How Should We Respond to a Labor Notice When Our Salary Data Is Managed Remotely?

Hi, we are registered under the Delhi Shop and Establishment Act. Recently, we received a notice from the labor office regarding not producing wages, muster, attendance, and fine register. However, the scenario is that we are in ITES/Financial services where we provide salaries, not wages. Delhi is the regional office, and our headquarters is in Mumbai, so all salary-related data is managed from Mumbai. Employees mark their attendance/leave through an online portal, so we do not have a fully reflectable attendance register. Please advise on how to respond to the labor office in this matter.

If you have been maintaining separate registers under the Delhi Shops and Establishment Act, you should explain this matter to the labor officer and request time for submitting the registers.

Maintaining Traditional Salary Registers in an ITES Firm

In an online environment, everything is maintained digitally. How can an ITES firm stick with traditional salary registers? We have registers for visitors, and office boys/guards are provided by a vendor. The respective vendor bills us for services, and we ensure that everyone receives at least the minimum wage.

Compliance with the Delhi Shops Act

An establishment registered under the Delhi Shops Act needs to comply with the directions given by the said Act regarding the maintenance of records and registers at its office. If the maintenance is centralized, you can obtain copies of attendance and wage details relating to your employees and inform the Labor Office that records are centrally maintained in Mumbai. Though it is doubtful how far they will consider this practice, you can at least show them the evidence that you have no intention of committing a breach of the law.

For the future, discuss with them whether any permission is required from the Delhi Labor Office to maintain records of your employees in Mumbai. I am very doubtful of a favorable consideration since every establishment is separate under the Shops Acts of respective states.

Regards,
B. Saikumar
Mumbai

It is not the case of only IT companies, but almost all are maintaining the registers in soft form. However, there is one difference: IT firms maintain the registers in soft form as a matter of their right, while others follow this practice after obtaining due approval from the labor department. Certainly, you need not keep the registers in hard form, but you can have a computerized system for all your dealings with the employees, provided you take approval from the concerned person of the labor department after submitting a specimen of each register and returns which you generate through the system.

Under the Labor Acts, salary has the same meaning as wages, and all employees who do not possess any managerial rights come under the purview of these Acts. Therefore, just by saying that your company does not pay wages but pays only salaries, or you do not employ workers but only employ professionals, the labor laws will not become inapplicable to you. You have to establish that all are managers and there is nobody to work! At least to the extent of the employees engaged through a contractor (for the service of housekeeping, etc.), you will come under the Labor Acts!

There is nothing wrong with meeting the Labor Officer and discussing the matter in person. If you discuss the matter, it can be solved. However, you should be realistic and not show that nothing in the labor laws is applicable to you just because you employ some professionals only.

Regards,
Madhu.T.K

I have another query. We have security guards and housekeeping staff from a vendor. We ensure that they receive minimum wages as per the law and other benefits like ESI and PF. Do we need a certificate to hire contract labor, considering we have agreements with these vendors for services, and all vendors are registered and licensed for the same? My Mumbai office will provide a proper response from our lawyers for the registration issue. Salaries are disbursed through the Mumbai office via bank transfer, and we are the regional office.

Maintaining Registers and Compliance

Madhu.T.K states, "It is not just IT companies, but almost all maintain registers in soft form. However, the difference lies in the fact that IT firms do so as a right, while others do it after obtaining approval from the labor department. You are not required to maintain hard copies of registers; a computerized system can suffice for all employee dealings provided you obtain approval from the relevant labor department official after submitting samples of each register and return generated through the system.

Understanding Labor Laws

According to labor laws, salary is synonymous with wages, and all non-managerial employees fall under the purview of these laws. Merely claiming that your company pays salaries instead of wages or employs professionals rather than workers does not exempt you from labor laws. It must be established that all employees are managers with no laborers. Particularly concerning employees engaged through contractors for services like housekeeping, you fall under labor laws.

Advisory on Labor Law Compliance

Meeting the Labor Officer and discussing the matter in person is advisable. Realism is key; avoiding denial of applicability of labor laws by classifying employees as professionals only is essential for a productive discussion.

Regards,
Madhu.T.K

Centralized Record Management from Mumbai Office

Do they accept if we say everything is managed from our Mumbai office?

Permitting Computerized Business Processes

In view of the practice to computerize business and administrative processes in the technology-driven modern business, these processes are being recognized as valid within the framework of the Information Technology Act. The Labour Officers will permit it. However, you may have to seek their permission, provided they are satisfied that it largely complies with the requirements of the Delhi Shops Act.

Regards,
B. Saikumar Mumbai

This happened in practice. You can also arrange a meeting with the labor department to resolve the matter. Be careful in documenting everything.

"What rubbish... the case is closed, the employee said he would go to civil court, but now the officer tells me, 'I'd come to your office, you are a big company, the over commissioner sahab also came, we'll give you a certified copy of the proceeding but give us some favor and this favor costs 20k bloody bucks'."

What to do.

Attribution: https://www.citehr.com/458899-help-n...#ixzz2VDrJCUaY