COVID-19 Update : Reliefs to employers consolidated
To keep up with the unprecedented crisis, the Central and State Governments have been issuing notifications and orders on a regular basis. Considering the rapidly evolving situation, we have, for your easy reference, consolidated the important reliefs granted to the employers by the Central Government, as on May 18, 2020, 3 pm (IST).
1. ESI filings relaxed – The Employees’ State Insurance Corporation, on May 18, 2020 , allowed the employers to file the return of Employees’ State Insurance (“ESI”) contribution up to June 11, 2020, for the contribution period from October, 2019 to March, 2020;
2. Reduction of EPF contribution – The Ministry of Labour and Employment, on May 18, 2020, reduced the Employees’ Provident Fund (“EPF”) contributions of both, the employer and employee, from 12% to 10% for three months till July, 2020. This is applicable to all establishments covered under the Employees’ Provident Fund Organization (“EPFO”) except establishments eligible for relief under the Pradhan Mantri Garib Kalyan Yojana guidelines, Central and State public sector enterprises, and establishments owned or under the control of Central or State Government;
3. No penalty for delayed EPF deposits – The EPFO, on May 15, 2020, announced that no proceedings will be initiated for delay in payment of contributions or administrative charges during the lockdown. Delays during the lockdown due to operational or economic reasons will not be treated as default and penal damages will not be levied in such cases;
4. EPF support for businesses – The Finance Minister in her speech, on May 13, 2020, announced that as part of the special economic package, the period for which the Government, under the Pradhan Mantri Garib Kalyan Yojana, was contributing to the EPF, on behalf of the employer and the employee, will be extended for a further 3 months till August, 2020
5. Relief to contractors – In the above speech, it was announced that all central agencies (railways, roads, CPWD) will give an extension of up to 6 months for completion of contractual obligations, including in relation to EPC and concession agreements.
6. Email mechanism by the EPFO for obtaining e-sign – For easing the compliance procedure, the EPFO, on May 6, 2020, introduced a new system, wherein the employers/authorized signatories are allowed to apply through email for a one time approval from Regional Offices to use digital signatures or Aadhar based e-signature for tasks like KYC attestation, transfer claim attestation, etc. Employers can send a scanned copy of their duly signed letter to the concerned regional office via an email;
7. ECR filings made easy – On April 30, 2020, it was notified that the employers can file their EPF electronic challan-cum-return (“ECR”) separately, without simultaneous payment of statutory contributions reported in the ECR. The contributions can be paid after filing the ECR. No penal action will be taken against the employers if the dues are paid within the prescribed time. This decision was taken after considering the economic impact of COVID-19 on the employers;
8. Liability of industries – The Ministry of Home Affairs via letter dated April 23, 2020, to the Chief Secretaries of all States, dispelled the rumors that penal action would be taken against employers, including CEOs or that factories would be sealed or closed for non-compliance, in case a worker tests positive for COVID-19;
9. Wages and CSR – As per the FAQs dated April 10, 2020 on CSR, while wages do not qualify as CSR expenditure, any ex-gratia amount paid to temporary/casual workers/daily wage workers in addition to their wages, specifically for equipping them to fight COVID-19, is admissible towards CSR expenditure as a one-time exception. This would require a declaration by the Board of the company, duly certified by the statutory auditor;
10. Validity of contract licenses – As per the Ministry of Labour and Employment the validity of licenses, under the Contract Labour (Regulation And Abolition) Act, 1970 and the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, due for renewal in the months of March, April and May, 2020, is extended up to May 31, 2020; and
11. Change in working hours in factories – Under the Factories Act, 1948, the state Governments of Gujarat, Madhya Pradesh, and Himachal Pradesh, have increased the per day working hours in a factory, for 3 months from the date in the notifications, to 12 hours per day with 30 minutes of rest after 6 hours of work. In Rajasthan and Uttarakhand, it has been increased, for 3 months from the date of the notification, to 12 and 11 hours per day, respectively. It has been increased to 12 hours per day, with maximum spread over of 13 hours in Maharashtra and Haryana till June 30, 2020 and in Punjab for 3 months from the date of the notification.