[India] Karnataka working on compliance law for manpower agencies

In India, the State Government of Karnataka is working on a law to get manpower suppliers to honour promised wages to their staff and comply with other statutory requirements including provident fund (PF) and worker state insurance coverage (ESI) subscriptions, The Economic Times reports.

The government is drafting the law because the majority of complaints it has received are directed at manpower business and labour laws in place at present have limited powers to manage them, labour minister Shivaram Hebbar told The Economic Times. The draft is expected to be ready in February.

Many firms are paying minimum wages solely on paper and are denying PF and ESI benefits, the minister said. Though blue-collar workers make up a significant percentage of the workforce, the labour division has lacked the authority to monitor their exploitation without an efficient law.

Kolar district in Karnataka was the scene of ugly riots in December 2020 after groups of workers broke windows, flipped cars and ransacked Wistron’s iPhone facility as a result of unpaid wages. 

The violence handicapped the facilities ability to offer a fast turnaround and also cast a spotlight on the way some manpower providers function.

Hebbar said the proposed law would require staffing firms to declare the number of individuals on their rolls and provide proof of statutory remittances together with PF and ESI each month in addition to the payment of wages.

Thousands of workers migrate from rural areas to cities, particularly Bengaluru, in the hope of an honest wage, however, many find themselves exploited, the minister said.

The proposed law - once vetted by the cabinet and cleared by the legislature - will reportedly step up surveillance and monitor malpractices within the staffing industry. The labour division will ask companies to report compliances online.

“We hope our new law will prevent exploitation of our labour class and bring about a transformational change,” Hebbar said.

According to an estimate, there are about 200 million unskilled and blue-collar staff in India, but a mere 4.5 million or so actually appear on the rolls of staffing corporations and are covered by PF and ESI. While 5-15 per cent of these workers are typically seen in the organised workforces of developed economies, in India they represent only 2 per cent.

Karnataka has several hundred manpower suppliers, including big-name players Quess Corp, TeamLease, First Meridian, Randstad, Manpower and Adecco.

Guruprasad Srinivasan - chief operating officer (India) at Quess Corp - said an industry-friendly legal framework could weed out unscrupulous players, increase transparency and improve the industry’s credibility, though there may be an additional compliance cost to companies.

Big firms have already moved to digital platforms and are well organised when it comes to statutory compliances, Srinivasan said, adding that the industry is happy to work with the government and offer insight.

Source: The Economic Times

(Quote via original reporting)

In India, the State Government of Karnataka is working on a law to get manpower suppliers to honour promised wages to their staff and comply with other statutory requirements including provident fund (PF) and worker state insurance coverage (ESI) subscriptions, The Economic Times reports.

The government is drafting the law because the majority of complaints it has received are directed at manpower business and labour laws in place at present have limited powers to manage them, labour minister Shivaram Hebbar told The Economic Times. The draft is expected to be ready in February.

Many firms are paying minimum wages solely on paper and are denying PF and ESI benefits, the minister said. Though blue-collar workers make up a significant percentage of the workforce, the labour division has lacked the authority to monitor their exploitation without an efficient law.

Kolar district in Karnataka was the scene of ugly riots in December 2020 after groups of workers broke windows, flipped cars and ransacked Wistron’s iPhone facility as a result of unpaid wages. 

The violence handicapped the facilities ability to offer a fast turnaround and also cast a spotlight on the way some manpower providers function.

Hebbar said the proposed law would require staffing firms to declare the number of individuals on their rolls and provide proof of statutory remittances together with PF and ESI each month in addition to the payment of wages.

Thousands of workers migrate from rural areas to cities, particularly Bengaluru, in the hope of an honest wage, however, many find themselves exploited, the minister said.

The proposed law - once vetted by the cabinet and cleared by the legislature - will reportedly step up surveillance and monitor malpractices within the staffing industry. The labour division will ask companies to report compliances online.

“We hope our new law will prevent exploitation of our labour class and bring about a transformational change,” Hebbar said.

According to an estimate, there are about 200 million unskilled and blue-collar staff in India, but a mere 4.5 million or so actually appear on the rolls of staffing corporations and are covered by PF and ESI. While 5-15 per cent of these workers are typically seen in the organised workforces of developed economies, in India they represent only 2 per cent.

Karnataka has several hundred manpower suppliers, including big-name players Quess Corp, TeamLease, First Meridian, Randstad, Manpower and Adecco.

Guruprasad Srinivasan - chief operating officer (India) at Quess Corp - said an industry-friendly legal framework could weed out unscrupulous players, increase transparency and improve the industry’s credibility, though there may be an additional compliance cost to companies.

Big firms have already moved to digital platforms and are well organised when it comes to statutory compliances, Srinivasan said, adding that the industry is happy to work with the government and offer insight.

Source: The Economic Times

(Quote via original reporting)