The Labour and Employment Ministry on January 24, took steps to relax labour-related compliance measures for start-ups, a week after Prime Minister Narendra Modi unveiled the Start-up India initiative.

The Ministry has decided to exempt start-ups from inspections related to key labour laws—including the Industrial Disputes Act, the Contract Labour Act, the Employees State Insurance Act, the Trade Union Act and the Employees Provident Fund and Miscellaneous Provisions Act—in a bid to dispel fear and encourage young entrepreneurs to start and grow businesses in India.

In a letter to all autonomous institutions such as the Employees’ Provident Fund Organisation (EPFO), Employee’s State Insurance Corp. and the Labour Commission, the ministry has asked them to desist from any unwanted interference related to Labour Law compliance in the functioning of start-ups.

“Promoting start-ups… would need special handholding and nurturing. Thus such start-ups, as defined by DIPP (Department of Industrial Policy and Promotion), may be allowed to self-certify compliance with the labour laws,” labour secretary Shankar Aggarwal said in the letter.

Both Modi and Finance Minister Arun Jaitley assured start-ups that the government will help enable their growth.

As per the Labour Ministry, start-ups will not be inspected in the first year of their establishment, and in the next two years, they will not be inspected until the central analysis and intelligence unit of the Labour Ministry verifies a written complaint and advocates any inspection.

Till that time, the start-ups will have to self-certify their compliance of Labour Laws and each of the concerned bodies of the Ministry will accept it. Following the Labour Ministry move, EPFO also wrote to all its field offices to take note of the development at the regional office level.

 Source: Mint

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