concerns raised by EPFO field offices regarding claim settlements for International Workers ("IW"), overseas migrants, and citizens of Nepal and Bhutan. While UAN generation remains mandatory, these specified categories are now exempt from Aadhaar seeding requirements, an important aspect for Indian employers engaging foreign employees. These instructions allow for alternative identification documents such as (i) passports for IWs who have left India without obtaining an Aadhaar and Indian workers who permanently migrated to a foreign country and subsequently obtained their citizenship; and (ii) Citizenship Identification Certificates for Nepalese and Bhutanese workers.

For settlements exceeding INR 5 lakh, additional identity verification by employers is required. The directive emphasizes that claims must undergo proper due diligence, including bank account verification, and requires officer-in-charge approval through e-office documentation. This change aims to facilitate prompt settlement of genuine claims while maintaining proper verification protocols for members who cannot obtain Aadhaar due to their specific circumstances.

Central Government amends Employees' Deposit-Linked Insurance Scheme, 1976 to revise Death Benefit Calculations

The Ministry of Labour and Employment amended the Employees' Deposit-Linked Insurance Scheme, 1976 ("EDLI Scheme") via notification dated November 18, 2024, which is deemed effective from April 28, 2024.

The amendment modifies paragraph 22 of the EDLI Scheme, revising the calculation of death benefits for eligible employees. To be eligible, employees must have been in continuous employment for 12 months preceding their death. As per the amendment, eligible beneficiaries will now receive an amount equal to 35 times the deceased employee's average monthly wages (as compared to the previously allowed 30 times) drawn during the 12 months prior to their death (capped at INR 15,000), plus 50% of such deceased employee's average provident fund balance from the same period, subject to a ceiling of INR 1,75,000. The EDLI Scheme ensures a minimum assurance benefit of INR 2.5 lakhs while capping the maximum benefit at INR 7 lakhs. For parttime employees working in multiple establishments, the benefit will be calculated based on their aggregate wages across all qualifying workplaces.

Employees' State Insurance Corporation issues Strict Directive on Online Submission of Cash Benefit Claims

The Employee State Insurance Corporation ("ESIC") has issued a significant directive dated November 5, 2024, regarding the submission of cash benefit claims by covered employees, following a review of claim submissions from April to August 2024. Despite previous instructions to facilitate online claims through the Insured Person Portal ("IP Portal"), many branch offices continue to process claims physically rather than encouraging insured persons to use the online platform. The directive specifically addresses 2 key issues: the continued creation of claims by branch offices instead of insured persons using the portal, and branch managers' practice of requesting physical copies of documentation even when claims are submitted online. The ESIC has mandated immediate action to eliminate offline claim submissions and has instructed branch managers to stop requesting physical copies of documents already submitted through the IP Portal. The directive emphasizes that while verification can be done directly with dispensaries or hospitals when needed, benefit payments should not be delayed by requiring hard copies of certificates, an initiative that will assist claimants.

STATE

Gurugram District issues Comprehensive Compliance Directives and Reporting Requirements under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 – Changes from Requirements under the POSH Act

The Haryana government has issued significant directives regarding compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act") for Gurugram (Gurgaon). Through a notification dated November 4, 2024, the District Officer of Gurugram revised the deadline for filing annual reports on workplace sexual harassment cases to February 28th of each year, changed from the previously notified date of April 30th of each year. Both government and non-government organizations must comply with this new timeline, with a penalty of INR 50,000 for employers who fail to submit their reports by the deadline. Organizations are required to use the compliance checklist available on www.gurugram.gov.in.

Subsequently, on December 12, 2024, the Additional Deputy Commissioner of Gurugram issued a comprehensive compliance directive under the POSH Act, applicable to all organizations, companies, schools, and hospitals in Gurugram. The directive mandates that organizations submit their POSH Act annual reports covering the period from January 1 to December 31, 2024. The compliance framework encompasses 7 key areas: organizational policies, workplace notices, employee awareness programs, Internal Committee ("IC") formation, complaint handling procedures, reporting mechanisms, and annual report submissions. Organizations must demonstrate their compliance by publishing internal POSH policies, forming ICs with properly qualified members, conducting regular awareness workshops, and displaying notices in multiple languages. They must also maintain detailed records of complaints received, resolved, and pending, along with documentation of awareness programs conducted throughout the year. This is a supplement to the POSH Act provisions in relation to the annual report, which should contain the details relating to (i) number of complaints of sexual harassment received in the year; (ii) number of complaints disposed off during the year; (iii) number of complaints pending for more than ninety days (along with reasons for delay); (iv) number of workshop or awareness programmes against sexual harassment carried out; and (v) nature of action taken by employer or District Officer. The directive also emphasizes that non-compliance with any of these provisions will result in penalties.

Karnataka Government announces Deadline for Contributions under the Karnataka Labour Welfare Fund Act, 1965

The Karnataka Government has announced an important update to the Karnataka Labour Welfare Fund's contributions for calendar year 2024 vide a press note dated December 24, 2024. Under the Karnataka Labour Welfare Fund Act, 1965 ("KLWF Act"), employers are required to remit a total contribution of INR 60 per employee (INR 40 from the employer, INR 20 from the employee) by January 15, 2025. This mandate applies to various establishments including factories, IT/BT companies with over 50 workers, plantations, motor services, and organizations registered under the Karnataka Shops and Commercial Establishment Act, 1961. All payments must be made exclusively through the official online portal at www.klwb.karnataka.gov.in.

Employers should note that delayed payments will incur penalties, with interest rates of 12% per annum for the first 3 months, escalating to 18% thereafter. Additionally, non-compliant establishments may face inspections from the Welfare Commissioner and Labour Department officers, potentially leading to legal proceedings.

The Government of Karnataka Seeks to Amend the Karnataka Labour Welfare Fund Act, 1965

The Karnataka Government on December 12, 2024, has tabled a bill seeking to amend the KLWF Act. Under the KLWF Act, for every employee in an establishment, contributions must be paid to the Karnataka Labour Welfare Board, which includes contributions from the employer, employee and the State Government which forms part of the fund. The proposed changes to the contribution rates are as follows: the employer's contribution will increase from INR 40 to INR 100, the employee's contribution will increase from INR 20 to INR 50, and the state government's contribution will also increase from INR 20 to INR 50.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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