Payroll and Compliance - The Monthly Chronicle
There is a general impression that is being created that the government will be bringing an amendment to the Payment of Wages Act (1936) to make mandatory the payment of wages to the workers only through cheques or accounts transfers.
This is not the correct position. It has been clarified by the Labour Department that the government proposes to bring an amendment to ‘Section 6 of the Payment of Wages Act, 1936’, which will provide employers the additional option of crediting the wages in the bank account of the employees through account transfer or cheques along with the existing provisions of payment in current coin or currency notes.
The Employees’ Provident Fund Organization (EPFO) has moved towards the next phase in digitalization of processes. Earlier, the EPFO had released a new digitalized process for Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) and Universal Account Number (UAN) 2.0.
On the 20th December, 2016, the Employees’ Provident Fund Organization (EPFO) launched the next version of the Electronic Challan cum Returns (ECR). Consequently, to carry out the migration to the newer version of ECR under unified portal, the portal was made inactive from 17th Dec to 20th Dec, 2016.
The EPFO has reduced the complexity of the existing process by revising the existing ECR file format and the ECR filing portal.
Previously, around 25 fields were required to be filled in order to file an ECR. The new ECR file format contains only 11 fields. It consolidates the existing ‘ECR filling portal’, ‘claim-status’ portal and ‘challan payment portal’ into one unified filing and payment portal.
The ECR (Version 2) will be a completely UAN based format so only the contribution of UAN registered employees can be uploaded.
In ECR (Version 2) the below fields have been omitted –
All ‘arrear related fields’ will now be a part of the new arrear file and all ‘employee information fields’ would be captured at the time of UAN generation. Furthermore, ‘UAN’ and ‘gross wages’ column have been added to the ECR.
Click here to find the ECR (Version 2.0) process flow with screenshots
Click here to go through the ‘Frequently Asked Questions (FAQs) on ECR (Version) 2.0
Employee State Insurance Committee (ESIC) has released the final notification, wherein the wage limit for coverage of an employee under the ESIC has been enhanced from Rs. 15,000 to Rs. 21,000 per month.
Note: The above mentioned changes are applicable from 1st January 2017.
The procedure to be adopted incase this applies to your establishment:
2. Collect Declaration Form (Form 1) from employees that are newly covered under the ESIC scheme due to the enhancement in wages ceiling (Employees that received Rs. 21,000 or less as ‘monthly fixed gross wage’ as of January 2017)
3. Submit Form 1 through the ESIC portal to generate the ESIC number for the new employees and consequently procure the ESIC Challan.
To read the follow up on press release and draft communication please refer to our previous newsletters.
The Employees' Provident Fund Organization (EPFO) is all set to streamline the Provident Fund settlement process for all members who have achieved ‘superannuation’ age. EPFO wants to make the settlement process hassle free, smooth and at a faster rate.
All companies are advised to follow the below instructions released by the EPFO:
Note: To read more on this topic – Click here
The Tamilnadu Labour Department has notified to increase its efficiency with regards to the ‘CLRA registration’ process by 30 days.
How it applies?
Every 'Principal Employer' (PE) who employs twenty or more ‘workmen’ on any day of the preceding twelve months should mandatorily apply for CLRA registration to the Labour Department of their respective states, stating the maximum number of employees to be employed.
Earlier this registration process would take 60 days, whereas the Labour Department has notified to speed-up the process to 30 days. The Tamilnadu Labour Department has notified stating that the ‘Registering Officer’ shall grant ‘Certificate of Registration’ within 30 days (earlier 60 days) from the ‘Date of Receipt’ of application.
In October 2016, a new rule was introduced under the Employee's State Insurance Scheme (ESIC) which stated the following –
In the areas where the ESIC scheme is implemented for the first time, the employer’s contribution and employee’s contribution would be as follows for the initial period of 24 months (from the day it’s been implemented):
Employer: 3% of wages payable to the employee, such sum rounded to next higher rupee.
Employee: 1% of wages payable to employee, such sum rounded to next higher rupee.
However, the ESIC department recently followed up on the previous notification stating the following, "Due to technical reasons, the above said modification in the software is taking sometime".
Thus ESIC department has informed that, employers who are eligible for the reduced rate of contribution should file monthly contribution at the rate of 1.75% for employees and 4.75% for employer but must calculate and pay actual contribution at reduced rate i.e. 1% and 3%.
These employers are advised to inform Regional/Sub Regional offices regarding their eligibility for ‘reduced rate of contribution’. This might further be examined by the Regional/Sub Regional office. Once verified and confirmed, no default action may be taken against such employers for reduced payment.
The online portal for filing PF returns by exempted and relaxed establishments would be unavailable for a (currently) unspecified period due to the revamping of Electronic cum Challan Return (ECR) portal. The EPFO is in the processing of developing a unified portal for Universal Account Number (Version 2.0) and ECR (Version 2.0).
While the portal is active, the functionality of filing of online returns for ‘Exempted Establishments’ is expected to be deployed on the ‘unified portal’ once the development and testing is completed. Till such time, the ‘exempted return’ and MIS Dashboard will not be available.
Therefore, employers of all establishments who are currently exercising ‘exemption’ and maintaining private PF trusts are requested to keep the data ready. This would be the data pertinent to the months in which ‘online return filing’ could not be done due to the non-availability of the portal. On deployment of the ‘return filing’ function, employers are expected to file the same for all such pending months.
Based on the notification published on 10th November, 2014, (under Payment of Bonus Rules), every employer was expected to send an ‘annual return’ in the amended ‘Form D’ to the Inspector. This is so that it reaches the Inspector within 30 days after the expiry of the time-limit specified in 'Section 19' of Payment of Bonus Act, 1965.
Many of the establishments had expressed their difficulty in filling/completing of a tedious, complicated and unrealistic ‘Form D’ and consequently, the issue was taken up with the authorities for its omission. As a result, the Labour Department has replaced the existing ‘Form D’ with the previous ‘Form D’ which was simple and the same needs to be submitted on or before the 1st of February, each year.
To read more, please: Click Here.
The new version of UAN 2.0 has been released and under this new version, the UAN would be allotted upfront and consequently, the ECR can only be filed for employees with UAN numbers. Seeing how this is an on-going process we’ve mentioned some prominent features of the EPFO’s unified portal to support UAN (2.0):
To read further on this topic, refer to our previous newsletters
|Due date||Nature of transaction||Existing rules||Mode|
|10th January 17||Andhra Pradesh & Madhya Pradesh||State-wise regulations||By Challan|
|15thJanuary 17||Gujarat||Gujarat PT regulations||By Challan|
|20th January 17||Karnataka||Karnataka PT regulations||By Challan & Online|
|21st January 17||West Bengal||West Bengal PT regulations||By Challan|
|30th January 17||Assam & Orissa||State-wise regulations||By Challan|
|30th January 17||Maharashtra||Maharashtra PT regulations||Online|
|15th January 17||Remittance of Contribution||EPF & MP Act, 1952||Online|
|15thJanuary 17||Remittance of Contribution (Main code and Sub codes)||ESIC Act, 1948||Online|
|7thJanuary 17||TDS Payment||Income Tax Act, 1961||Online|
|31stJanuary 17||TDS Return||Income Tax Act, 1961||Online|
|Labour Welfare Fund Remittances|
|5thJanuary 17||Kerala (Labour Welfare Fund Act)||Kerala State Labour Welfare Fund||Offline|
Sources: Government Notifications, Circulars, Press releases.
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