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India celebrates Labour Day on May 1st, also known as Mazdoor Diwas. It is a crucial day of recognition for workers in every sector of the company, from manual labour to white-collar jobs. Every worker must know their proper financial rights to avoid exploitation.
Here are some fundamental yet critical financial rights every Indian worker must be aware of. Under the Minimum Wages Act of 1948, every Indian worker is entitled to receive at least the minimum wage set by the central or state government. These rates differ depending on the type of working sector or the location and conditions in which they work.
Every worker must check the state's latest minimum wage notification to be up to date with the information. Employers who pay less than the minimum wage to their employees can face legal and financial troubles. The Payment of Wages Act, 1936 specifies that every worker must be paid timely and without delay on agreed upon frequency such as daily, bi-weekly or monthly.
Delays that take place without justification are illegal and employers can face penalty. Overtime working is also one of the right along with separate compensation for it, the pay has to be double the regular rate for overtime. If you work in an establishment with 20 or more employees, you are covered under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
However, it is a choice to be enrolled in it, but it is compulsory for the employer to present the option for you to choose. In EPF, both employees and employers have to contribute. The contribution has to be 12 per cent of the basic salary of the employee along with the same amount contributed by the employee along with dearness allowance.
It is basically a retirement savings account which can be operated online by the account holder, and the balance can be checked through the EPFO official portal. Under the Payment of Gratuity Act of 1972, if you have completed five or more years of continuous service in a company, you are eligible for gratuity payment upon leaving the job, retirement, or death. It is calculated as Formula: ( 15 × Last drawn salary × Working tenure) ÷ 30.
Gratuity The gratuity is tax-free but up to the cap of Rs. 20 Lakh according to the latest rules. Goes for both government employees and those working in corporate sector.
The Payment of Bonus Act, 1965 states that employees earning up to ₹21,000 per month (basic + DA) are eligible for an annual bonus ranging from 8.33% to 20% of their salary, this is only possible in cases where the company has made profit which can be further distributed to the employees. The Equal Remuneration Act, 1976, ensures that men and women are paid equally for the same or similar kind of work.
Discrimination on the basis of sex is a violation of moral rights. Hence, it is illegal and punishable by real jail time. Discrimination on the basis of sex at workplace is similarly illegal; the employee has the right to sue the company that discriminates on the basis of gender on the same or similar tasks.
The Maternity Benefit Act of 1961 grants women up to 26 weeks of paid maternity leave, and while it's not a universally recognised right, paternity leave is becoming increasingly common in HR practices. The Employees' State Insurance (ESI) Act of 1948 allows employees with a monthly salary of ₹21,000 or less to receive medical, injury, maternity leave, and sickness benefits, with both employers and employees contributing. The Employees' Compensation Act of 1923 ensures workers and their families receive financial compensation for work-related injuries, diseases, or deaths, without the need for court proceedings.
Workers are entitled to an appointment letter outlining employment terms, and payslips are mandatory as proof of income, tax deduction, and employment status..
