Labour Laws is an underpinning for every employee and amount of
people performing their task as an employee, especially the daily wage workers,
without having an inkling of legal underpinning of their functions is in
the primary reason of unawareness of the labour laws has raised the bar of
urgency to know the basic labour rights of an employee.
According to global rights index 2020 India is amongst the top worst
countries in the world for working people.
Every youth and the daily wage laborers who get recruited in a company or an
industrial establishment must know his or her basic labour rights.
Are you sure that you are completely aware of your basic labour rights?
Here are some of the major acts of labour laws that every employee must know:
Written By: Anuja Waykar
The Minimum Wages Act, 1948
- This Act governs the minimum amount of wages or salaries to be paid to
an employee or a worker.
- The minimum wages of an employee depends upon certain factors such as:
- Which State you belong?
- Whether you are skilled or unskilled?
- Which category you belong?
- What is your designation and the industry in which you are working?
- Every employee or worker should be aware about the minimum wages
specified for their State.
Payment Of Wages Act, 1936
- This act aims at dodging avoidable delay of payment of wages without any
sort of deduction from the wages
- Under the act, every company is bound to pay wages or salary to the
employees by 7th of every month.
- The Act also deliberates about the deductions and non- deductions on the
salaries of employees.
- Under this, the employers have no right to make any deduction and they
have to pay the wages each month on time.
- This act secures the employees from un-notified and un-ethical
deductions made by the employer in pay of employees, assuring provisions
relating to the timely payment of wages, payment of dues on termination of
employees, retrenchment, etc.
- To your surprise, even if you are terminated from the services you are
qualified to take your salary for that particular month.
Equal Remuneration Act, 1976
- If the company or an industrial establishment makes recruitment for a
job at a similar position, then it must not discriminate on the grounds of
sex, color or castes.
- This act eradicates discrimination on the grounds of gender with regards
to wages by employers or recruitment of the employees or allotment of
Payment Of Bonus Act, 1965
- This act focusses on protecting the rights of employees relating to the
payment of wages and additional perks.
- It underscores the statutory bonus maintained by the Government for
- The bonus awarded to an employee with respect to his wages is 8.33% of
- the minimum limit set for awarding the bonus on wages is 8.33%. The
percentage of awarding bonus can increase with respect to the profitability
of the company. The maximum bonus including productivity linked bonus that
can be paid in any accounting year shall not exceed 20% of the salary/wage
of an employee.
- Regardless of whether the employee/worker is skilled, unskilled, highly
skilled, they are entitled to get the bonus if they have worked for at least
30 working days in that particular year.
The Employees Provident Fund Act, 1952
- This Act aims at providing a specific contribution amount in terms of
percentage from the employer as employee provident fund towards the social
security of the employee
- The firms or businesses having 20 or more employees working in any
establishment should register with EPFO.
- Act is applicable for every employee who works in a factory or any other
establishment enclosed by the systems and any other than a left out an
employee who is permitted to work for it and who have to become a member of
the fund from the very date of joining the factory.
- The deductions made from the salary of an employee are the savings that
are deposited in the Provident Fund account and the pensions are given on
- The employee contribution to the PF account is the deduction of 12% of
his basic salary every month plus DA that is deposited in PF account and the
employer contribution is 12+1% to the PF account of the employee.
The Maternity Benefit (Amendment) Act, 2017
- This act underlines financial aid and employment security to maternal
mothers during their tenure of employment. The Act defines rules for paid
holidays to mother-to-be employee for taking care of themselves and their
- The amended Act enhanced the duration of paid maternity leave for women
employees from 12 weeks to 26 weeks.
- Paid maternity leave of 12 weeks is also applicable for adoptive
- The Act makes crèche facility compulsory for any company employing 50 or
Code On Wages Act, 2019
- The Code includes four major acts such as The minimum wages Act, Payment
of wages Act, Payment of Bonus Act and Equal Remuneration Act
- This code is a newly established act that had been enacted for the
betterment of around 50 crore workers in India.
- It highlights the provisions of minimum wages and timely payment of
wages to all the workers by disregarding the sectors or the wage ceiling.
- Also, this Code provides a separate definition for workers and
The Employees State Insurance Act, 1948
- The ESI Act provides remedial measures for employees who are sick,
suffering from a disease or got injured during working hours at the workplace.
It acts as a self-financing security for every employee in India.
- It covers family medical insurance and accidental insurance. It also
delivers dependents benefit for the dependent relative in case of death due
to any sort of employment injury.
- Overall 4% of wages are deducted to the ESI out of which minimum deduction
of 0.75% is made from the salary of an employee and employer contribution
amounts to 3.25%.
The Industrial Disputes Act, 1947
- This act intends to provide a recourse to employees and employers in matters
of disputes between both and also provides for the establishment of the
Works Committee that consists of employers and workers to preserve good
relations between them. It’s focus is the procedures for negotiations and
the regulations to be followed before proceeding with employer-employee
disputes to the court of law. The act specifies the minimum time period for
serving the notice for retrenchment or resignation by an employee, the
minimum working hours, holidays and related terms of employment.
Payment Of Gratuity Act, 1972
- If an employee had worked in an establishment or company for a longer
period, then it becomes the responsibility of a company to show their
gratitude in the form of gratuity. The term ‘Gratuity’ means a sum of money
paid to the employee at the end of his/her period of employment. Under the
Act, if an employee had worked in a company for more than five years, then
the company is responsible to award gratuity amount for 15 working days of
every year. If an employee had worked in a company for 9 years, then the
gratuity amount to be paid by the company with respect to 15 working days of
every year shall be the salary of 135 days i.e. salary of 135 days has to be
paid as gratuity amount.
Professional Tax ActThis act is governed under Article 276 of the Constitution of India. This act is
applicable in around 15-16 states of India. The deduction limit of Professional
Tax from the salary of an employee is Rs. 2500 per annum.
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