What are the labour laws for white collared employees in India

What are the labour laws for white collared employees in India?

Labour laws in India guides for administrative, judicial and federal decisions for building cordial relations between employers and employees. The laws define obligations for establishments based on different criteria such as work environment to employees/factory workers, their remuneration, working hours, the scale or type of industry and establishment.

For many years, the private sector of industry in India enjoyed multiple exemptions from the common labor and employment laws because of which employers took advantage of non-quoted employment terms with their employees, also the employees converted the opportunity of such unguided norms for demanding unreasonable perks from their employers.

But later with a rise in unemployment and exploitation by employers, the provisions stated for labor class later became applicable on all white-collar employees and private employers irrespective of their superiority of level and post grades.

Below are some labor laws in India guiding the rights and duties of private employers and white-collar employees doing non-manual jobs in industries and offices :

Shops and Establishment Act, 1953

Labour laws for private employees became more impeccable when the orally pledged terms of employment took the shape of the employment contract. Employment contracts under the State Shops and Establishment Acts govern for the employment rules like minimum working hours and the payment for overtime working of employees.

As per the Act, the minimum time for an adult worker has been prescribed to be not more than 9 hours a day and 48 hours a week. The act also states that it is the right of the employee to receive double pay from the employer in case he works more than the normal working hours. Further, the act also prescribes for the employees’ rights to receive casual leaves, sick leaves, privilege leaves, and leaves for other purposes.

An adult worker is entitled to get corporate leave for every 20 days, however, a young worker is entitled to receive paid leave for every 15 days (Different for different state acts. Some State acts specify even an employee has a right to take leaves in emergencies during the notice period which cannot be even barred by the employment agreement.

Payment of Wages Act, 1936

Article 39 of the Indian Constitution states that it is the right of every employee and factory worker to get equal pay for equal work. The motive behind placing a law like the Equal Remuneration Act, The Payment Of Wages Act, is to provide fair and timely remuneration.

Certain powers to every private employee by filing a suit against a company or to approach Labour Commissioner has been given explicitly in case inappropriate remuneration or no remuneration is decided for the work done by the employee. Also, a standard wage has been set as a minimum wage to be provided to the employee working in a specified sector.

Payment of Bonus Act, 1965

Other than terms stated in an employment agreement an employer is bound by the Payment of Bonus Act, 1965 to pay a minimum bonus amount to the employee irrespective of loss or profit to the organization –  if the employees draw a salary up to Rs 21,000.

The act directs for the minimum percentage of bonus and the bonus calculation process to be incorporated by the employer for providing the minimum eligible bonus to his employees.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Placed with provisions of the Indian Penal Code, the act imposes penalty and imprisonment of up to 3 years for committing sexual harassment with women at the workplace.

The act applies to every organization where 10 or more employees are employed. As per the law, an internal complaint committee has to be constituted for the aid of the victim against such harassment, the law states that a grievance redressal policy and the mechanism to deal with to be created against the person for committing such harassment.

The Payment Of Gratuity (Amendment) Act, 2018

The payment of Gratuity is the right of an employee who has provided continuous services to an organization for more than 5 years. It is one of the retirement benefits provided to the employee where the total amount inclusive of employer contribution is given to an employee on his/her retirement.

The act states for the minimum gratuity contribution to be made by the employer and the employee.

Employee Provident Fund And Miscellaneous Provisions Act, 1952 (‘EPF & MP Act’)

The act mandates employer organization to pay/contribute a certain amount for employee financial safety as a provident fund (‘PF’).

Employee Provident Fund Organisation(‘EPFO’) is a statutory organization formed under EPF & MP Act,1952 which safeguards the interest of employees and is a common platform for employer and employee wherein both contribute the equal percent in the fund.

Every organization with more than 20 employees must register itself through its representative with the Employee Provident Fund Organization.

The act provides the rights of the employee to receive the provident fund, cancel the scheme just at the beginning or joining of the organization. Both the employer and employee have to contribute 12% of the basic salary (subject to change) towards PF. The amount can be withdrawn by the employee only at certain terms and for certain purpose specified by the EPF organization.


Maternity Benefit Act, 1961

A female employee working in an establishment/factory under the Maternity Benefit Act, 1961  gives the benefit of paid leaves that are to be received from their employer during the maternity period. The act restricts employers to cancel the contract of employment in terms of maternity.

It specifies minimum paid leaves to be provided to female employees and certain rights including the right to not to be employed within 6 weeks of the delivery or miscarriage.

Constitutional Rights

Article 16: For an employer, no employee should be discriminated or to be considered ineligible for employment on grounds of race, religion, caste, sex, place of birth, residence, etc.

Indian Contract Act, 1872

The Act enforces the agreement between employer and employee in terms of employment agreement. The agreement to be enforced must contain all the essentials in terms of Indian Contract Act including compensation, designation, place of work, working hours, rights and obligations of both the employer and employee and the potential confidential information, trade secrets, provident fund deduction, gratuity payments, etc..

The act clearly lays down measures for breach of contract between the employer or the employee.

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