The labour reforms announced by Prime Minister Narendra Modi will go a long way addressing concerns raised by the industry over the high-handed approach of inspectors. The new labour inspection scheme, which is being seen as a model e-governance initiative of the government, would bring manual intervention with regard to inspections to a minimum and allow technology to dictate what to inspect and how to inspect.
Industry has raised concerns that one of the impediments for investments is the cumbersome processes in the country. This has put the country closer to the bottom of the list of countries on ease of doing business index.
At present 175,000 inspections by 8,000 inspectors take place in the country in a year. This is set to change with new labour inspection scheme.
Under the new scheme, computer would randomly decide where an inspector has to go inspection and not the inspector himself. Moreover, once the inspection is complete, a report has to be filed within 72 hours. And the entire information has also to be put on the website so that owner of premises where inspection was conducted can file a grievance, if required.
At present inspectors have discretionary powers and they have reportedly used this power often to harass owners of industrial units. The plethora of labour laws also does not help the industry.
“Simplification of procedures has been a long standing concern for industry… the launch of the 'labour inspection scheme' will bring in a lot of transparency and accountability,” said Chandrajit Banerjee, director general at Confederation of Indian Industry (CII).
Another step towards providing a business friendly environment to industrialists is the launch of unified labour portal - Shram Suvidha. This will bring four Central government organisations – Employees Provident Fund Organisation (EPFO), Employees State Insurance Corporation (ESIC), Directorate General of Mines Safety (DGMS) and chief labour commissioner under one platform providing single window operations for online registration of units, reporting of inspections, submission of annual returns and redressal of grievances.
Compliance sheet for the industry has also been reduced from 80 pages to a single sheet. This would mean that in one document a company can file returns declaring compliance for 16 central laws. The centre also plans to ask states to provide similar mechanism for taking more than 25 clearances at the state level.
Dedication of Portability through Universal Account Number (UAN) for Employees Provident Fund-16.10.2014
“The minimum pension for employees has been introduced first time so that employees’ pension is not less than Rs. 1000 per month. The wage ceiling has been raised from Rs. 6500 to Rs. 15000 per month to ensure that vulnerable groups are covered under EPF Scheme”.
Under the scheme complete information for approximately 4 crore subscribers of EPF has been centrally compiled and digitized and a UAN has been allotted to all. The UAN is being seeded with Bank account and Aadhar Card and other KYC details for financial inclusion of vulnerable section of society and their unique identification.
Camps are being organized to facilitate opening of bank account and Aadhar card for those subscribers who have no bank account or Aadhar card as on date. This will ensure portability of the Social Security Benefits to the labour of organised sector across the jobs and geographic areas. The EPF account of employee will be now be updated monthly and at the same time he will be informed through sms.
Finally it will ensure that each of the 4 crore or more EPF account holders have direct access to their EPF accounts and will also enable them to consolidate all their previous accounts (approximately Rs 27000 Crore are currently lying with EPFO in inoperative accounts). By 16th October, 2014, approximately 2 crore subscribers will have the benefit of portability through UAN. Subscribers have been informed through sms/email immediately on inauguration.
The minimum pension for employees has been introduced first time so that employees’ pension is not less than Rs. 1000 per month. The wage ceiling has been raised from Rs. 6500 to Rs. 15000 per month to ensure that vulnerable groups are covered under EPF Scheme.
Unclaimed, Rs 22,636 crore in dormant provident fund accounts-04.03.2013-Times of India
MUMBAI: If you thought every rupee was valued in these days of rising prices, think again. A huge sum of Rs 22,636 crore is lying in inoperative accounts with the Employee Provident Fund Organization (EFPO).
These funds are linked to accounts that are lying dormant for more than 36 months and are earning no interest for their account holders. Largely, this is because employees holding these accounts have moved on to new jobs and have not transferred their EPF accounts to that of the new employment.
Earlier, even if an account was not active, interest at the applicable rate accrued on the funds lying in such accounts. (The interest rate fluctuates from year to year; for the current financial year, it will be 8.5%.) However, owing to an amendment, which came into effect from April 1, 2011, no interest is credited to the account of an EPF member from the date on which it becomes an inoperative account.
These funds are linked to accounts that are lying dormant for more than 36 months and are earning no interest for their account holders. Largely, this is because employees holding these accounts have moved on to new jobs and have not transferred their EPF accounts to that of the new employment.
Earlier, even if an account was not active, interest at the applicable rate accrued on the funds lying in such accounts. (The interest rate fluctuates from year to year; for the current financial year, it will be 8.5%.) However, owing to an amendment, which came into effect from April 1, 2011, no interest is credited to the account of an EPF member from the date on which it becomes an inoperative account.
As an inoperative account is defined as one in which no contribution has been made for at least 36 months, from the 37th month onwards no interest is credited by the EPFO against funds in such accounts. Maharashtra with a sum of Rs 7,427 crore lying in inoperative accounts tops this list, followed by Tamil Nadu and Andhra Pradesh with funds aggregating to Rs 2,433 crore and Rs 1,797 crore.
These details, based on the unaudited accounts of the EPFO for the year ended March 31, 2012, were made available to Parliament during the last winter session. In addition to this figure, several large corporate groups in India have their own provident fund trusts, which are not administered by the EPFO. Many such companies also admit to having inoperative accounts, even as they periodically follow up with their ex-employees or their legal heirs.
"On changing a job, the employee should file Form 13 with the new employer. On receipt of a complete and correct form by the EPF authorities, the funds ought to be transferred from the PF account maintained by the old employer to that of the new employer within thirty days. However, many employees fail to follow this process and over a period of time the EPF accounts set up while in their previous employment become inoperative," explains Yatin Pathak, a chartered accountant.
"A large chunk of these inoperative accounts have minuscule deposits of Rs 5,000 or less. Since the employee has already left that particular company, no administrative fee can even be collected from the company concerned. It is the EPFO which has to bear the administrative costs," states an official attached to the ministry of labour. This was perhaps one of the reasons for withdrawing the accrual of interest on inoperative accounts, he adds.
The mandate given to EPF offices across India is to clear applications for transfer within 30 days. However, HR practitioners admit that employees face delays and hassles in transferring their accounts.
These details, based on the unaudited accounts of the EPFO for the year ended March 31, 2012, were made available to Parliament during the last winter session. In addition to this figure, several large corporate groups in India have their own provident fund trusts, which are not administered by the EPFO. Many such companies also admit to having inoperative accounts, even as they periodically follow up with their ex-employees or their legal heirs.
"On changing a job, the employee should file Form 13 with the new employer. On receipt of a complete and correct form by the EPF authorities, the funds ought to be transferred from the PF account maintained by the old employer to that of the new employer within thirty days. However, many employees fail to follow this process and over a period of time the EPF accounts set up while in their previous employment become inoperative," explains Yatin Pathak, a chartered accountant.
"A large chunk of these inoperative accounts have minuscule deposits of Rs 5,000 or less. Since the employee has already left that particular company, no administrative fee can even be collected from the company concerned. It is the EPFO which has to bear the administrative costs," states an official attached to the ministry of labour. This was perhaps one of the reasons for withdrawing the accrual of interest on inoperative accounts, he adds.
The mandate given to EPF offices across India is to clear applications for transfer within 30 days. However, HR practitioners admit that employees face delays and hassles in transferring their accounts.
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