During the COVID-19 pandemic, the Employees’ Provident Fund Organisation (EPFO) faced a surge in advance withdrawal requests and managed thousands of claims each week. To address this issue, the EPFO introduced its first fully automated claim settlement system, which processes claims without human intervention. This automation greatly relieved fund members by settling around 54 percent of COVID-19-related claims through the auto mode and cutting the settlement time from 10 days to just 3 days. The EPFO initially introduced this automated system specifically for illness-related advance withdrawals under para 68J of the scheme. Para 68J of the Employees’ Provident Fund Scheme, 1952, lets members and their family members advance withdraw Provident Fund for illness-related reasons.

To keep its members informed and up-to-date, the EPFO expanded the auto claim settlement system to cover education and marriage under Rule 68K, and housing under Rule 68B. The EPFO announced this expansion in a press release on May 13, 2024. This update allows members to make advance withdrawals for marriage or education for themselves and their children. Rule 68B permits advance withdrawals from the PF account to buy or construct a house. Additionally, the EPFO increased the maximum amount for auto claim settlements from ₹50,000 to ₹1,00,000 to enhance the quality of life for millions of fund members nationwide.

In the financial year 2023-24, the EPFO settled approximately 4.45 crore claims, with over 60% (2.84 crore) being advance claims. Out of these advance claims, around 89.52 lakh were processed using the auto mode.

Without the auto claim settlement system, members usually waited 10-20 days for the withdrawal amount to reach their bank accounts. The auto mode significantly speeds up this process. To use the system, members must have a Universal Account Number (UAN), an Aadhar card, a PAN card, and a bank account linked to their UAN. Members then access the EPFO online portal, complete claim form 31C, and specify the reason for the advance withdrawal.

Advance claims are settled within 3 days of receipt by the EPFO. This method is much faster than the traditional process, which involves verifying the EPF member’s eligibility, reviewing submitted documents, checking KYC status, and confirming bank account details. The auto mode, which operates without human intervention, automatically processes claims that meet KYC, eligibility, and bank validation criteria using IT tools. If a claim isn’t validated and isn’t returned or rejected, it indicates that it has been sent for a second level of scrutiny and approval.

What is “Wages”?

Wage is the monetary compensation or remuneration paid by an employer to employees in exchange for work done. Employers may calculate wage as a fixed amount for each task completed, or at an hourly/daily rate, based on easily measurable quantities of work performed.

Wages encompass all remunerations expressed in terms of money, encompassing the following:

• Amounts payable under the terms of employment,
• Payments under any award, settlement, or court order,
• Compensation for overtime work or for holidays/leave periods,
• Payments due on account of termination of employment

Wages does “not include” the following Payments:

• Bonus, which does not constitute part of the remuneration,
• Value of any house accommodation, provision of light, water, medical assistance, etc.,
• Any travel concession,
• Contributions payable by the employer to any pension or provident fund,
• Any sum paid to cover special expenses incurred as a requirement of employment,
• Gratuity payable upon termination of employment.

Objectives:

• Ensure the regulation of wage payments to a specific class of workers in the industry, preventing any wrongful deductions except those specified in the Act.
• Establish rules for determining the wage period, timing, and method of wage payment.
• Protect the rights of workers covered under this Act.

Applicability:

The Act applies to all individuals employed, whether directly or through contractors, in factories or specified industrial and other establishments.

The Central Government enforces the Act in Railways, Mines, Oilfields, and air transport services.

State Governments enforce the Act in all other establishments, including factories.

The Act does not apply to individuals earning Rs. 24,000/- or more per month.

Salient features of the Act

Obligations of Employers:

Every employer must pay wages to all the employees they employ. Additionally, any person designated, held responsible by the employer, or nominated by them must also ensure these payments

Wage Period:

The person responsible for wage payments must establish specific periods for which wages are payable, and no wage period should exceed one month.

Time and Mode of Payment of Wages:

Establishments with more than 1,000 employees must pay wages by the 10th day of the following month. All other employers must pay wages by the 7th day of the following month.

Employers must pay wages in current currency notes (cash) or through bank transfers.

Deductions from Wages:

Employers must ensure that wages are paid to all employees without any unauthorized deductions, except those permitted by this Act.

Deductions from wages may include:

• Fines
• Absence from duty
• Damage to or loss of goods, including loss of money, when such damage or loss is directly due to the employee’s neglect or default
• Recovery of advances or loans and the interest due on them
• Adjustment for over-payment of wages
• Payments made by the employee to the employer or their agent, which are also considered deductions from wages.

Deductions do not include the following penalties, provided the penalties conform to the requirements specified by the State Government:

• Withholding of increments or promotions
• Demotion to a lower post
• Suspension

 Compliance Requirements:

A. Maintenance of Registers:

Employers are required to maintain registers and records that include the following details:

Information about the persons employed

Work performed by the employees

Wages paid to employees and deductions made from their wages

All these registers must be preserved for a period of three years.

B. Display of Notice of Abstracts:

All employers must display a notice containing summaries of this Act and its rules in both English and the language spoken by the majority of the factory employees. This notice should include:

A list of acts and omissions approved under Rule 12

Rates of wages payable to employees (excluding those in supervisory or managerial positions)

Penalties for Offences under the Act:

If an employer fails to maintain the required registers, willfully refuses to provide information or returns, or willfully provides false information, authorities may impose fines up to Rs. 1,500, extending to Rs. 7,500.

Additionally, failure to pay wages by the specified date may result in an additional fine of up to Rs. 750 per day.

Undisbursed Wages in the Event of an Employee’s Death:

If wages cannot be paid due to the death of an employee or lack of information about their whereabouts, employers must pay the amount to the person nominated by the employee. If no nomination exists, the amount must be deposited with the prescribed authority.

 Conclusion

The act has established a range of rules and regulations to enhance and ensure efficient functioning within the industry. It empowers workers to perform their duties without worries about delayed payments or salary issues. The legislation sets the foundation for employees to work with dignity, bolstered by established mechanisms. Its provisions build trust between employers and employees, encouraging optimal productivity through motivation. The concepts of wage payment and deductions under the code are vital for industry operations, ensuring desired outcomes and providing benefits to employees.

A contractor employs a contract laborer, whether or not acknowledged by the main employer, to work in a company for a specified duration. These laborers, who are indirectly employed workers, typically receive compensation through daily wages or a monthly aggregate. The contractor is responsible for recruiting, supervising, and compensating them.

The practice of contract labor has long prevailed in India, both pre- and post-independence. Numerous commissions, committees, and even the Ministry of Labour have extensively scrutinized the working conditions of contract laborers.

Research indicates that contract laborers frequently endure poor economic conditions and face job insecurity due to the casual nature of their employment. Moreover, employers and contractors historically exploited them in the absence of regulations. Consequently, to combat this issue, the government enacted the Contract Labour (Regulation and Abolition) Act, 1970, which came into effect on February 10, 1971. This Act aims to regulate contract labor employment and safeguard them from exploitation nationwide.

The primary goals and scope of the Act include:

• Preventing the exploitation of contract labourers
• Ensuring adequate working conditions
• Establishing rules and regulations for registering establishments that employ contract labour
• Outlining requirements and procedures for licensing contracts

Who is covered by the Act?

The Act will be applicable to establishments meeting the following criteria:

– Any establishment where 50 or more workers are employed or were engaged as contract labour during any day within the last 12 months.

– Any contractor who employs or has employed 50 or more workers as contract labour on any day within the preceding 12 months.

Establishment to which the Act does not apply.

The Act excludes establishments engaged in casual or intermittent work, as well as seasonal work lasting less than 60 days. Intermittent work refers to activities performed for fewer than 120 days in the preceding 12 months.

Main Definitions.

Principle Employer

The Principal Employer encompasses various roles, including the head of any government or local authority, the proprietor or occupant, or the Manager of a factory as per the Factories Act. Additionally, it includes the Owner, Agent, or Manager of a mine, or any individual accountable for supervising and controlling the establishment.

Contractor

The term “contractor” pertains to any individual who provides contract labour for tasks at an establishment, which may also encompass subcontractors. Contractors falling under the Act’s purview are required to obtain a license as mandated by the Act.

Establishment and composition of the Advisory Boards.

The Contract Labour (Regulation and Abolition) Act, 1970 mandates the formation of central and state Advisory Boards. These Boards are tasked with advising the central and state governments, respectively, on issues related to the Act’s administration and performing functions designated by the Act.

The Central Advisory Board

The Central Government establishes the Central Advisory Board, which includes representatives from various sectors such as government, railways, coal industry, mining, contractors, workers, and other relevant sectors as determined by the government. Additionally, the Central Government may appoint eleven to seventeen members to the Advisory Board. Moreover, the number of members from the workers’ side must not be fewer than those representing the principal employer and contractors. The Board also includes a chairman appointed by the Central Government and the Chief Labour Commissioner.

The State Advisory Board.

The State Advisory Board is established by the respective State Governments and comprises a chairman appointed by the government. Additionally, in the absence of the Labour Commissioner of that State, the State Government will designate another officer to serve on the Board.

In addition to these individuals, the State government has the authority to appoint nine to eleven members representing various sectors, such as government, industry, contractors, workers, and other sectors chosen by the State government.

Furthermore, the number of members representing workers must not be fewer than those representing the principal employer and contractors. Additionally, both the central and State Advisory Boards are empowered to establish committees as deemed necessary under the Act. Moreover, these committees will fulfill their duties and responsibilities in accordance with the provisions of the Act.

Registration of Establishment hiring contract labour.

Every establishment intending to employ contract labour must acquire a registration certificate from the appropriate government authority. Additionally, the registration process involves submitting Form No. 1 along with the prescribed registration fee receipt to the Registration Authority. Furthermore, upon thoroughly examining and verifying the application, the Registering Authority may register the establishment and issue a registration certificate in Form II. This certificate will also include essential details such as the establishment’s name and address, the maximum number of contract workers to be hired, the nature of the business, and any other relevant particulars.

The Responsibilities of the Employer.

The employer must adhere to the following duties:

1. Registering the establishment.
2. Employing contract labour exclusively through licensed contractors.
3. Posting a notice in both English and the local language, displaying the name and address of the Inspector, along with wage details and payment dates.
4. Ensuring that the contractor pays wages according to government-set standards or, in the absence of such standards, provides fair wages, as determined by the Commissioner of Labour.

Licensing of Contractors.

Any contractor intending to engage in work using contract labour must obtain a license from the Licensing Authority. This requirement applies to contractors who employ fifty or more workers on any day of the month.

The Procedure for obtaining a License.

The license is issued under Sec.12 of the Act by the licensing authority.

Contractors must submit an official request and application form to the Licensing Authority.

A security deposit must be deposited along with the application.

Conditions such as working hours, wage fixation, and amenities for contract labour are specified in the license.

The application form should include details about the establishment’s location, nature of work, and other relevant information.

The license remains valid for the specified period and can be renewed periodically by paying the relevant fee.

Provide the following facilities:

When employing 100 or more workers for a period of at least six months, establishments must provide a canteen for contract labour.

Separate urinals for men and women must be adequately provided.

Amenities such as drinking water, washing facilities, first aid, and a crèche are to be provided.

Various registers and records must be maintained appropriately.

A separate register of Contractors in Form XII should be maintained.

Annual returns must be filed to the licensing authority by February 15th of each year.

Responsibilities of the Contractor.

The contractor must seek approval from the Principal Employer.

Obtaining a license from the Licensing Authority is mandatory.

Monthly bills for payment to contract labour must be raised.

Maintenance of all relevant registers such as Muster Roll, Wage register, etc., is required.

Wages must be paid on or before the 7th of each month.

Wages should be disbursed in the presence of the employer’s representative.

Employment cards must be distributed to all workers three days before work commences.

Half-year returns in Form XXIV must be filed within 30 days from the close of each half-year period, i.e., June and December.

Penalties.

Individuals who breach any provision of the Act or its associated rules may face imprisonment for up to three months, a fine of One Thousand rupees, or both. Moreover, in cases of persistent violation, authorities may impose an additional fine of one hundred rupees per day for each day of contravention.

Shortcomings in the Act that need change.

The Contract Labour (Regulation and Abolition) Act, 1970 exhibits various shortcomings that require legislative attention to enhance implementation effectiveness.

The Act fails to distinguish between core and peripheral activities, resulting in poor enforcement.

The Act applies to establishments with 50 or more contract labourers, enabling establishments and contractors to evade responsibility by hiring fewer than 50 labourers.

Establishments exploit loopholes by obtaining licenses under different names; adopting a unified system for registration issuance and appointing a licensing authority in each state can address this issue

Principal employers often opt to pay penalties rather than comply with Act provisions due to inadequate penal provisions.

Extending education schemes to contract labourers is imperative, considering their predominantly unskilled, illiterate, and uninformed status regarding their rights.

The Act’s lack of direct or independent provisions for filing claims necessitates submitting them under the Payment of Wages Act or Minimum Wages Act, highlighting the need for their inclusion within the Act itself.

Conclusion.

The central government introduced the Contract Labour (Regulation and Abolition) Act, 1970 to safeguard contract labourers from exploitation by employers and contractors. The Act grants them specific rights and legal recourse to claim their rightful dues. However, legislative measures are essential to address existing deficiencies and enhance the provisions. Additionally, simplifying the Act for principal employers and contractors is imperative, along with incorporating provisions for improved safeguards and amenities for contract labourers.

With extensive experience in managing payroll and ensuring compliance with statutory regulations, Serve HR has successfully supported clients in meeting their contract labour needs. We proficiently address all aspects related to contract labour employment, and establishments have benefited from our expertise in this area. Our advanced cloud-based e-compliance portal simplifies these processes, providing organizations easy access to relevant information whenever needed.

Please note: –

Registration forms and number of employees differs from state to state.

INTRODUTION

The “Payment of Bonus Act 1965,” along with its amendments by the “Payment of Bonus Rules, 1975” (central rules), legally mandates employers to ensure bonus payments. Its primary objective is to impose a legal obligation on employers regarding bonus provision.

Any factory or establishment that employs a minimum of 20 individuals on any given day during the financial year falls under the applicability of the Payment of Bonus Act 1965.

What exactly is a Bonus?

An employer gives a bonus to an employee as an additional payment, typically as a reward, along with their regular monthly salary within an establishment. The primary aim of a bonus is for the organization to distribute its profits among its workforce. It’s important to emphasize that a bonus does not take into account any form of non-monetary contribution.

The employer must ensure that the minimum bonus is equivalent to 8.33% of the employee’s annual wage or a fixed amount of one hundred rupees for employees aged 15 and above, and sixty rupees for those below 15. However, the employer must limit the maximum bonus payable during the fiscal year to 20% of the employee’s salary.

What are the establishments/industries/factories covered by the act?

The law applies across India and covers:

All factories

Other establishments with 20 or more employees engaged on any day during the year

Any establishment or category of establishments recognized in the Gazette by the relevant governments

Part-time employees are also covered.

Establishments under the Payment of Bonus Act 1965 must continue bonus payments even if the number of employees decreases later on.

Which types of establishments are exempt from the application of the Act?

General Insurance Company or LIC employs workers.

Seafarers fall under the Merchant Shipping Payment of Bonus Act 1965.

The Reserve Bank of India employs staff.

Unit Trust of India, IDBI, Deposit Insurance Corporation, and similar organizations employ workers.

What are the criteria employees need to fulfill to qualify for a bonus?

Employees qualify to receive a bonus if they meet the following criteria:

Their monthly salary must not surpass Rs. 21,000/- (As per the 2015 Amendment).

They must have worked in the establishment for at least 30 days throughout the calendar year.

However, involvement in certain misconducts such as fraud, aggression, rioting, theft, misappropriation, or property sabotage disqualifies an employee from receiving a bonus (As per Section 9 of the Payment of Bonus Act 1965).

What is the maximum time for Bonus Payment?

Employers must disburse the bonus within eight months from the conclusion of the financial year or within one month from the enactment of the Payment of Bonus Act 1965.

How is the amount of Bonus due determined?

Section 10 of the Payment of Bonus Act 1965 requires all institutions covered by the act to provide a minimum bonus of 8.33% of the employee’s salary/wages. However, Section 11 stipulates that the maximum bonus allowable cannot exceed 20% of the employee’s salary/wages.

As of 2015, the calculation ceiling for bonus computation rose to Rs. 7,000 per month from its previous level of Rs. 3,000. Hence, employees with a gross salary of up to Rs. 21,000 per month qualify for a bonus.

Only the employee’s salary/wages and Dearness Allowance are considered for bonus calculation.

Therefore, if the Basic Salary and Dearness Allowance fall below Rs. 7,000 (the calculation ceiling), the bonus calculation will be based on the actual amount. However, if the Basic Salary and Dearness Allowance exceed Rs. 7,000, the bonus calculation will be based on Rs. 7,000 only.

What are the Act’s offense and penalty provisions?

If an individual fails to comply with any provision of the Payment of Bonus Act 1965 or its regulations, they may face imprisonment for up to six months, a fine of up to Rs. 1,000, or both.

Non-compliance with a directive issued under the Payment of Bonus Act 1965 may lead to imprisonment for up to six months, a fine of up to Rs. 1,000, or both.

If the corporation commits an offense under the Payment of Bonus Act 1965, individuals responsible for the company’s operations (such as Managing Director, CEO, CFO, Managerial Head) will incur corresponding penalties.

What are the most recent Act updates/changes?

An amendment named the Payment of Bonus (Amendment) Act, 2015, became effective on April 1, 2014, increasing the maximum calculation for bonus payment to Rs. 7,000.

Furthermore, the Payment of Bonus (Amendment) Rules, 2016, which revised the fundamental rules of 1975, were officially published in the gazette.

Bonus Disqualification Under the Act

Section 9 of the law stipulates that if an employee is terminated for reasons such as fraud, engaging in violent behavior on the business premises, or involvement in theft, misappropriation, or sabotage of company property, they become ineligible to receive a bonus under the Payment of Bonus Act 1965.

This guideline reflects the recommendation of the Bonus Commission, emphasizing that employees who contribute to the stability and prosperity of the industry, rather than those who display disruptive behavior, should receive bonuses. Undoubtedly, receiving bonuses entails a responsibility to uphold good conduct..

Payment of Minimum Bonus

Section 10 of the Payment of Bonus Act 1965 mandates that every employer must ensure that each employee receives a minimum bonus equal to 8.33% of their salary or wage earned during the fiscal year, or one hundred rupees, whichever is higher. For employees under the age of fifteen at the beginning of the fiscal year, this Section applies with sixty rupees substituted for “one hundred rupees.” The employer must still pay the minimum bonus even if the company experiences losses during the fiscal year.

Payment of Maximum Bonus

If the allocable surplus for a fiscal year specified in Section 10 exceeds the minimum bonus amount prescribed for employees under that Section, the employer may choose to give a bonus equivalent to each employee’s salary or wage earned during that fiscal year. The calculation of the allocable surplus under this Section takes into account any amounts allocated or set off under the provisions of Section 15.

Conclusion

The Payment of Bonus Act 1965 was enacted to legalize the practice of many organizations providing bonuses. It establishes a bonus calculation approach tied to profits and performance, enabling employees to earn beyond the minimum salary or income.

The Equal Remuneration Act (ERA) aims to bridge the gender pay gap by ensuring equitable pay for employees in similar roles, regardless of gender, wage scale, social security, or nationality. Enacted in 1976 to combat sex-based discrimination, it safeguards workers from wage-related exploitation. The Act applies universally to employers, irrespective of their size or job classifications, covering both manual and non-manual labor positions, as well as aspects like hotel accommodations, travel expense reimbursements, and compensation for temporary work assignments or relocations.

Under this legislation, payments must be made by the 7th of each month for businesses with fewer than 1000 employees, and by the 10th for those with over 1000 employees.

Why Is the Act Important to Employers and Employees?

Promotes Workplace Fairness and Equality

The ERA ensures equitable compensation for employees by addressing various factors like gender and other forms of bias that may impede fair pay. Additionally, the Act safeguards fringe benefits such as leave, holidays, and allowances. Employment regulations like the Minimum Wages Act of 1948 ensure that all workers receive fair compensation to sustain their customary means of living.

Promotes Respectful Business Practices Towards Employees

The ERA encourages government employers to embrace business practices that ensure equal treatment for all employees, regardless of gender. Organizations that implement such practices have noticed increased employee motivation, as individuals feel valued and rewarded solely based on their job performance. Additionally, the central government mandates that employers avoid gender discrimination and strive to narrow the wage gap. Employers must adhere to these laws and uphold wage equality.

Safeguards Women Against Wage and Benefit Discrimination

Historically, women have encountered bias and unfair treatment concerning wages and benefits at work. By eliminating unjust disparities, the ERA guarantees equal treatment for both genders regarding workplace benefits, encompassing wages, vacation time, sick leave, health insurance, retirement plans, and more.

Recent studies indicate that the average monthly earnings in India were INR 32,840 (approximately US$422).

Key Provisions of the Act:

1. Prohibition of Gender-Based Discrimination:

The ERA prohibits discrimination based on gender in terms of remuneration for any job, regardless of occupation. Employers are prohibited from providing different compensation solely based on an individual’s sex. The Act emphasizes valuing employees without regard to their gender or sexual orientation.

2. Wage Revision Requirement:

The Act mandates periodic wage revisions, taking into account changes in the cost of living and wage history, to ensure equal pay for equivalent work performed by both men and women. It guarantees that individuals receive equal wages for equal positions within the same organization.

3. Establishment of Wage Fixing Authority:

The Act establishes a wage-fixing authority appointed by the government to ensure that wages are fairly determined and appropriate compensation is provided for various job roles across workplaces in India. Job postings must adhere to competitive compensation strategies, explicitly stating the basis of wage determination and its applicability to both genders.

Additionally, if a surcharge is applied, an additional 4% tax for health and education purposes will be levied on both the income tax and the surcharge amount.

4. Promoting Balanced Gender Pay Ratios:

The Equal Pay Act ensures that all qualified individuals, regardless of gender, receive equitable wages, and female candidates are not subject to discrimination in training, transfers, or promotions. Benefits such as dearness allowance, minimum wage rates, and travel allowances should be consistent for all employees performing similar duties or responsibilities. Bonuses must range from a minimum of 8.33% to a maximum of 20%.

5. Consequences for Non-Compliance:

Employers failing to adhere to the Equal Pay Act may face severe penalties, including forfeiting wages for business days, paying liquidated damages, and fines. Employers may invoke affirmative defenses to avoid liability by demonstrating that their pay structure is based on factors such as seniority or merit rather than gender. Federal government employees have the right to pursue claims in civil court for non-compliance with the Act. However, employers must clearly outline compensation in job postings to ensure fair wages for all.

6. Advancing Gender Equality:

The ERA stands as a landmark legislation fostering gender equality in workplaces. By ensuring equal pay for equal work, it helps narrow the gender wage gap and enhances economic security for women. Moreover, the Act underscores India’s commitment to promoting gender equality and empowering women by offering improved job prospects and financial stability.

Implications of the Equal Remuneration Act

Ensuring Fair Allocation of Working Hours:

The ERA mandates protection against gender-based discrimination concerning working hours, necessitating employers to maintain uniform criteria for men and women engaged in similar roles. If female employees are granted extended working hours, equivalent provisions must be extended to male employees as well. Both domestic and international corporations are bound by the ERA’s provisions, requiring equal working hours for male and female employees alike.

Ensuring Equitable Employee Benefits Allocation:

Under the ERA, employers are obligated to provide uniform employee benefits irrespective of gender identification. This encompasses entitlements such as maternity and paternity leave, healthcare coverage, life insurance policies, pension schemes, etc. Employers must ensure equal accessibility to official employee provident fund facilities to enable both male and female workers to avail themselves without discrimination.

Promoting Equality Across Business Divisions:

According to the ERA, all enterprises must treat employees equally, regardless of gender identification, when distributing resources and talent across various business units. Positions must be filled based on merit, ensuring both male and female individuals have equal opportunities to secure suitable roles with commensurate remuneration packages across each business division they operate in.

Stricter compliance regulations emphasize the necessity for companies to uphold uniform standards of equality across all business units. Failure to comply may result in significant legal repercussions.

Ensuring Compliance with the Act:

1. Establish a Gender-Neutral Compensation Policy:

Employers should formulate a compensation policy devoid of gender biases to ensure equitable pay for all employees. This may involve defining clear criteria for determining pay, such as qualifications, experience, and job responsibilities, while avoiding subjective factors that could lead to gender-based pay differentials.

2. Maintain Thorough Documentation:

Employers should maintain meticulous records of employee wages, encompassing details on pay rates, job roles, and performance assessments. This practice aids in identifying and promptly addressing any instances of pay disparities. Additionally, employers should provide employees with legal protections and cost-of-living allowances to safeguard them against potential legal challenges.

3. Conduct Training Sessions:

Employers ought to organize training sessions for managers and human resources personnel to educate them about the requirements of the ERA and the importance of pay equity. This ensures that all staff members are aware of their rights and emphasizes the company’s dedication to fair compensation practices. Additionally, the company should refrain from taking adverse employment actions, such as demotions or terminations, against employees who assert their rights under the Act.

How Can Employers Use the Equal Remuneration Act to Their Advantage?

Employee Engagement:

Employers can leverage the ERA to initiate conversations with employees regarding pay equity, encouraging them to voice concerns about potential disparities. This approach fosters a more equitable work environment and enhances employee satisfaction.

Enhanced Employer Reputation:

Embracing a policy of equal pay for equal work can enhance an employer’s reputation among customers, clients, and stakeholders, showcasing a commitment to fairness and social responsibility. Additionally, it can attract top talent to the organization.

Recognition of Employee Value:

Through implementing the ERA, employers demonstrate to employees that they value and respect their contributions. This acknowledgment fosters increased loyalty and engagement, ultimately leading to enhanced productivity in the workplace.

Commitment to Compliance:

Employers should demonstrate a genuine commitment to comply with the ERA. This entails regularly reviewing salary structures, addressing any identified disparities, and providing all employees with opportunities for career growth and advancement.