Foreword

The startup ecosystem in India is a vital contributor to the country's economy, driving innovation and creating millions of jobs. The
Confederation of Indian Industry has projected that startups are likely to contribute USD 1 trillion to the Indian economy by the 2030
financial year, creating 30 million jobs1.

We at Treelife have seen an increasingly common issue pop up on legal due diligence exercises conducted on startups looking for funding:
non-compliance with applicable labour laws in India. A common theme in such findings is that many times startups are simply unaware
that a particular legislation is applicable to them. This lack of awareness is only fuelled by the complex framework of labour laws in India with
40 Central labour enactments2, and approximately 200 State legislations, imposing varying requirements on employers across India,
creating regulatory difficulty to navigate for a fledgling startup working from the ground up.

We at Treelife have put together this handbook to give startups an overview of the compliances critical to them, including a brief overview
of the upcoming Labour Codes pending notification by the Government of India.

If you have any doubts or need further information, please reach out to us at [email protected].

Meet the Team behind the Guide

1
Report can be downloaded here: https://www.cii.in/PublicationDetail.aspx?enc=W/X35YPhbqgJv/eIySkPIDaCso6QIVovD78y3sHqc7s=
2
As per the website of Ministry of Labour and Employment

2
Table of Contents

1. Introduction 4
2. Navigating the Compliances applicable to a Startup - Central Legislations 6
3. Navigating the Compliances applicable to a Startup - State Legislations 8
4. Navigating the Statutory minimum leaves for Startups 11
5. Special Compliance options available for Startups 12
6. Challenges, Practical Solutions and an Overview of the Labour Codes 13
7. Conclusion 15
8. Frequently Asked Questions 16
9. Get in touch with us 18

3
Introduction
Labour legislations in India find their basis in the Constitution, through the fundamental rights (specifically, the Rights to Equality3; to
Freedom4; and against Exploitation5) and the directive principles of state policy (contained in Articles 386, 397, 418, 429, and 4310). It is
therefore critical for startups to understand that labour laws in India are fundamentally welfare legislations, imposing significant compliance
responsibility on employers as a result of a socialist outlook seeking to protect the dignity of human labour.

India follows a federal system of governance, with the broad framework of labour laws as below:

3
Articles 14 to 18 of the Constitution.
4
Articles 19 to 22 of the Constitution.
5
Articles 23 and 24 of the Constitution.
6
Responsibility of the State to secure a social order for the promotion of welfare of the people, in which justice - social, economic and political, shall inform all institutions, and
inequalities in income, status, facilities and opportunities are eliminated to the extent possible.
7
Principles to be followed by the State.
8
Responsibility of the State to secure the right to work, education and public assistance in case of unemployment, old age, sickness and disablements and in other cases of
undeserved want.
9
Responsibility of the State to make provision for securing just and humane conditions of work and maternity relief.
10
Responsibility of the State to secure living wage and decent conditions of work to all workers and promotion of cottage industries in rural areas.

4
The labour law framework in India is intricate, often leading to confusion due to the dual roles of the central and state governments. For
example, while central laws like the Industrial Employment (Standing Orders) Act, 1946, dictate terms of employment, state-specific Shops
and Establishments Acts also prescribe similar conditions but with variations, necessitating detailed assessments to determine applicable
compliances.

Moreover, the enforcement of many central laws is managed by state authorities, leading to inconsistencies in application across different
states. For instance, the enforcement of the Payment of Gratuity Act, 1972 varies by state, leading to discrepancies in legal compliance
across regions. For example, in Karnataka, Telangana, and Andhra Pradesh, specific gratuity requirements are mandatory, but not in other
states.

Navigating the Indian labour law landscape also requires recognition that words used interchangeably in
common parlance may not hold the same meaning in law.

The landscape's complexity is exacerbated by the legal definitions of terms like "workman" and "employee" (often used interchangeably in
common parlance) which differ significantly across laws and affect the applicability of protections and remedies. For instance, where the
Minimum Wages Act, 1948 specifically identifies employment which would be protected by the provisions of the act, the Industrial Disputes
Act, 1947 prescribes exclusionary criteria to identify persons who cannot seek remedy from the labour courts under the act.

To address these structural issues, the Government of India has proposed a complete overhaul of the labour laws in India. The
proposed Labour Codes11 are the product of a long drawn process initiated around 201612, and aiming to simplify and reduce ambiguities in
law enforcement across states, making it easier for startups to understand and comply with labour regulations, thereby fostering a more
straightforward regulatory environment conducive to business operations and growth.

11
Addressed in Pages 13-15 of this Report; currently pending notification by the Government.
12
Ministry of Labour and Employment press release dated 07 December 2016 here: https://pib.gov.in/newsite/PrintRelease.aspx?relid=155024

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Navigating the Compliances applicable to a Startup - Central Legislations
The first step to identifying whether or not a specific labour law would be applicable to an employer would be to determine whether the
thresholds under the law have been satisfied along with penalties thereof.

Table 1: Central Labour Legislations

S. No. Legislation Name Applicability Compliance Penalties

(a) Filing annual return; and Punishable with fine

Payment of Wages Employees whose wages do not exceed
1. (b) maintaining registers of: (i) wages; (ii) fines for between INR 1,500/-
Act, 1936 INR 25,000/- per month.
damages; (iii) deductions for damages; and (iv) advances. to INR 7,500/-.

(a) allotment of Provident Fund (“PF”) Code;

Employees
(b) providing challans to regional ESI office and filing
Provident Funds
monthly returns evidencing payment of contributions to
and Miscellaneous
PF since employer’s incorporation (within 15 days of the
Provisions Act, Applicable to every establishment in Imprisonment up to 1
close of each month);
2. 1952 read with the which 20 or more persons are employed year or fine of INR
(c) filing returns with respect to International Workers if
Employees in an accounting year. 5,000/- or both.
any employed;
Provident Fund
(d) filing return of ownership;
Scheme 1952 (“PF
(e) maintaining registers under the PF Scheme; and
Scheme”)
(f) enrollment of employees in the PF Scheme.

Applicable in any premises where either: (a) Registration required within 15 days of the Act
(i) 10 or more persons are employed & in becoming applicable;
any part of which a manufacturing (b) providing challans evidencing monthly contributions Imprisonment
Employees State
process is carried out with the aid of towards insurance to regional ESI office; extending up to 2
3. Insurance Act
power; or (ii) 20 or more persons are (c) filing half-yearly and annual returns; years and fine up to
1948
employed & in any part of which a (d) filing monthly declarations with a list of new iNR 5,000/-.
manufacturing process is carried out employees (if any); and maintaining a register of
without the aid of power. employees.

6
 S. No. Legislation Name Applicability Compliance Penalties

(a) issuing notice of opening to governmental authority Fine up to INR

(within 30 days of the Act becoming applicable); 10,000/- for failure to
(b) display notice at or near the main entrance of the make premium
establishment; payments/
Payment of Applicable where 10 or more persons are (c) obtain declaration of nomination from employees; contributions;
4.
Gratuity Act, 1972 employed. (d) display abstract of Act and rules (prescribed form) at
or near the main entrance of the establishment; and Imprisonment up to 6
(e) obtain mandatory insurance for gratuity obligation or months or fine up to
obtain approval for a gratuity fund from governmental INR 10,000/- or both
authority13. for other violations.

Equal Imprisonment up to 1
Maintaining register of workers and remuneration in
5. Remuneration Act, Applicable to all establishments. month or fine up to
prescribed format.
1976 INR 10,000/- or both.

Prevention of
Sexual
Harassment of (a) If minimum 10 employees, constitution of Internal
Women at Complaints Committee (“ICC”);
Required if any female employees and/ or Fine up to INR
6. Workplace (b) display order constituting ICC at premises;
consultants and/ or interns are employed. 50,000/-.
(Prevention (c) formulate anti-sexual harassment policy; and
Prohibition and (d) ICC to file annual returns.
Redressal) Act,
2013

(a) Maintaining registers in prescribed format (electronic Imprisonment up to 6

Payment of Bonus Required where 20 or more persons are
7. records permitted); and months or fine up to
Act, 1975 employed in one accounting year.
(b) filing annual return before February 1 of each year. INR 1,000/- or both.

13
Please note that although the Central legislation makes this mandatory, this has only been enforced in some states by way of a state notification; for instance, it is mandatory
in Karnataka, but not Maharashtra as of June 2024.

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 S. No. Legislation Name Applicability Compliance Penalties

(a) Maintaining muster rolls of benefits provided;

Rights of Persons Imprisonment up to 6
(b) maintaining records of employees with disabilities; and
8. with Disabilities Applicable to all establishments. months or fine or INR
(c) publishing equal opportunity policy (website
Act, 2016 10,000/- or both.
publication permitted).

(a) Maintaining register of maternity benefits14;

Applicable (basis each state’s Shops and Imprisonment up to 3
Maternity Benefits (b) displaying abstracts in prescribed format; and
9. Establishments Act) if 10 or more persons months or fine up to
Act, 1961 (c) providing creche facilities if more than 50 persons are
are/were employed in the last 12 months. INR 500 or both.
employed.

Navigating the Compliances applicable to a Startup - State Legislations

Table 2: State Labour Legislations - Karnataka

S. No. Legislation Name Applicability Compliances Penalties

(a) Registration, if more than 10 employees, with

renewal every 5 years; and Fine which may extend up to INR 1,000/-
Karnataka Shops and
(b) maintaining registers; and in case of a continuing contravention,
1. Commercial All organisations.
(c) filing annual return; and further fine of up to INR 2,000/- for every
Establishments Act, 1961
(d) displaying registration certificate and name day the contravention continues.
board (in Kannada and English) prominently.

Karnataka Tax on
Applicable to all (a) Obtaining registration for the establishment;
Professions, Trades, Penalty not exceeding 50% of tax amount
2. establishments in and
Callings and Employments due, in addition to interest payable.
Karnataka. (b) filing monthly returns.
Act, 1976

14
Check out Treelife’s blog post on this here: https://treelife.in/legal/importance-applicability-of-labour-laws-for-startups/

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Table 3: State Labour Legislations - Maharashtra

S. No. Legislation Name Applicability Compliances Penalties

(a) Registration, if more than 10 employees; and

(b) maintaining registers (electronic records
permitted); Fine which may extend up to INR
Maharashtra Shops and
1. All organisations. (c) filing annual return within 2 months of year 1,00,000/- but subject to a maximum cap
Establishment Act, 1948
ending December 31; and of INR 2,000 per worker.
(d) displaying registration certificate and name
board (in Marathi and English) prominently.

Any organisation with

Maharashtra Labour Fine of INR 500/- or imprisonment up to 3
2. 05 or more Obtain registration.
Welfare Fund Act, 1953 months or both.
employees.

Maharashtra State Tax on Employers are liable to pay simple interest

Applicable to all (a) Filing of prescribed forms for enrollment; and
3. Profession, Trades, Callings @ 1.25% of the tax payable for each
establishments. (b) filing monthly returns.
and Employments Act, 1975 month for which tax remains unpaid.

Table 4: State Labour Legislations - Delhi

S. No. Legislation Name Applicability Compliances Penalties

(a) Registration, within 90 days of act becoming applicable;

Fine of minimum INR 25/- and up to
(b) young persons & women not allowed to work between 9 pm
INR 250/-.
and 7 am during the summer season and 8 pm and 8 am in the
Delhi Shops and All commercial
winter season;
1. Establishment Act, establishments In case of failure to maintain records in
(c) maintaining registers of overtime, leave record and wages;
1954 and shops15. the prescribed manner, imprisonment
(d) displaying registration certificate and name board (in Hindi &
up to 3 months or fine of minimum INR
English) prominently; & issuing letters of appointment to
50/- and up to INR 250/- or both.
employees.

15
The Supreme Court in Chief Commissioner, Delhi v Federation of Indian Chambers of Commerce and Industry 1974 AIR 1527 held that applicability of the act primarily
required satisfaction of two elements: (a) the “shop” or “commercial establishment” in question must be the premise; and (b) there must be some trade or profession carried
on in that premise.

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Table 5: State Labour Legislations - Gujarat

S. No. Legislation Name Applicability Compliances Penalties

(a) Registration if more than 10 employees, within 60 days of

the Act becoming applicable;
Fine which may extend up to INR
Gujarat Shops and (b) Self declaration through prescribed web portal if less than
1,00,000/- but subject to a
1. Establishment Act, All organisations16. 10 employees, within 60 days from Act becoming applicable;
maximum cap of INR 2,000 per
2019 (c) maintaining registers (electronic records permitted); and
worker.
(d) filing annual return within 1 month of year ending December
31.

Employers are liable to pay simple

Gujarat State Tax on
interest @ 1.5% of the tax payable
Profession, Trades, Applicable to all (a) Obtaining registration;
for each month for which tax
2. Callings and establishments in (b) obtaining certificate of enrollment; and
remains unpaid in addition to
Employments Act, Gujarat. (c) filing monthly returns.
penalty not exceeding 50% of tax
1976
amount due.

16
The provisions of this Act are not applicable to IT/ITES establishments with respect to: (a) Section 12 (fixing of minimum hours of work); and (b) Section 14 (spread-over of
hours of work), for a period of 2 years, further to Gujarat state government notification dated 05 February 2024, available here:
https://www.datocms-assets.com/40521/1709879571-restriction-on-applicability-of-section-12-and-section-14-on-it-related-services-and-financial-services-for-2-years-
in-gujarat.pdf

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Navigating the Statutory minimum leaves for Startups
There are two types of “holidays” typically available to all employees: (i) paid leaves (including annual/privilege/earned leaves, sick leaves
and casual leaves); and (ii) national and festival holidays. These holidays are in addition to statutorily prescribed time off (such as for
maternity benefits) and can vary across states. Table 6 below captures a brief overview of what the mandated leave policy would look like
for Maharashtra, Karnataka, Delhi and Gujarat:

Table 6: Statutory minimum leaves by state

Type of Leave Maharashtra Karnataka Delhi Gujarat

12 Weeks17
Maternity benefits
(of which no more than 6 weeks must be taken before the estimated date of delivery).

12 days (if period of work 1 day for every 20 days of work

15 days (12 months of 1 day for every 20 days of
is 240 days or more); or by an adult; or
Annual Leave/ Privilege continuous service); or work (if period of work is
Leave/ Earned Leave 5 days (4 months of 240 days in a calendar
5 days (if period of work 1 day for every 15 days of work
continuous service). year)
is 3 months or less) by a young person.

12 days, for every 12 months of

Sick Leave Not addressed 7 days
service completed.
12 days
Casual Leave 8 days Not addressed. 7 days

8 days, including 26 8 days, including 26 January, 15 8 days, including 26

Festivals and National 7 days, including 26 January,
January, 1 May, 15 August August, 2 October and 1 January, 1 May, 15 August
Holidays 15 August, and 2 October.
and 2 October November and 2 October

When any election to Lok Sabha or State Legislative Assembly is held, employees whose names are on the rolls of the
Polling Day
relevant constituency are required to be given a day of paid leave in order to enable them to exercise their franchise to vote.

17
Available only to those female employees who have completed at least 80 consecutive working days prior to applying for the leave benefits.

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Special Compliance options available for Startups
In order to reduce the burden of paperwork required to be maintained by employers with respect to certain legislations, startups can refer
to the following laws that are often overlooked on account of their obscurity:

(a) the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988 - This Act: (i)
categorises establishments into “very small” and “small”; and (ii) is applicable to returns and registers required (among others) under
the Payment of Wages Act, 1936; Minimum Wages Act, 1948; and Equal Remuneration Act, 1976 (“Exempted Acts”):

Compliance Small Establishments Very Small Establishments Penalty18

1019-19 persons employed in Maximum 9 employees in the last 12

Threshold Fine which may extend up to INR 5,000/- for the first
the last 12 months months
conviction; subsequent convictions with imprisonment
for not less than 1 month which may extend up to 6
Returns Core Return in Form A
months or fine not less than INR 10,000/- which may
extend up to INR 25,000/-.
Registers Forms B, C and D Form E

(b) the Ease of Compliance to Maintain Registers under various Labour Laws Rules, 2017 - These Rules are applicable to all establishments
regardless of employee strength. Startups unable to avail of simplified reporting addressed in above, can use the formats prescribed in
these Rules to maintain combined registers under the Exempted Acts.

18
No penalty under the Exempted Acts would be applicable with respect to failure to furnish returns and maintain records/registers. Instead, the penalty under this Act would
be applicable for such non-compliance till such time as the Act is applicable.
19
Minimum number of employees required to qualify.

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Challenges, Practical Solutions and an Overview of the Labour Codes

The subjective and demanding nature of the applicability of the labour laws results in practical challenges for
startups that can throw up red flags to prospective investors in a due diligence exercise.

Even with the knowledge of the applicable compliances, it is difficult for startups to implement the same at the early stages of operation.
This is further complicated by the fact that while many compliances become immediately applicable to a startup upon commencement of
business, certain compliances (such as under the Maternity Benefit Act, 1961 and the Prevention of Sexual Harassment of Women at
Workplace (Prevention Prohibition and Redressal) Act, 2013) are technically not required until a woman is employed by an establishment,
even if the threshold number of employees specified in the law has been met. Failure to comply with these requirements (when applicable)
often attracts a significant monetary penalty or even the risk of imprisonment, leading to such non-compliances being highlighted as red
flag issues in a due diligence report to prospective investors. While the penalties paint a serious picture, startups and investors can
take comfort in standardised templates provided in the legislations, that simplify compliance and facilitate easy resolution of
non-compliances as conditions precedent to a transaction.

As addressed previously in this Handbook, a major overhaul of Indian labour law is looming on the horizon. The Government of India
has in 2020 introduced 4 new “Labour Codes” that collate and attempt to simplify four categories of labour legislations: (i) Wages; (ii) Social
Security; (iii) Occupational Safety, Health and Working Conditions; and (iv) Industrial Relations.20 These Labour Codes introduce
revolutionary changes to address a labour market that has rapidly evolved since the Covid-19 pandemic in 2020. As remote working options
become more commonplace, the likelihood of the simultaneous applicability of multiple state laws increases, which can only further murky
an understanding of the labour framework. Some of the salient changes are captured below:

(a) Code on Wages:

● revises the definition of “workman” as under IDA and increases the earning threshold of persons employed in a supervisory
capacity to INR 18,000/- per month;
● prohibition of discrimination on the basis of gender is built into the Code; and
● penalties for offences under the Code are fixed at a maximum of 3 months imprisonment and a fine of INR 1,00,000/-.

20
Ministry of Labour and Employment Press Release dated 12 December 2022 available here: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1882845

13
 (b) Code on Industrial Relations:
● introduces fixed term employment options on the basis of a written contract for a predetermined period;
● establishments with up to 300 workers would be able to proceed with lay-offs, retrenchment and closure without
government permission;
● proposed introduction of a re-skilling fund to train retrenched workers; and
● insertion of new conditions to conduct a legal strike.

(c) Code on Social Security:

● new categories of workers introduced: “home-based worker”; “platform worker”;
● PF contributions set at 10% of wages for both employers and employees, with flexibility for employees to contribute more if
they chose; and
● gratuity does not require continuous service of 5 years if the employment is terminated due to fixed-term expiration or
other notified events. The calculation would be on 50% of gross wages with a maximum limit of INR 20,00,000/-, paid pro
rata for fixed term or deceased employees.

(d) Code on Occupational Safety, Health and Working Conditions:

● issuance of a formal appointment letter mandated;
● daily work hour limit fixed at a maximum of 8 hours; and
● digitization of procedures: (i) registration; (ii) notice of commencement/ cessation of operations; (iii) maintenance of
registers, issue of wage slips and filing returns; (iv) inspection; (v) “single” registration for establishments having 10+
employees.

(e) Provisions specific to Startups under the Labour Codes:

● Startup mobile apps to self-certify21 on the “Shram Suvidha Portal” (the “Portal”)22 under certain labour laws; exempt from
inspection unless credible and verified complaints of violation approved by a senior authority are made;
● self-certified returns permitted from 2nd year onwards (up to 5 years since set up) with respect to certain labour laws;
● gratuity benefits should be accounted for annually;

21
Currently, 27 States and Union territories have implemented the process of self-certification for startups under 6 labour laws. Additionally, 9 states, including Haryana,
Madhya Pradesh, Maharashtra, Rajasthan, Gujarat, Uttar Pradesh, Punjab, Uttarakhand, and Delhi, have integrated their portals with the Portal.
22
Website link: https://shramsuvidha.gov.in/home;JSESSIONID=e3a6610a-b2f2-442c-a00a-c18c411b462b

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 ● mandatory PF contributions if 20 or more employees. Contributions are 12% of wages for employees earning less than INR
15,000/- per month; compliance under PF legislation continues to be applicable even if employee count drops below 20;
and
● ESI benefits (including sickness, maternity and injury coverage) mandatory if 10 or more employees; compliance continues
to be applicable even if employee count drops below 10.

Conclusion
The evolving landscape of labour laws in India presents significant opportunities for startups. By adhering to the new Labour Codes,
startups can ensure compliance with modern regulations. This encompasses a broad spectrum of obligations, from maintaining accurate
employee records and ensuring workplace safety to contributing to social security schemes and preventing workplace discrimination and
harassment.

The streamlined compliance procedures and self-certification options introduced by the Ministry of Labour and Employment further
support the growth and sustainability of startups. These measures reduce the regulatory burden, especially for new and emerging
businesses, by allowing them to focus more on innovation and growth while ensuring adherence to essential labour laws. The inclusion of
various worker categories under these codes, such as inter-state migrant workers, home-based workers, and platform workers, provides
Startups with the flexibility to adapt to dynamic market demands while maintaining a compliant and ethical work environment.

By understanding and implementing these key reforms, startups can not only navigate the complex regulatory framework but also foster a
supportive and equitable workplace, driving long-term success and contributing to the broader economic development of India. It is
important for start-ups to be aware of these legal requirements and to take necessary steps to ensure compliance with the law.

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Frequently Asked Questions

1. What are the primary labour laws that startups in India need to be aware of?

Startups in India need to be aware of several key labour laws including: the Payment of Wages Act, 1936; Employees' Provident Funds
and Miscellaneous Provisions Act, 1952; Employees State Insurance Act, 1948; Payment of Gratuity Act, 1972; Equal Remuneration
Act, 1976; Maternity Benefits Act, 1961; Prevention of Sexual Harassment of Women at Workplace Act, 2013; Payment of Bonus Act,
1975; and Rights of Persons with Disabilities Act, 2016. In addition, startups should also ensure compliance with each respective
state’s Shops and Establishments Act and Tax on Professions, Trades, Callings and Employments Act, as applicable.

2. What are the new Labour Codes, and how do they affect startups?

The new Labour Codes introduced by the Government of India aim to consolidate and simplify the existing labour laws into four
categories: Wages; Social Security; Occupational Safety, Health and Working Conditions; and Industrial Relations. These codes are
designed to reduce the complexity of compliance and introduce measures like fixed-term employment, reskilling funds for
retrenched workers, and self-certification for startups, thereby easing the regulatory burden on new businesses.

3. What provisions are required to be captured in a comprehensive HR Policy for a startup?

A comprehensive HR policy should contain provisions governing the terms of employment including: (a) working hours, overtime and
work week; (b) leave policy (including number of leaves available and the procedure to avail them); (c) maintenance of records, data
privacy and protection (both of the employees and of the company); and (d) a designated representative of the company who can
act as a point of contact to address employee grievances. Further, startups can also incorporate such mandatory compliances
prescribed under law, as the requirement for anti-sexual harassment and equal opportunity policies, into the HR policy.

4. What are the typical penalties for non-compliance with labour laws?

Penalties for non-compliance vary by law but can include fines, imprisonment, or both. For example, non-compliance with the
Employees State Insurance Act, 1948 can result in imprisonment up to 2 years and a fine up to INR 5,000. Startups must be vigilant
in adhering to all applicable laws to avoid these severe penalties.

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 5. While the Labour Codes promise ease of compliance, what concessions are presently available to startups?

In order to ease the burden of compliances under labour laws, the Ministry of Commerce and Industry23 has made self-certification
options available across various labour laws.

Startups can use the Portal to self-certify compliance24 under (among others) the Payment of Gratuity Act, 1972; the Employees’
Provident Funds and Miscellaneous Provisions Act, 1952; and the Employees State Insurance Act, 1948, and they will be exempt from
inspections thereunder unless there are credible and verified complaints of violations approved by a senior authority. Further from
the second year onwards and up to 5 years from the setting up of the unit, startups are required to furnish self-certified returns,
which would only be inspected when a credible and verifiable complaint of violation is filed in writing and approval has been
obtained from the higher authorities.

6. Are there any gender specific compliances to be undertaken by startups for female employees?

Yes, all employers are required to ensure compliance with the Maternity Benefit Act, 1961 and the Prevention of Sexual Harassment
of Women at Workplace (Prevention Prohibition and Redressal) Act, 2013. Further, from a safety standpoint, states sometimes
impose conditions on the employment of women, which would typically range from obligating employers to arrange a safe mode of
transport back home for such female employees, to outright bans on employing female workers on night shifts.

7. How are disputes resolved between employers and employees?

Employer-employee disputes are either treated as: (a) “industrial disputes” heard by labour courts under the Industrial Disputes Act,
1947; or (b) “civil” disputes based on breach of contract. It is important to note the applicability of the definition of “workman” under
the Industrial Disputes Act, 1947, as the same would determine whether a startup would be required to appear before the labour
courts. If the aggrieved employee does not satisfy the conditions to be considered a “workman” (i.e., the employee fits within the
exclusionary criteria), then the employee’s only recourse would be to file a suit against the employer for breach of contract.

23
For more details on the Startup India initiative Action Plan, including schemes for initial fundings, networking portals to connect with potential investors and advisory
councils/resources from the government, please see the Ministry of Commerce and Industry press briefing dated 02 August 2023 here:
https://pib.gov.in/PressReleasePage.aspx?PRID=1945152
24
Self declaration Shram Suvidha Portal accessible at: https://shramsuvidha.gov.in/startUp.action

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Get in touch with us
Treelife provides financial and legal support to entrepreneurs, investors, and foreign businesses with access to a team of professionals,
including chartered accountants, lawyers, and company secretaries, who have deep domain expertise in the startup ecosystem. Our
mission is to empower the startup ecosystem by providing holistic legal and finance solutions and save at least 80% time of stakeholders
by delegating tasks to experts with accountability and confidence.

[email protected] Follow us on

+91 99301 56000 | +91 22 6852 5768

www.treelife.in

Mumbai | Delhi |
Bangalore | GIFT City

Disclaimer: The above is for information purposes only and does not constitute advice or a legal opinion and are personal views of the author. The possibility of other views on
the subject matter cannot be ruled out. By the use of the said information, you agree that the Author / Treelife is not responsible or liable in any manner for the authenticity,
accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.

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