Labour Law Compliance

Labour laws in India are designed to protect the rights of employees and ensure that organizations maintain fair, safe, and legally compliant workplaces. Every employer – whether a Private Limited Company, LLP, Partnership, or Proprietorship – is required to comply with various labour law regulations depending on the number of employees and nature of business.

Failure to comply with labour laws can result in heavy penalties, fines, and even prosecution.

What are Labour Law Compliances?

Labour law compliances mean timely registration, maintenance of records, payment of contributions, and filing of returns under various labour legislations such as:

Provident Fund (PF)
Employees State Insurance (ESI)
Professional Tax (PT)
Gratuity Act
Bonus Act
Shops & Establishments Act
Minimum Wages Act
Payment of Wages Act
Maternity Benefit Act
Labour Welfare Fund

These compliances ensure social security, workplace safety, and welfare of employees.

Major Labour Law Compliances

1. Provident Fund (PF) Compliance

Applicable if employer has 20 or more employees
Employer & Employee both contribute 12% of basic wages
Due Date: PF payment by 15th of every month; PF return filing by 25th of every month
Penalty: Interest @12% p.a. + Damages up to 25%

2. Employees State Insurance (ESI) Compliance

Applicable if establishment has 10 or more employees (threshold differs by state)
Contribution: Employer 3.25%, Employee 0.75% of gross wages
Due Date: ESI payment by 15th of every month; half-yearly return by 11th May & 11th Nov
Penalty: Interest @12% + damages up to 25%

3. Professional Tax (PT)

Applicable in states like Maharashtra, Karnataka, Telangana, etc.
Deducted from employees’ salaries as per slabs
Due Date: Monthly/Annually (varies by state)
Penalty: ₹5 to ₹20/day + interest

4. Shops & Establishment Act

Mandatory registration for all businesses (depending on state laws)
Requires maintenance of registers, attendance, wages, leave records
Renewal/Annual Returns: State-specific
Penalty: Monetary fine + cancellation of license

5. Payment of Wages Act & Minimum Wages Act

Ensures employees are paid on time and not less than minimum wages fixed by state govt.
Compliance: Timely payment, proper wage registers
Penalty: Fines + imprisonment for repeated default

6. Payment of Bonus Act

Applicable to establishments with 20 or more employees
Employees earning up to ₹21,000/month are eligible
Bonus payable: 8.33% to 20% of salary
Due Date: Within 8 months of financial year end
Penalty: Fine up to ₹20,000 or imprisonment

7. Payment of Gratuity Act

Applicable if establishment has 10 or more employees
Gratuity payable after 5 years of continuous service
Due Date: Within 30 days from becoming payable
Penalty: Interest on delay + fines

8. Maternity Benefit Act

Applicable to establishments with 10+ employees
Provides 26 weeks of paid maternity leave
Compliance: Maintain leave records, payment as per law

9. Labour Welfare Fund (LWF)

Applicable in certain states
Employer & employee contribution towards employee welfare
Due Date: Half-yearly/annual depending on state