Human Resources is one of the most versatile functions in an organization. From hiring to onboarding to employee engagement, performance management and more, HR oversees various functions highly critical for the functioning of an organization. This makes the role of HR professionals highly complex, as the rules and the requisites vary for each organization and even diversify in terms of global locations and internal departments. However, there are few things about HR laws that remain common irrespective of the industry, geo-location or section/department.
Here are 5 things you must know: HR Law 101.
The regulatory laws for every country instruct that there should be a regular or periodic audit done by organizations to check their wage structure and to ensure that it is in par with the industrial standards or aligns with that of the local labor market. It is important to check that the wages are compliant with existing laws.
It falls under the HR’s responsibility to warrant that employees are paid their wages on time and regularly. There are various laws put down by the regulatory authorities to safeguard the rights of the employees.
There is the Minimum Wages Act, 1948, that instructs that all employers in the organized sector must provide ‘the basic cost of living’ to employee categories specified within the act. Apart from this, there is the Code on Wages Bill, 2019 that further allows the federal government to fix minimum statutory wage for millions of workers. The Payment of Wages Act, 1936 is to ensure timely disbursement of wages while the Equal Remuneration Act, 1976 sets the directive for non-discrimination of pay on the basis of gender. In addition, there are laws also to prevent bonded labor and to prevent abrupt job termination.
While there isn’t a compulsory law that mandates the health security of employees, most organizations have laws to ensure a safe and healthy workplace and various covers in case accidents. The Factories Act, 1948, protects the basic rights and interests of the workers, and the guarantees to provide them with basic amenities like proper sanitation, ventilated workspace, safety for using machinery, etc. The Maternity Benefits (Amendment) Act, 2017, permits 26 weeks of paid leave for women for the first two children, and 12 weeks subsequently. It also instructs that companies employing more than 50 people must provide crèche services. There is also the Employees’ State Insurance Act, 1948 (the ESI Act), a HR law that focuses on providing certain benefits to employees in case of sickness, maternity and employment injury. The Employee’s Compensation Act, 1923, aims to offer financial protection to workmen and their dependents by means of compensation, in case of any accidental injury occurring in or during the course of employment and causing either death or disablement of the worker.
Equity is amongst the most talked about issues in recent years. From balancing the diversity to gender equality, equity laws of an organization focus on creating the right balance.
The Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, is all about inclusion. It regulates the employment of inter-state migrant workmen and aims to provide for the conditions of service and for matters connected therewith. The Equal Remuneration Act, 1976, was put into place to guarantee the payment of equal remuneration to men and women workers and for the prevention of discrimination based on gender, against women in the case of employment and for any instances connected therewith or incidental thereto. This HR law is applicable to every kind of establishment.
4.Prevention of Sexual Harassment
Sexual harassment is an issue that caught a lot of attention post the #MeToo movement, however, HR laws to prevent such incidents have been in place from way earlier.
Sexual Harassment (Prevention, Prohibition and Redressal) Act, 2013, was implemented to provide protection against sexual harassment of women at workplace and prevent such incidents and address the complaints of sexual harassment and for connected matters. The law also directs that an Internal Complaints Committee must be set up by all organizations with more than 10 employees.
In addition to laws that safeguard the basic rights, there are laws that warrant the provision of added benefits to the employees.
Employees Provident Funds and Miscellaneous Provisions Act, 1952, “provides for the institution of provident funds, pension funds, and deposit-linked insurance funds for employees and applies to all establishments employing 20 or more persons or class of persons.” The Employees’ State Insurance Act, 1948 is an act put in place to facilitate employee healthcare. In addition, there is the Labour Welfare Fund Act (of respective States), that focuses on the constitution of the Labour Welfare Fund to promote and carry out various activities necessary for the welfare of labor in the State and to ensure full and appropriate utilization of the Fund.
Payment of Gratuity Act, 1972, is applicable to, “(i) every factory, mine, oilfield, plantation, port and railway company; (ii) every shop or establishment within the meaning of any law, for the time being in force, in relation to shops and establishments in a State, in which 10 or more persons are employed or were employed on any day of the preceding twelve months; and (iii) such other establishments or classes of establishments, in which 10 or more persons are employed or were employed on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.”
Weekly Holiday Act, 1942, instructs that weekly holidays be granted to persons employed in shops, restaurants, and theatres. All institutions, whether public or private, must remain closed and are required to observe three national holidays – Republic Day (January 26), Independence Day (August 15), and Gandhi Jayanti (October 2). The Factories Act, 1948, also sets the decree for the maximum number of work hours and the amount of overtime wages to be paid to labor employed.
The laws mentioned above are the most critical ones in terms of HR functions and hence a 101 to HR laws and the basic things that HR professionals must know. While adopting a few of these laws may depend on the employee’s strength, putting them into place and ensuring compliance depends on the HR team.