GOVERNMENT PROPOSES MAJOR LABOUR LAW CHANGES FOR EASE OF COMPLIANCE

PROPOSED MAJOR LABOUR LAW CHANGES FOR EASE OF COMPLIANCE

The Code on Occupational Safety, Health and Working Conditions, 2019 (“OSHW”), introduced by the Ministry of Labour and Employment introduces provisions allowing companies to have a single registration, which will be coupled with a single licence, along with a single return, for executing projects for five years involving contract workers, across the country.

An establishment will require a single registration instead of around 10 required to be done for all labour laws, a move that may help India bolster its “ease of doing business” ranking. Significantly, the Code on OSHW will cover all establishments hiring at least 10 workers, including those in services sector, thereby bringing the information technology sector within its ambit.

Employers will have to create a security deposit with the government at the time of obtaining such licence and specify the number of contract workers it might require. In case an employer wants to hire more contract workers, it will have to go back to the government to renew the licence and make an additional deposit.

In a further bid to improve ease of doing business, the Centre has proposed assigning “inspector-cum-facilitators” outside their jurisdiction “through randomised computer system”.

The provision of one licence and one return in place of multiple licences and returns in existing 13 labour laws subsumed in this Code is intended to save time, resources and efforts of businesses.

LexStart’s Upcoming Events

LexStart upcoming events on Convertible Notes, investment term sheets & Key Compliances for Stakeholders

  1. July 26, 2019: Master Class on Convertible Notes (Webinar)

Timing: 4 p.m to 5.30 p.m.

Join LexStart for a detailed analysis of Convertible Notes as instruments for fundraising. This Master Class on Convertible Notes will answer the following questions:

  • What is a Convertible Note?
  • How is it different from CCDs and CCPS?
  • How does valuation work in a Convertible Note? How do the concepts of floor and cap work?
  • Is Convertible Note the right instrument for you?

Convertible Notes are a relatively new instrument in the Indian startup ecosystem and this Master Class will help both startups and investors understand how these instruments work. Convertible Notes are a cheaper and faster route of fundraising available to registered startups and this Master Class will help startups understand how to use them.

Click here to register 

 

 

  1. July 30, 2019: Term Sheets 101 (Webinar)

Timing: 4.30 p.m to 5.30 p.m.

Join LexStart for a detailed discussion on investment term sheets, which will help you:

  • Understand fundraising jargon typically used in investment term sheets and how to negotiate them
  • Learn more about different investor rights like pre-emptive rights, tag rights, drag rights and liquidation preference typically found in investment term sheets
  • Learn more about company/promoter obligations typically included in investment term sheets

 Click here to register 

 

 

  1. July 31, 2019: Corporate Governance – Key Compliances for Stakeholders (Webinar)

Timing: 4 p.m to 5 p.m.

Join LexStart for a detailed discussion on the key compliances that stakeholders in startups should be aware of. In this session, we will cover the following:

  • Thinking of taking a Board seat? Understand the Director obligations & liabilities
  • Running a startup? Understand important corporate compliances
  • Investing in a company, or fundraising from a VC? Understand the compliances involved

Click here to register 

Mandatory POSH filing under Prevention of Sexual Harassment Act

Constitution of your Internal Committee, POSH ACT
The Government of Maharashtra has issued a letter requiring employers of workplaces in the District of Mumbai City employing 10 or more employees to report details of constitution of their Internal Committee (IC) under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Form on Page 3 of the letter needs to be filled in and mailed by July 20, 2019, failing which a penalty of INR 50,000 will apply.
The Form and its attachments have to be sent to the address below:
1. District Collector or Deputy District Collector, Office of District collector, Old Customs House, Shahid Bhagat Singh Rd, Marg, Fort, Mumbai, Maharashtra 400001.
2. Copy to- (a)Deputy Commissioner(Women Development), Department of Development of Women and Child, Pune.
(b) Departmental Deputy Commissioner, Department of Women and Child, Konkan Division, Mumbai.
To know more contact us at [email protected]

Budget 2019

RELEVANT BUDGET HIGHLIGHTS

 

STARTUPS

  1. Tax Relief for Investors in Startups: Measures are proposed to carry forward and set off losses for startups & increase in period of exemption of capital gains from sale of residential house for investment in startups up to March 2021.
  2. Angel Tax Clarification: Startups and investors who file requisite declarations will not be subjected to any kind of scrutiny in respect of valuation of share premium. A mechanism of e-verification will be put in place and with this, the funds raised by startups will not require any angel tax scrutiny.
  3. Helping Skilled Entrepreneurs: 80 Livelihood business incubators and 20 technology business incubators to be set up in 2019-20 under ASPIRE to develop 75,000 skilled entrepreneurs in agro-rural industries.
  4. TV Channel: Finance Minister is to start a TV channel exclusively for start-ups.
  5. Social Enterprises Startups: Electronic funding platform for social enterprises is to give necessary impetus to the startups.

 

MSMEs

  1. Loan incentive to MSMEs: Government to provide INR 1 Crore loan to MSMEs.
  2. Incremental loans: In continuation to bolstering MSME sector growth, interest subvention of 2% has been announced for fresh or incremental loans.

 

TAX

  1. Angel Tax Relief for Cat II AIFs: Valuation of shares issued to Cat II AIFs shall also now be out of scrutiny of Income Tax evaluation (earlier it was only for Cat I AIF).
  2. TDS above 1 crore: The government proposes to levy TDS of 2% on cash withdrawal exceeding INR 1 Crore in a year from a bank account.
  3. Surcharge on Individuals: In view of rising income levels, a surcharge will be levied on individuals with taxable income of INR 2 to 5 Crore, and INR 5 Crore and above.
  4. Corporate Tax Rate: Lower rate of 25% corporate tax rate shall now be applicable to companies with a turnover of up to INR 400 Crore (increased from previous threshold of INR 250 Crore).

 

OTHERS

  1. PAN and AADHAR to be interchangeable: PAN and Aadhar to be interchangeable; now Aadhar can be quoted instead of PAN, wherever PAN is required. It is ok to not have a PAN.
  2. Labour Laws: Proposal to streamline multiple labour laws into a set of ‘four labour codes’.
  3. Rental Housing: Current archaic rental laws to be updated to assess relation between lessor and lessee in a fair manner.
  4. Annual Global Meet: The Government is contemplating organising an annual global meet to get all three sets of global players: Industrialists, corporate leaders, corporate sovereign and venture funds.
  5. Platform to Raise Capital: The Government proposes to work on a platform for listing social enterprises and voluntary organisations to raise capital as equity, debt or units like mutual fund.