LABOUR LAW

4.Constitutional provisions with regard to labour laws The relevance of the dignity of human labour
and the need for protecting and safeguarding the interest of labour as human beings has been
enshrined in Chapter-III (Articles 16, 19, 23 & 24) and 7 Chapter IV (Articles 39, 41, 42, 43, 43A &
54) of the Constitution of India keeping in line with Fundamental Rights and Directive Principles of
State Policy

Labour laws enacted by the Central Government, where the Central Government has the sole
responsibility for enforcement

1. The Employees’ State Insurance Act, 1948

2. The Employees’ Provident Fund and Miscellaneous Provisions Act,1952

3. The Dock Workers (Safety, Health and Welfare) Act, 1986

4. The Mines Act, 1952

5. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare (Cess) Act, 197

6. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labor Welfare Fund Act, 1976
7. The Mica Mines Labour Welfare Fund Act, 1946

8. The Beedi Workers Welfare Cess Act, 1976

9. The Limestone and Dolomite Mines Labour Welfare Fund Act, 1972

10. The Cine Workers Welfare (Cess) Act, 1981

11. The Beedi Workers Welfare Fund Act, 1976

12. The Cine Workers Welfare Fund Act, 1981

(b) Labour laws enacted by Central Government and enforced both by Central and State
Governments

13. The Child Labour (Prohibition and Regulation) Act, 1986.

14. The Building and Other Constructions Workers’ (Regulation of Employment and Conditions of
Service) Act, 1996.

15. The Contract Labour (Regulation and Abolition) Act, 1970.

16. The Equal Remuneration Act, 1976.

17. The Industrial Disputes Act, 1947. 12

18. The Industrial Employment (Standing Orders) Act, 1946.

19. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act,
1979.
20. The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain
Establishments) Act, 1988

21. The Maternity Benefit Act, 1961

22. The Minimum Wages Act, 1948

23. The Payment of Bonus Act, 1965

24. The Payment of Gratuity Act, 1972

25. The Payment of Wages Act, 1936

26. The Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981

27. The Building and Other Construction Workers Cess Act, 1996

28. The Apprentices Act, 1961

29. Unorganized Workers Social Security Act, 2008

30. Working Journalists (Fixation of Rates of Wages Act, 1958

31. Merchant Shipping Act, 1958

32. Sales Promotion Employees Act, 1976

33. Dangerous Machines (Regulation) Act, 1983

34. Dock Workers (Regulation of Employment) Act, 1948

35. Dock Workers (Regulation of Employment) (Inapplicability to Major Ports) Act, 1997

36. Private Security Agencies (Regulation) Act, 2005

RISK IN LABOUR LAW

1. Hiring

There are 3 main areas of risk here: restrictive covenants, compensation arrangements, and
confidential information. Having a standard documentation and communication process in
place goes a long way toward addressing these.

Restrictive covenants — Employers often use non compete and non solicitation clauses to
retain employees. While non competes are not enforceable in California, if you’re not careful
during the hiring process, you could find yourself on the wrong side of a non solicitation
proceeding.
  The right way: Make sure you have written agreements with new employees:
disclosing which clauses they are subject to and get their agreement in writing not to
breach agreements they have made with prior employers.

Compensation agreements — A common problem for cash-strapped early stage companies

involves agreements to defer salary based on getting funded or on the occurrence of some
other contingency. Not only could this practice land you in court, it guarantees an
unfavorable outcome because it violates California law!

 The right way: Structure payments as a bonus plan with clearly defined terms and
conditions to be met. This avoids giving employees rights that they could pursue in
court in the case of non-payment.

Protection of confidential information — It’s not enough to have employees sign NDAs.
Your success in getting redress if an employee leaks confidential information hinges on
demonstrating that you took appropriate steps to properly safeguard your information. See
my post on NDAs for more color.

 The right way: Stay away from all-encompassing or vague descriptions of what is
confidential. Put documentation and a communication process in place during on-
boarding. And assign a point person for tracking.

2. Independent Contractors and Employees

There are specific legal tests to distinguish between the two groups, but it really comes down
to whether you control the manner and means of their work. If you do, then they are
employees. The classification has legal as well as tax implications and both the IRS and
California’s Employment Law Department are increasingly focusing (and levying penalties!)
on violators. Priori Legal did a great article about the difference between contractors and
employees, on the Justworks Blog.

Correctly classifying employees can be tricky businesses. We've also built a comprehensive
guide outlining all seven employee types.

 The right way: Assign correct classifications, use appropriate tax and other
compliance forms, and review your designations annually.

3. Exempt vs Non-Exempt Employees

This potential minefield is one that early stage companies often do not give enough attention!
Make every effort to get this right the first time. Even a little bit of time spent on the front
end can significantly mitigate risks. Changing categories later isn’t easy, raises serious red
flags, and may leave you exposed to a host of unpleasant outcomes including litigation, fines,
and penalties.

The two requirements for categorizing an employee as exempt are that he or she is paid on a
salary basis and performing a category of work classified as exempt under state and federal
law. Non exempt (hourly) staff are entitled to rest and meal breaks as well as overtime pay.
There is also a specific exemption for computer programmers; but be careful: they need to be
doing certain types of work and receiving a minimum annual salary (about $84,000) to
qualify.

 The right way: Set up and regularly monitor a simple employee classification system.
Then as you’re on-boarding new employees, think through their duties and make sure
you’re placing them in the right categories.

4. Protection of Confidential Information

Trade secret laws are all predicated on you and your company taking appropriate steps to
keep proprietary information confidential. As I mentioned above, if you haven’t done that,
you forfeit legal protection.

 The right way: As with on-boarding, your exit process for departing
employees/founders should include having them provide an affirmation that they
understand the agreement, a process for them to return confidential information
(checklists can help organize this), and getting their sign-off.

5. Written Policies and Procedures

Make sure you have clearly communicated policies covering these 4 areas:

1. Anti-harassment (include a reporting mechanism and complaint process)

2. Equal employment opportunity and Non-discrimination
3. Meal period and rest breaks for non-exempt employees
4. Computer, PDA, and Social Media usage (a good policy should state that employees
have no expectation of privacy and designate who is allowed to make official
statements for your company).

 The right way: make sure you put these 4 in writing, then post or distribute them to
employees. And set up a system (hard copy sign off or electronic) to provide
employee confirmation of receipt.

1. Wrongful Termination Claims: If an employer terminates an employee in violation

of labor laws or without proper justification, it may lead to wrongful termination
claims. This includes terminations based on discrimination, retaliation for
whistleblowing, or in breach of employment contracts or collective bargaining
agreements.
2. Discrimination and Harassment Claims: Failure to comply with anti-discrimination
laws can result in legal claims alleging discrimination or harassment based on
protected characteristics such as race, gender, age, disability, religion, or sexual
orientation. Employers must ensure equal treatment and provide a workplace free
from discrimination and harassment.
3. Wage and Hour Violations: Violations of wage and hour laws, such as failure to pay
minimum wage, overtime, or misclassification of employees as exempt from overtime
pay, can lead to legal action by employees or government agencies. Employers must
accurately record hours worked and ensure compliance with wage and hour
regulations to avoid liability.
4. Employee Misclassification: Misclassifying workers as independent contractors
instead of employees can result in legal risks, including claims for unpaid wages,
 benefits, and taxes. Employers must correctly classify workers according to applicable
legal criteria to avoid misclassification liability.
5. Safety and Health Violations: Failure to provide a safe and healthy work
environment, comply with occupational safety and health regulations, or address
workplace hazards can lead to legal action by employees or government agencies.
Employers have a legal duty to maintain workplace safety and protect employees
from foreseeable risks of harm.
6. Violations of Collective Bargaining Agreements: Employers who fail to adhere to
the terms of collective bargaining agreements negotiated with labor unions may face
legal action, including grievances, arbitration, or lawsuits for breach of contract.
Compliance with collective bargaining agreements is essential to maintaining labor
peace and avoiding legal disputes.
7. Retaliation Claims: Taking adverse action against employees for exercising their
rights under labor laws, such as filing complaints, participating in investigations, or
engaging in protected activities, can result in retaliation claims. Employers must
refrain from retaliating against employees and provide protections for whistleblowers.
8. Failure to Accommodate Disabilities: Employers have a legal obligation to provide
reasonable accommodations for employees with disabilities under anti-discrimination
laws such as the Americans with Disabilities Act (ADA). Failure to provide
accommodations or engaging in disability discrimination can lead to legal liability.
9. Recordkeeping and Documentation Violations: Inadequate recordkeeping or failure
to maintain required documentation related to employment practices, such as payroll
records, personnel files, and workplace policies, can result in legal risks. Employers
must ensure compliance with recordkeeping requirements to defend against legal
claims and audits.
10. Social Media and Privacy Issues: Employers must navigate legal risks related to
monitoring employees' use of social media, accessing personal information, and
maintaining privacy rights in the workplace. Violations of employee privacy rights or
engaging in unlawful surveillance can result in legal claims for invasion of privacy or
violations of labor laws.