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Labour Laws in India Change by States and Here is What It Means for Companies

The pandemic had resulted in drastic changes in the entire landscape of work and this extends to labour laws. Throughout the world, labour laws have been amended to help the government, companies, and workers meet the changes in the working environment brought on by lockdowns, decrease in demand, and increasing health concerns. Many factors have influenced this decision, and this includes the state of economic affairs before COVID-19 became a household name across the globe.

Labour Law in India

In India, there are four categories of laws that govern work. They are broken down into Conditions of Work, Wages and Remuneration, Social Security, and Employment Security, and Industrial Relations. There are over 112 acts, 470+ rules, 200 state laws, and nearly 50 central laws. In this case, different states have made separate amendments to suit their working conditions.

What complications can this lead to?

This is a complex issue as there are supporters and critics on both sides of the fence. Indias labour laws have been criticised by many for being inflexible, poorly implemented, and consisting of huge amounts of tedious paperwork to execute. But at the same time, relaxing these laws can mean many negative things, too, such as workers rights violations. There are also many potential complications for companies. According to experts, the main issues lie in decreasing employment, reducing efficiency, discouraging new investments, and weakening the economy.

    • Issues with Labour Law compliance

There are also a host of issues regarding complying with these new labour laws. With so many laws being amended and in various ways according to state, companies may find themselves confused about how to proceed. It also increases the compliance complexity, paperwork, and efforts for companies.

    • Confusion for companies with offices at multiple locations

Many companies have offices in multiple states. With different states adopting new labour laws, compliance could be tricky. Ensuring all the branches are adhering to their specific laws could pose challenges. Companies must be diligent to have a list of each states specific amendments and send out notifications to the concerned authorities to ensure compliance. They could also display messages on their notice boards in a language understood by most of the labour force to inform them of compliance related matters.

    • Challenges because of remote working

Monitoring activities, such as phone calls, becomes tougher when employees are working remotely. Remote working also adds to the complexity when it comes to maintaining confidentiality, handling insider information, and training efforts. Its also much more difficult for compliance officers to oversee that different offices are meeting the expected requirements. While in the past, officers could just drop in at the workplace to observe, they now depend on phone calls, emails, and other forms of communication to employees that are now in their homes and remote workspaces. These communications can easily be avoided by the concerned party. Such a situation calls for compliance officers to become more assertive and stricter.

    • Challenges with respect to gig employees

There is now a new breed of employee is the gig worker. The government allows fixed-term contracts for a limited period in particular sectors. These cannot be used to avoid normal employment. But this will lead to an increase in hiring contractual labour in which has a unique set of challenges. These include gig worker rights, due diligence, liability issues, etc. There is also a new industrial relations code that lays down a basic framework for fixed-term employees. Contractual labour has a unique set of issues related to ensuring they are compliant. First of all, gig workers have an ever-evolving set of laws that govern them. Compliance officers will have to be diligent in staying up to date and ensuring each rule is followed. Secondly, gig employees require communication and training if they are engaged in activities that are subject to regulatory compliance requirements or company procedures. Failing to do so can put the company at risk in the long run.

Compliance Technology to The Rescue

Its not a secret that technology can help systematically streamline vast amounts of data, and this holds for information related to compliance.Core Integras Ctrl F system is Indias largest Compliance Solution Platform for Labour Law Act, Rules, Minimum Wages, government communication, and more. It has several features that help companies manage documents, calculate wages, conduct internal audits, understand social security benefits, stay updated with compliance news, and more.