Concessions to Start-Ups Regarding Labor Laws in India

In order to promote the Start-Up ecosystem in the country and incentivizing the entrepreneurs in setting up new start-up ventures and thus catalyze the creation of employment opportunities through them, the Ministry of Labor & Employment has issued an advisory to the States / UTs / Central Labor Enforcement Agencies for a compliance rule based on self-certification and regulating the inspections under various Labor Laws. It has been suggested that if such start-ups furnish self-declaration for compliance of nine labor laws for the first year from the date of starting the start-up, no inspection under these labor laws, wherever applicable, will take place. The nine labor laws, included in this advisory are:

• The Industrial Disputes Act, 1947;

• The Trade Unions Act, 1926;

• The Building and Other Constructions Workers' (Regulation of Employment and Conditions of Service) Act, 1996;

• The Industrial Employment (Standing Orders) Act, 1946;

• the Inter-State Migrant Workers (Regulation of Employment and Conditions of Service) Act, 1979;

• The Payment of Gratuity Act, 1972;

• The Contract Labor (Regulation and Abolition) Act, 1970;

• The Employees' Provident Funds and Miscellaneous Provisions Act, 1952; and

• The Employees' State Insurance Act, 1948.

From the second year onwards, up to 3 year from the setting up of the units, such start-ups are required to furnish self-certified returns and would be inspected only when acceptable and verifiable complaint of violation is filed in writing and approval has been obtained from the higher authorities.

The advisory to State Governments is not to exempt the start-ups from the ambit of compliance of these Labor Laws but to provide an administrative mechanism to regulate inspection of the Start-Ups under these labor laws, so that start-ups are encouraged to be self-disciplined and adhere to the rule of law. These measures intend to avoid harassment of the entrepreneurs by restricting the discretion and arbitrariness. Punitive action shall, however, be taken whenever there is a violation of these labor laws.

Start-ups not only help the country to develop and grow financially but also provide a lot of job opportunities to unemployed people of the country. The labor opportunities generated also helps the people of the country to gain employment. The Department formed for this in the government has come up with 9 labor laws which need to be looked up in case of violation or complaint filed against the start-up.

Therefore the government is promoting start-ups and alongside generating labor opportunities for unemployed people of the country.



Source by Poonam Jain

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