Labour Laws in Bihar

Index:

• Introduction
• Labour laws, Compliances, Applicability in Bihar

Introduction

Labour laws, also known as employment laws, regulate the functioning of establishments and address the legal rights, restrictions, and working conditions of labourers. They also help to maintain the relationship between employer and employees and ensure equality. In this blog post, we will explore the different acts and rules related to labour law compliance in Bihar.

Few rules and acts that cover the law, applicability, and compliance in Bihar, are the Shop and Establishment Act, Payment of Wages Act, Employees State Insurance Act, and the Employee Provident Fund Act, etc..

In the following sections, you will see all the necessary details relating to labour laws in Bihar.

Labour laws, Compliances, Applicability in Bihar

If you are starting or planning to start a business in Bihar, it is important to comply with the state’s labour laws. The labour laws in Bihar are classified under certain acts.

• FACTORIES ACT, 1948

The Factory Act imposes obligations, duties and responsibilities on the factory owner. It regulates working conditions, work hours, leave, holidays, overtime, health, welfare, and safety of factory workers.

Applicability – The act aims to protect workers’ safety, hygiene, and welfare.

• EMPLOYEES’ STATE INSURANCE ACT, 1948

It is a comprehensive social security law that provides medical benefits to employees in case of sickness, maternity, and employment injury, as well as addressing other related matters.

Applicability – This Act applies to all factories and establishments with a specified number of employees in India.

Compliances –

1. Employers need to register their factories or establishments online via the Shram Suvidha Portal to obtain an employer code number.
2. Employers must keep muster roll, wages records, and accounts as required by law.
3. Employers need to report any changes in their business activity, address, ownership, management, or number of employees to ESIC within 15 days of such changes. They must also report accidents or occupational diseases affecting employees within 24 hours of its occurrence.

• PAYMENT OF BONUS ACT, 1965

The act states that employees in certain establishments will receive bonuses based on profits, production, or productivity. The purpose is to ensure a just distribution of surplus profits among employees and promote harmony in the workplace.

Applicability – It applies to all establishments in India.

For more details about payment of bonus click here.

Compliances –

1. Employers are required to register their factories or establishments with the authorities and submit a notice within 30 days of the end of the accounting year. The notice should include details such as the accounting year, the amount of bonus payable, as well as the set-on and set-off amounts.
2. Employers must pay bonuses within 8 months of the accounting year-end or 1 month from award/settlement enforcement. Employee debts can be deducted from bonus payments.
3. Employers need to have their accounts audited and provide the audited balance sheet, profit and loss account, and bonus calculation statement. They must also allow inspectors to examine their books and documents.

• PAYMENT OF WAGES ACT, 1936

The legislation provides comprehensive protection against employers who infringe upon their employees’ payment-related rights, including unauthorised or unnecessary deductions from wages, undue delays in payment, the establishment of a specific wage period (not exceeding the 10th of each month), and the requirement to pay in currency rather than in kind.

Applicability – Provisions and authority vary by state. The Act applies to all employed persons in factories, specified industries, and establishments.

The compliance is listed below;

1. Form V – Submission of Annual Return
2. Yearly, an employer needs to provide a certificate confirming compliance with the Act’s wage provisions.
3. Employees/workers should be paid wages that do not exceed one month.
4. Register of wages paid or payable monthly.
5. Registration for deduction for any loss or damages.
6. Advance made, if any.

• PROFESSIONAL TAX

This tax is imposed by the Bihar state government on individuals involved in any profession, trade, calling, or employment.

Applicability – All salaried individuals, professionals, and self-employed individuals in the applicable state are required to pay this tax. The tax is based on the principle that salaried employees and professionals should make smaller but active contributions towards the development of the state.

PT SLAB of Bihar and its periodicity

• SHOP & ESTABLISHMENTS ACT

The Act is in place to safeguard employee rights, including wages, holidays, maternity leave, record-keeping, and working conditions.

Applicability – It applies to all shops and commercial establishments in areas the Bihar government advises.

Compliance –

1. Register shops and establishments within 90 days (60/30 days in some states) of starting a business, as per the Act.
2. It is essential to maintain a hygienic, safe, and healthy workplace.
3. Maintenance of records and display of notices by businesses under the Shops and Establishment Act.

Leave and working conditions for Shops and Establishments.

• Contract Labour (Regulation and Abolition) Act, 1970

An act regulates the employment of contract labour in certain establishments and provides for its abolition in certain circumstances and for matters connected therewith.

It aims to ensure the welfare and social security of contract workers and to prevent their exploitation by the principal employers or contractors.

Applicability – The act applies to every establishment with 20 or more contract workers, subject to exceptions.

• Employee Provident Funds & Miscellaneous Provisions Act (EPF), 1952

This act establishes provident, pension, and deposit-linked insurance funds for Bihar workers. Its aim is to provide social security and welfare benefits to workers and their dependents for retirement, death, disablement, or any other contingency.

Applicability – The act applies to every factory and establishment in Bihar where 20 or more persons are employed or were employed on any day of the preceding 12 months, subject to some exceptions and exemptions.

EPF Compliance for Employers:

• Registration and Enrollment: Employers must register with the Employees’ Provident Fund Organisation (EPFO) and enroll eligible employees within the specified timeframe.
• Monthly Reporting and Deposits: Employers must report and deposit EPF contributions on a monthly basis through the EPFO’s online portal.
• EPF Audits and Inspections: The EPFO conducts audits and inspections to ensure compliance with EPF regulations. Employers should maintain accurate records and be prepared for such inspections.

Click here to learn more about EPF.

• Building and Other Construction Workers (BOCW) Act, 1996

An act regulates the employment and conditions of service of building and other construction workers in Bihar. The act aims to provide welfare and social security benefits to the workers and their dependents in case of accidents, injuries, illnesses or any other contingency.

Applicability – The act applies to establishments with 10 or more workers in Bihar as building or other construction workers.

Compliances –

1. Employers must register their establishment within 60 days of starting or within 30 days of hiring a construction worker.
2. Contractors employing 20 or more building/construction workers must get a license within 30 days of the act or 15 days of hiring.
3. The act allows employers to levy and collect a maximum of 2% of construction costs to fund worker welfare schemes.

• Inter-State Migrant Workmen (ISMW) Act, 1979

It regulates the employment and conditions of service of migrant workers who are recruited by contractors or agents from one state and employed in another state. The act aims to ensure the welfare and social security of migrant workers and their families and to prevent their exploitation by employers or contractors.

Applicability – The act applies to every establishment in Bihar that employs or has employed 10 or more migrant workers within the past 12 months, subject to certain exceptions and exemptions.

• PAYMENT OF GRATUITY ACT, 1972

It provides for the payment of gratuity to employees who have completed at least 5 years of continuous service in an establishment. The act aims to ensure a fair distribution of the surplus profits of the employers among the employees and to promote industrial peace and harmony.

To get to know more, click here.

Applicability – The act applies to every establishment with 10 or more employees.

Legal Compliances:

All Indian and Multinational Establishments with employees strength 10 or more are compulsory requires to comply with the provisions of the Payment of Gratuity Act, 1972 & The Payment of Gratuity Rules.

FAQs

What is the minimum wage requirement in Bihar?

The Minimum Wages Act establishes minimum wages for various employment categories, ensuring equitable and reasonable remuneration for workers.

Check out our blog on the minimum wages in Bihar.

Does Bihar adhere to women and child labour?

Yes, Bihar adheres to national and international standards to protect the rights of women and children in the workforce.

How can employers ensure compliance with Bihar’s labour laws?

Employers can ensure compliance by staying up-to-date on labour laws, conducting regular audits, and seeking legal advice to address evolving requirements.

Are there any provisions for social security benefits?

Bihar’s labor laws provide social security benefits such as provident fund and employee insurance, ensuring worker well-being.

Where can I find information on recent updates to Bihar’s labour laws?

It is essential to stay up-to-date with the latest developments by regularly checking official government websites and labour department notifications. Seek guidance from legal professionals to ensure compliance.

This is the end of our discussion on labour laws in Bihar. Let us know your other questions and opinions on this topic. Mention below the comment box.