New Labour Bill Aims to Ease HR Procedures for SMEs

In a major relief for small firms, the Centre plans to bring in a law that will ease labour procedures for companies employing up to 40 workers. The move will help SMEs — especially IT companies — save on compliance costs.

The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Amendment Bill aims to do away with the cumbersome procedure of maintaining numerous registers and submitting multiple returns, which not just increases the cost but also the legal hassle for small firms, a labour ministry official told FE.

The passage of the amendment Bill will benefit establishments employing up to 40 workers as they need to maintain two registers instead of three, and submit just one return electronically under 16 labour laws.

"We have send the proposal to the law ministry and once they finalise it, the Bill can be put up for cabinet approval," he said, adding the Bill may be introduced in Parliament during the winter session.

The present Act provides that “very small” establishment, employing up to nine workers, can maintain only one register and submit one return every year. Small firms, employing 10-19 workers, have to maintain three registers — one each for wages, attendance and welfare amenities.

They also need to submit one return a year.

"The parliamentary standing committee had earlier proposed to keep the threshhold at 25 workers for a company to get exemptions from multiple registers. But increasing the limit from 20 to 25 will not serve the purpose. So, we have proposed 40 as the limit,” the official added.

The Bill proposes that small companies would be required to maintain only two registers as against three at present, and submit one return. "Registers and records can be maintained in computer, floppy, CD or on other electronic media and return submitted through e-mail," the official said.

Financial Express, New Delhi, 20-08-2012