India Regulatory Brief: Labor Rules Relaxed, UAE to Share Financial Information with India from 2018
New rules to reduce labor compliance burden for companies
On February 21, India’s labor ministry notified the Ease of Compliance to Maintain Registers under various Specified Labour Laws Rules 2017 (Ease of Compliance Rules). The new rules cuts down on the number of registers to be maintained under various labor laws. This will significantly reduce compliance burdens in the day-to-day operations of business establishments.
Earlier, employers were supposed to maintain 56 registers, but in accordance with the Maintenance of Register Rules, this number is reduced to five under nine Specified Labor Laws. The five registers are employee register, wage register, register of loan/recoveries, attendance register, and register of rest days/leave account of employees/leave with wages. These may be maintained electronically or as hard copy.
The nine Specified Labor Laws affected by the reform are: the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act 1996; Contract Labour (Regulation and Abolition) Act 1970; Equal Remuneration Act 1976; Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service) Act 1979; Mines Act 1952; Minimum Wages Act 1948; Payment of Wages Act 1936; Sales Promotion Employees (Conditions of Service) Act 1976; and Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act 1955.
Landmark Maternity Benefits (Amendment) Bill, 2016 approved
After parliament finally passed the Maternity Benefits (Amendment) Bill, 2016, India will be the country with the third most maternity leave in the world, following only Canada (50 weeks) and Norway (44 weeks). The bill, which will soon gain the President’s assent to become an Act of law, provides women in the organized sector with paid maternity leave of 26 weeks, up from 12 weeks, for the first two children. For the third child, the maternity leave entitlement will be for 12 weeks.
The bill also secures 12 weeks of maternity leave for mothers adopting a child below the age of three months as well as to commissioning mothers (biological mothers) who opt for surrogacy. The 12-week period in these cases will be calculated from the date the child is handed over to the adoptive or commissioning mother.
In other provisions, the bill mandates every establishment with over 50 employees to provide for crèche facilities within easy distance, which the mother can visit up to four times a day. The bill additionally permits women to negotiate work-from-home if they reach an understanding with their employers, after the maternity leave ends.
UAE to share financial information with India from January 2018
In another blow to Indian tax evaders, Dubai will no longer be a safe haven for unaccounted wealth from January 2018, when new rules of financial reporting will get activated. UAE banks have already introduced more stringent norms for opening of new accounts.
Once the UAE begins sharing financial information, Indian tax defaulters will not be able to park their unaccounted assets in the country or camouflage ownership of shell companies under the identity of nominee directors.
Up until now, a popular strategy has been the RBI sanctioned liberalized remittance route that permits a resident Indian to invest up to US$250,000 a year in properties and securities abroad. This provision enabled individuals to buy companies in the UAE and use the Emirati company bank account to hold untaxed money.
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An Introduction to Doing Business in India 2017 is designed to introduce the fundamentals of investing in India. As such, this comprehensive guide is ideal not only for businesses looking to enter the Indian market, but also for companies who already have a presence here and want to stay up-to-date with the most recent and relevant policy changes.
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