Sr. Manager Hr
Hr Manager
Ramana Kumar
P & A Manager
S K Shukla

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Dear All!!

I am a new member in the Forum! Thus as as Introduction, My name is Rekha and am working with a Private Limited Company as a HR Executive.

I am looking for some assistance / help / advise.

Our company is a Private Limited Company and since its our first India Operation [coz our head office is in New York] thus we have 5 employees but within a span of 2-3 months we are going to add 10-15 more employees.

I am preparing HR Manual for my company, thus I need some help regarding the following :

{1} Can you please tell me what Laws & Labour Laws shall we follow.

[2] What amenities / facilities we have to / are supposed to give to our employees.

You may please keep the following in mind while answering my questions :

[a] Our company is a Private Limited company

[b] We have only 5 employees.

[c] Please give your answer considering India Laws.

I will highly appreciate if someone can help me out in this or if you can please let me know which Govt / Private Organisations can give me this information.



From India, Delhi
if i am not wrong then labour laws come into account only if your employees qualify as workmen - in that case you have to keep in mind
minimum wages act,,payment of wages act,workmens compensation act,payment of gratuity and bonus act etc...
+state labour acts which change according to the state in which you are setup.
hope its of some help

From India, Mumbai
Dear Mr. Shankar,
Thanks for your reply. I spoke to PHD Chamber of commernce and Industry, Mr. Joshi, who is the Labour Advisor, he has advised me that since we have only 5 employee rightnow, thus no law will apply.
I am totally confused rightnow, I have posted my query on the website, given by you but have not yet got any response. Please tell me what is correct? And besides this, since our office is in Noida and it comes under Uttar Pradesh, thus for getting state labour acts information, where shall I call and what do I do to get this info.
I look forward to hearing back from you as soon as possible.
Thanking you,
Best regards,

From India, Delhi
Dear Rekha

It is evident from your statement that presently you are operating from a office and it is not a manufacturing unit. Hence for commercial offices / establishments the following statutory provisions are applicable.

1. Shop and Commercial Establishment Act enacted by your state.

You need to first get your establishment registered with the concerned authorities . Under the provisions of the above act you are required to maintain the following registers

a) Resgister of employee's .

b) Register of wages of employee's.

c) Register of deductions.

d) Register of leave with wages.

e) Register of National Festival holidays and casual & Sick Leave.

2. Registration under professional tax if , the same is applicable in the state. (This is state based statutory provision)

3.When employment strength goes beyond 20 EPF and MP act,1952 comes into force. Under this act you are required to first obtain employer's code from Regional Provident Fund Commissioner of your area.

For obtaining the employer's code you are required to submit the following information with respective office of RPFC

a) Coverage Proforma.

b) List of employee's along with their salaries.

c) Registration under Shop & Commercial Establishment Act.

d) Memorandum & article of Association.

e) Certificate of Incorporation under Companies Act.

f) List of Directors.

g) Bank account details of your company ( CC account Number)

h) Pan Number issued to your company by Itax Authorities.

Employee's covered under the scheme are those persons whose salary( Basic + DA) is of less than Rs.6500.00 per month.

Under the EPF & MP act , you have to deduct 12% of salary ( Basic + DA) from employee's salary and add 12% as employer's share of contribution. The above is to be deposited along with the administrative expenses with SBI or SBOP in Challan form prescribed under the act under these heads.

A/C.No. 1 ( EPF) 12 % of employee deduction + 3.67 % of employers contribution out f 12 % of employer's share.

A/c No. 2 (Administrative charges)1.1 % of salary on which EPF has been deduted.

A/c No.10 ( Family Pesion fund) 8.33% of employer's contribution of total 12 %

( 8.33% + 3.67% = 12%)

A/c No.21 ( Employees deposit Linked Insurance [EDLI] ) 0.5% of salary on which EPF deducted.

A/c No.22 ( Admin.Charges on EDLI ) 0.01% on salary on which EPF deducted.

Monthly returns are to be submitted on Form 12A and 5/10.

Annual returns are on Form 3A and 6A.

4. ESI act is also applicable when employment strength goes beyond 20. Again registration with Regional Director ESI is required to be done for obtaining Employer's code. The information required is

a) Form No.01.

b) List of employee's along with their salaries.

c) Registration under Shop & Commercial Establishment Act.

d) Memorandum & article of Association.

e) Certificate of Incorporation under Companies Act.

f) List of Directors.

g) Bank account details of your company ( CC account Number)

h) Pan Number issued to your company by Itax Authorities.

Emloyees covered under the scheme are persons whose monthly gross salary is of less than Rs.7500.00

Deductions are to be made as 1.75 % of gross salary from employee and 4.75% of gross salary as employer's contribution.

The above amount is to be deposited in challan form prescribed under the act.

Half yearly return on Form 6 is to be submitted with local ESI office.

Declaration forms are to be submitted with local office of ESI within 10 days of new joining.

Before doing all this for ESI applicability please check with the local ESI office whether the ESI scheme is applicable in your are or not because this is a scheme which applicable on areas notified by ESI authorities.

The above are your immediate requirements.

5.Payment of Bonus act is applicable once employment strength is more than 20 employees but you are required to pay Statutory Bonus under the act once you have earned profit from the year in first five year. This act is applicable even after these five years even the establishment has not earned profit from the date of inception.

6. Payment of Gratuity Act is applicable once the employment strength is of more than 10 employee's. Gratuity is payable after an employee put in minimum five years of service.

Amount is to be calculated at rate of 15 days salary for every completed year of service. Salary is last drawn salary at the time of resignation or superannuation or retirement or death etc.

I hope this will help you.


Anil Anand

From India, New Delhi
This is with reference to your query on laws applicable. First of all you need to register with shop & Establishment act. Then on addition others laws. In case of Pf it will be the month you have staff strenght of 20 peoples. ESIC its the month you have 20 eligible people i.e. Salary below Rs. 7500/-. The you need to pay Profession tax irrespective of the numbers and diduct the same for employees and also pay for the company. Next registration with local Labour office when you have more then 20 or more people. The list will keep on increasing once number of people increases but this are the prilimary requirement you need to do.
Amal Shere

From India, Mumbai
Dear all!
Thanks a lot for your valuable responses. But I am bit surprised as I had posted this article long time back [3-4 months back] and I am getting all of your responses rightnow [yesteday only]. Thanks again but I have already taken this information from the Labour Office.
Thanks & regards,

From India, Delhi
Dear Rekha
I fully agree with you that if you do not get the right information at right time , its value gets change. Never mind it happens.
Now the best thing you can do for all of us is that what so ever information you have gathered from your area labour office and what ever is availble on this site. If there exits a difference between the two , let us post that for others.
Objcetive is to spread the knowledge and share your thoughts among the members.
I would love to hear from your side in this regard.
Thanx for your comments.
Anil Anand

From India, New Delhi
To Rekha & Mr. Saumya Shankar
Mr. Saumya is right on the mater of leave policy. Under factories act'1948, one leave is earned on 20 days working basis but you also check out the provisions under Model Standing Orders Act applicable in the state where you run the business. As regard to provision of ESI, limit is OK but it is only applicable when the area where business activities is being carried out is comes under the notified area.
Sant shukla

Hi, Thanks for giving such a valuble info, but this is posted in 2005 , please let me know all the acts are applicable at present? or not? with regards Ramana kumar
From India, Hyderabad
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