Dear sir,
If no employee has worked in April 2020 due to the lockdown and no employee receives a salary for the month of April 2020, should we file a Nil Return (Nil Contribution) for that particular month (i.e., April 2020) in PF & ESI until the lockdown is lifted?
Please advise, sir.
From India, Hyderabad
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33If no employee has worked in April 2020 due to the lockdown and no employee receives a salary for the month of April 2020, should we file a Nil Return (Nil Contribution) for that particular month (i.e., April 2020) in PF & ESI until the lockdown is lifted?
Please advise, sir.
From India, Hyderabad
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Employers have to pay wages and salary as per the government guidelines for payment during the lockdown period. When there is a wage component, PF contribution would be zero. If you are not paying any salary for the lockdown period, then PF and ESI contributions would be zero.
Please let me know if you need any further assistance.
From India, Mumbai
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Please let me know if you need any further assistance.
From India, Mumbai
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It is true that the employer has to pay the full salary during the lockdown period. But if the employer fails to generate revenue, how can he pay the salary? The instruction given by the government following the provisions of the Disaster Management Act has been challenged in the Supreme Court, and the court has asked the government why the direction asking the private employers to pay full wages should not be stayed. In effect, the court is convinced that the government cannot direct the employers to pay full wages during the lockdown period. True, if the employers don't pay, the very objective of the lockdown, i.e., making the people stay at home, would be defeated.
Please follow the link: [Madhu T K: Liability of employers to pay salary during COVID-19 lockdown period](http://madhu-t-k.blogspot.com/2020/04/liability-of-employers-to-pay-salary.html)
From India, Kannur
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Please follow the link: [Madhu T K: Liability of employers to pay salary during COVID-19 lockdown period](http://madhu-t-k.blogspot.com/2020/04/liability-of-employers-to-pay-salary.html)
From India, Kannur
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Sir, What should be write in NCP days in PF and No. of Days in ESI in lockdown period when no employee came to office but salary has given to employee ? Jai Hind
From India, Delhi
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From India, Delhi
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No of days for which salary has been paid is the days worked to be shown in ESI. If you have paid salary for the entire month, i.e., 31 days, put that. In the PF records, the NCP refers to non-contributory days, and if you have paid full salary, obviously, it should be zero.
The lockdown period salary shall be taken as salary paid during any leave days. Naturally, if a person is on leave with pay, what you will do in the ESI and PF records shall apply in lockdown cases also. ESI or PF authorities are not concerned about your leave policies but they are concerned only about days for which wages have been paid. If paid, take it as days worked or paid leave days, and if not paid, take it as unpaid leave days.
From India, Kannur
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The lockdown period salary shall be taken as salary paid during any leave days. Naturally, if a person is on leave with pay, what you will do in the ESI and PF records shall apply in lockdown cases also. ESI or PF authorities are not concerned about your leave policies but they are concerned only about days for which wages have been paid. If paid, take it as days worked or paid leave days, and if not paid, take it as unpaid leave days.
From India, Kannur
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Sir, What should be write in NCP days in PF and No. of Days in ESI for lockdown period. We have paid 40% and 50% salary. Should it be 0 days or calcute no. of days according to salary paid ? Jai Hind
From India, Delhi
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From India, Delhi
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Even if you have paid 40% or 50%, you can make it full attendance with 40% or 50%, as the case may be, as salary paid. Neither ESI nor EPF can object to why you have paid lesser pay. Putting full attendance will make the employees qualify for various other benefits based on attendance.
The lockdown period is allowed as a special leave other than regular CL or PL. The value of the leave days can be decided by the employer. It can be 100%, 40%, or 50%. The EPF authorities cannot enforce Section 12 of the EPF & MP Act, which states that employers should not reduce the salary of employees. This issue is known to everyone, and even the Supreme Court has stated that the salary part during the lockdown period should be decided by the employer. If you have decided to pay only 40%, that is final.
From India, Kannur
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The lockdown period is allowed as a special leave other than regular CL or PL. The value of the leave days can be decided by the employer. It can be 100%, 40%, or 50%. The EPF authorities cannot enforce Section 12 of the EPF & MP Act, which states that employers should not reduce the salary of employees. This issue is known to everyone, and even the Supreme Court has stated that the salary part during the lockdown period should be decided by the employer. If you have decided to pay only 40%, that is final.
From India, Kannur
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Dear Friends,
I would like to add the following:
Whatever you decide to pay during the lockdown, I suggest you have it in writing in the form of a memorandum of settlement, get it registered, and submit a copy of it to the Honorable Supreme Court. This is in accordance with the guidelines/directives given by the Honorable Supreme Court in its interim order in Ficus Pax and others.
When you decide to pay for the days not worked by employees during the lockdown, it should not be treated as wages or salary. Wages or salary are due for working days or paid leave days. In the present circumstances, you are paying the amount against no work done by the employees as per the MHA directives. When it is not treated as wages or salary and is considered as Covid Ex-gratia pay, PF will not be attracted to it, but ESI will be attracted if you pay it on a monthly or bi-monthly basis.
In the case of wage/salary against work done during the lockdown and thereafter, if you decide to reduce the amount, in this case, I also advise you to have a memorandum of settlement duly registered as per the guidelines/directives given by the Honorable Supreme Court. Whatever amount you decide here will be treated as wage/salary, and both PF and ESI will be attracted to it, if applicable. No authority can object to the reduced salary since it is in line with the guidelines/directives given by the Honorable Supreme Court. In this case, you will show the actual days of work or actual days paid. So in the working of PF and ESI, there won't be any questions regarding days worked or NCD.
In my opinion, it is a golden opportunity to settle the dispute of payment during the lockdown as per the guidelines/directives given by the Honorable Supreme Court. Tomorrow, whatever the final decision is in the matters before the Honorable Supreme Court, you are protected by the memorandum of settlement as stated above, and there will be no impact of the judgment on you, as I see it at this moment.
These are my views based on my study.
Seniors and experts can comment on it.
From India, Mumbai
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I would like to add the following:
Whatever you decide to pay during the lockdown, I suggest you have it in writing in the form of a memorandum of settlement, get it registered, and submit a copy of it to the Honorable Supreme Court. This is in accordance with the guidelines/directives given by the Honorable Supreme Court in its interim order in Ficus Pax and others.
When you decide to pay for the days not worked by employees during the lockdown, it should not be treated as wages or salary. Wages or salary are due for working days or paid leave days. In the present circumstances, you are paying the amount against no work done by the employees as per the MHA directives. When it is not treated as wages or salary and is considered as Covid Ex-gratia pay, PF will not be attracted to it, but ESI will be attracted if you pay it on a monthly or bi-monthly basis.
In the case of wage/salary against work done during the lockdown and thereafter, if you decide to reduce the amount, in this case, I also advise you to have a memorandum of settlement duly registered as per the guidelines/directives given by the Honorable Supreme Court. Whatever amount you decide here will be treated as wage/salary, and both PF and ESI will be attracted to it, if applicable. No authority can object to the reduced salary since it is in line with the guidelines/directives given by the Honorable Supreme Court. In this case, you will show the actual days of work or actual days paid. So in the working of PF and ESI, there won't be any questions regarding days worked or NCD.
In my opinion, it is a golden opportunity to settle the dispute of payment during the lockdown as per the guidelines/directives given by the Honorable Supreme Court. Tomorrow, whatever the final decision is in the matters before the Honorable Supreme Court, you are protected by the memorandum of settlement as stated above, and there will be no impact of the judgment on you, as I see it at this moment.
These are my views based on my study.
Seniors and experts can comment on it.
From India, Mumbai
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@Madhu.T.K
Sir, can the lockdown days be considered as paid leave for previous years when full salary is paid? (Since the lockdown was for almost 60 days.)
Should the companies (both Shop & Estb. and Factory Act-related companies) need any document for granting this as paid leave.
From India, Visakhapatnam
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Sir, can the lockdown days be considered as paid leave for previous years when full salary is paid? (Since the lockdown was for almost 60 days.)
Should the companies (both Shop & Estb. and Factory Act-related companies) need any document for granting this as paid leave.
From India, Visakhapatnam
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I did not understand your query clearly. Let me respond based on an assumption.
This year, in 2020, you have been granted 60 days of paid leave due to the lockdown.
As we move into January 2021, when determining eligibility for annual leave/ paid leave/ earned leave (PL/EL), can these 60 days allowed as paid leave in 2020 be considered as days worked?
YES, because any paid leave will be considered as days worked for all purposes, including leave eligibility and even for gratuity. In order to be eligible for leave, an employee must complete at least 240 days. Therefore, the lockdown period should indeed be counted as days worked for this purpose. Since the number of leaves earned in 2021 will be based on the actual days an employee is physically present, these 60 days will not be counted towards the total number of leaves earned. To clarify, for ELIGIBILITY (determining whether an employee is eligible for leaves, i.e., for the 240-day requirement), all paid leaves will be counted as days worked, but leaves will only be earned for the actual days worked or physically present. Consequently, the number of leaves each employee earns in 2021 will be lower than in a typical year.
The guidelines regarding eligibility and the earning of leaves based on the number of physical working days are clearly outlined in the Act; no additional documentation is required for this. However, if you wish to allocate leaves for the lockdown period as well, you may consider documenting it.
I hope I have correctly understood your question. If not, please inform us.
From India, Kannur
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This year, in 2020, you have been granted 60 days of paid leave due to the lockdown.
As we move into January 2021, when determining eligibility for annual leave/ paid leave/ earned leave (PL/EL), can these 60 days allowed as paid leave in 2020 be considered as days worked?
YES, because any paid leave will be considered as days worked for all purposes, including leave eligibility and even for gratuity. In order to be eligible for leave, an employee must complete at least 240 days. Therefore, the lockdown period should indeed be counted as days worked for this purpose. Since the number of leaves earned in 2021 will be based on the actual days an employee is physically present, these 60 days will not be counted towards the total number of leaves earned. To clarify, for ELIGIBILITY (determining whether an employee is eligible for leaves, i.e., for the 240-day requirement), all paid leaves will be counted as days worked, but leaves will only be earned for the actual days worked or physically present. Consequently, the number of leaves each employee earns in 2021 will be lower than in a typical year.
The guidelines regarding eligibility and the earning of leaves based on the number of physical working days are clearly outlined in the Act; no additional documentation is required for this. However, if you wish to allocate leaves for the lockdown period as well, you may consider documenting it.
I hope I have correctly understood your question. If not, please inform us.
From India, Kannur
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MHA notification mandates payment of salary for the lockdown period, so there is no question of non-payment of salary. According to the latest Supreme Court judgment, the only option the employer has is to negotiate.
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Dear Babebethmani,
The MHA notification mandates the payment of salaries up to 17.05.2020. Various writ petitions have been filed before the Hon'ble Supreme Court challenging this notification. An interim order has been granted with some guidelines for the settlement of lockdown wages. This presents an opportunity for employers to settle the lockdown wages, as it mentions 'which can be availed by...'. Personally, I view this as a golden opportunity for employers to address the issue of lockdown wages.
Thank you.
From India, Mumbai
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The MHA notification mandates the payment of salaries up to 17.05.2020. Various writ petitions have been filed before the Hon'ble Supreme Court challenging this notification. An interim order has been granted with some guidelines for the settlement of lockdown wages. This presents an opportunity for employers to settle the lockdown wages, as it mentions 'which can be availed by...'. Personally, I view this as a golden opportunity for employers to address the issue of lockdown wages.
Thank you.
From India, Mumbai
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@Madhu.T.K
Sir, Though my doubt was different, still I thank you for imparting your knowledge as I do not have much knowledge, and hence, have lots of doubts.
1. If eligibility of 240 days is not served, then does the employee get Paid Leave (PL)?
2. Actual Doubt: If I have accumulated 15 PL each for the past 4 years, totaling 60 PL, will my company count the lockdown period as me utilizing all my PL and having a PL balance of 0?
3. If I want to use any accumulated PL, how should I ask the company regarding it? For example, if an employee takes a 10-day leave for some personal issue without asking for any written permission and later asks management to deduct only 5 days' salary from these 10 days of leave, will the other 5 days be considered as PL? Should the company need any document from me to ask for these 5 days as PL, or can it just enter it as PL in its attendance register?
4. Side Question: Which leaves does the employer have to pay for to the employee (Considering both Shop & Estb. and Factory Act related companies)? Can the employer give me all PL instead of any Casual Leave (CL)? Should PL start only after the exhaustion of CL?
5. Another Side Question: Should the employer pay PF/ESI to daily wage workers who come randomly when required, where the daily wages range from 700 to 1000?
Sir, I hope I am not troubling you with too many doubts. Your help is very much appreciated, sir.
From India, Visakhapatnam
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Sir, Though my doubt was different, still I thank you for imparting your knowledge as I do not have much knowledge, and hence, have lots of doubts.
1. If eligibility of 240 days is not served, then does the employee get Paid Leave (PL)?
2. Actual Doubt: If I have accumulated 15 PL each for the past 4 years, totaling 60 PL, will my company count the lockdown period as me utilizing all my PL and having a PL balance of 0?
3. If I want to use any accumulated PL, how should I ask the company regarding it? For example, if an employee takes a 10-day leave for some personal issue without asking for any written permission and later asks management to deduct only 5 days' salary from these 10 days of leave, will the other 5 days be considered as PL? Should the company need any document from me to ask for these 5 days as PL, or can it just enter it as PL in its attendance register?
4. Side Question: Which leaves does the employer have to pay for to the employee (Considering both Shop & Estb. and Factory Act related companies)? Can the employer give me all PL instead of any Casual Leave (CL)? Should PL start only after the exhaustion of CL?
5. Another Side Question: Should the employer pay PF/ESI to daily wage workers who come randomly when required, where the daily wages range from 700 to 1000?
Sir, I hope I am not troubling you with too many doubts. Your help is very much appreciated, sir.
From India, Visakhapatnam
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If 240 days of work are not completed, he will not be entitled to any leave. This means that if he has not worked for 240 days in 2020, he will not receive any paid leave in 2021. The 240 days include all paid holidays and paid days. If the company has paid 60 days of lockdown wages, those days will be considered as days worked and will be included in the 240-day requirement. However, the calculation of paid leave earned in 2021 will be based on actual days physically present for work, excluding holidays, leave days, and lockdown days.
Regarding the adjustment of paid leave during the lockdown period, it depends on the company's policy. Some companies require employees to surrender at least 50% of their accumulated leave, while others mandate surrendering 25%. Some companies have decided that the salary paid during the lockdown does not need to be compensated by surrendering leave days.
The procedure for availing paid leave in our company involves submitting a prescribed leave form. This document serves as an official request for leave, which needs to be approved. Employees can choose to debit 10 days of leave and take the remaining days as unpaid if they wish.
For consecutive days of absence, paid leave will be deducted, while for a single-day absence, casual leave will be deducted.
Daily rated employees are entitled to Employee State Insurance (ESI) and Provident Fund (PF) benefits. However, if the notional wages or the wages that would have been payable had they worked for 26 days exceed Rs 21,000 and Rs 15,000 respectively for ESI and EPF, they can be exempted from these deductions.
From India, Kannur
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Regarding the adjustment of paid leave during the lockdown period, it depends on the company's policy. Some companies require employees to surrender at least 50% of their accumulated leave, while others mandate surrendering 25%. Some companies have decided that the salary paid during the lockdown does not need to be compensated by surrendering leave days.
The procedure for availing paid leave in our company involves submitting a prescribed leave form. This document serves as an official request for leave, which needs to be approved. Employees can choose to debit 10 days of leave and take the remaining days as unpaid if they wish.
For consecutive days of absence, paid leave will be deducted, while for a single-day absence, casual leave will be deducted.
Daily rated employees are entitled to Employee State Insurance (ESI) and Provident Fund (PF) benefits. However, if the notional wages or the wages that would have been payable had they worked for 26 days exceed Rs 21,000 and Rs 15,000 respectively for ESI and EPF, they can be exempted from these deductions.
From India, Kannur
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