NonComplying Employers November2019

Region RO Kanpur

The Regional Office (RO) in Kanpur monitors compliance with labourrelated statutes for all establishments operating within its jurisdiction. In November2019 a significant number of employers were found to be noncompliant with statutory requirements such as the Employees Provident Fund (EPF), Employees State Insurance (ESI), Payment of Gratuity Act, and various factory safety regulations. This page summarises the key findings, legal implications, and recommended actions for employers and workers.

1. Scope of the Survey

The November2019 compliance exercise covered 1,254 registered establishments, ranging from small workshops (less than 10 workers) to large manufacturing units (over 500 workers). The assessment was carried out through onsite inspections, document verification and interviews with workers and management.

2. Major Areas of NonCompliance

3. Legal Consequences

The following penalties may be imposed under the respective Acts:

• EPF: Penalty of up to 5,000 per day for delayed contribution, plus interest.
• ESI: Fine ranging from 1,000 to 10,000 per default, and possible prosecution under the ESI Act.
• Gratuity Act: Employer may be directed to pay the outstanding gratuity with interest, and a penalty of up to 10% of the amount due.
• Factory Act: Closure orders for serious safety violations, imprisonment up to 6 months, and fines up to 1,00,000 per contravention.
• Minimum Wages Act: Compensation to workers for wage shortfall, plus a fine of up to 2,000 per worker.

4. Impact on Workers

Noncompliance directly harms workers in the following ways:

• Loss of retirement benefits and social security coverage.
• Increased risk of workplace accidents and health hazards.
• Financial insecurity due to unpaid wages or denial of gratuity.
• Reduced morale and trust in the employeremployee relationship.

5. Steps for Employers to Achieve Compliance

1. Register with EPF & ESI Authorities Ensure that all establishments employing 10 or more workers are registered and that worker details are updated annually.
2. Maintain Accurate Payroll Records Use a reliable payroll software that calculates statutory contributions on the correct wage base.
3. Regular Audits Conduct internal audits quarterly to verify that contributions, returns, and certificates are filed on time.
4. Safety Infrastructure Install fireextinguishers, emergency exits, and ensure proper lighting and ventilation as per the Factory Act.
5. Training & Awareness Organise monthly sessions for HR staff and supervisors on statutory obligations and workers rights.
6. Engage a Compliance Consultant For complex operations, seek professional assistance to navigate overlapping regulations.

6. Rights and Remedies for Employees

Workers who suspect noncompliance can take the following actions:

• File a complaint with the EPFO Regional Office (Kanpur) or the ESI Corporation office.
• Approach the Labour Commissioner under the Industrial Disputes Act for grievances related to gratuity, wages, or safety.
• Seek assistance from trade unions or workers welfare boards for collective redressal.
• Report safety violations to the Directorate General of Factory Advice (DGFA) for immediate inspection.

7. Recent Enforcement Actions (NovDec2019)

Below is a brief list of enforcement actions taken by the RO Kanpur during the last two months of 2019.

8. Contact Information for Queries

Regional Office Kanpur
Office of the Chief Labour Commissioner
2nd Floor, Labour Building, Bada Garhi Road, Kanpur 208001
Phone: 05122242020
Email: ro.kanpur@labour.gov.in

Ensuring compliance is not merely a legal obligation; it is essential for fostering a safe, productive, and trustworthy work environment. Employers in the RO Kanpur region are urged to take immediate corrective measures and adopt best practices to protect their workers and avoid punitive action.