Navigating Labour Laws: What New Start-Ups Need to Know for Compliance and Success

Labour law for new start-ups

Labour law regulations are essential for new start-ups to understand and comply with to ensure a smooth and legally compliant operation. These laws govern various aspects of the employer-employee relationship, including hiring practices, working hours, wages, benefits, and termination procedures. By familiarizing yourself with these regulations, you can protect your business from potential legal issues and build a positive work environment for your employees. It is advisable to seek legal counsel or consult with HR professionals to ensure full compliance with labour laws specific to your region or industry.

Applicability of Labor Laws Based on Employee Count

Different labor enactments have different applicability provisions depending on the number of employees employed. Therefore, if you have just a single employee, certain Acts like the Minimum Wages Act will be applicable to you. You may run without coverage of a particular provision of an Act until your number of employees reaches 100, such as Chapter VB of the Industrial Disputes Act. On the other hand, the applicability of the Payment of Bonus Act depends on the number of employees as well as the year in which the establishment makes profits up to a certain period, for example, five years. This means that different Acts have different coverage parameters.

Just to brief you, I append the following:

Once you employ one person:
- Minimum Wages Act
- Payment of Wages Act
- Equal Remuneration Act
- Employees Compensation Act
- Industrial Disputes Act

Once your number of employees becomes 10:
- Maternity Benefits Act
- ESI Act
- Payment of Gratuity Act
- Setting up of Internal Committee for Prevention of Sexual Harassment at Workplace

Once your number of employees becomes 20:
- EPF & MP Act
- Payment of Bonus Act subject to the provision of infancy protection (5 years)
- Constitution of Grievance Redressal Committee under ID Act

Once your number of employees becomes 50:
- Standing Order Act
- Provisions of Lay off, Notice of retrenchment, closure, etc., of ID Act

Once your number of employees becomes 100:
- Chapter VB of ID Act will become applicable

CLRA Act when your total number of employees engaged through contractor(s) becomes 20
Interstate Migrant Workers (Regulation of Employment and Conditions of Service) Act when the number of migrant workers engaged through a contractor becomes 5