Introduction:
Setting up a Global Capability Center (GCC) in India requires navigating a complex legal landscape. Labour laws in India are evolving to address the needs of a dynamic workforce and global business environment.
For C-level executives planning to establish or expand GCCs in India, it’s crucial to have a deep understanding of key labour regulations. Here are the five must-know labour laws:
The Code on Wages, 2019
The Code on Wages is a landmark legislation aimed at simplifying and unifying wage-related regulations. It amalgamates several earlier laws into a single, cohesive framework, addressing wage management, compliance, and enforcement.
Detailed Considerations:
Minimum Wages: The Code stipulates that employers must adhere to minimum wage rates that state governments periodically update. This involves:
- State-specific Compliance: Understanding and applying different minimum wage rates across states and sectors.
Periodic Adjustments: Monitoring updates to minimum wage notifications and adjusting wage structures accordingly.
- Sector-specific Rates: Compliance with sector-specific wage rates which may differ from general minimum wage provisions.
Equal Remuneration: The Code mandates equal pay for equal work, irrespective of gender or other discriminatory factors. Key aspects include:
- Pay Equity Audits: Implementing regular audits to ensure fair compensation practices.
- Benchmarking: Setting up compensation benchmarks to ensure compliance with the principle of equal remuneration
Payment Regulations: The Code mandates that wages must be paid promptly, typically within the 7th of each month. Employers must:
- Automated Payroll Systems: Implement robust payroll systems to ensure timely payments.
- Deductions and Documentation: Ensure deductions are legal and documented transparently.
