This comes at a time when various companies are looking at layoffs. At least four corporates that ET spoke to are contemplating to cut their temporary workforce by 40-60% in April to rein in costs amid uncertainty due to the Covid-19 pandemic. These numbers are even higher in the insurance, retail and hospitality sectors which don’t expect any uptick even after the lockdown is gradually lifted.
To incentivise firms to keep these staffers on rolls, ISF has pleaded the ministry to slash provident fund contributions for both the employer and employee by half to 6%, not raise minimum wages for next 12 months and rejig the GST slab for employment services industry from 18% to 5%, among other suggestions.
“The Covid-19 pandemic has put our country in a lockdown and several industries who are principal employers are unable to put these employees to productive work,” said Lohit Bhatia, president at Indian Staffing Federation. “The implications are hitting severely as livelihoods are unsustainable any further as employment are lost by thousands.”
A large portion of these workers are already out of jobs and finding ways to get back to their hometown. On Wednesday, around 1,500 daily wage labourers gathered at suburban Bandra (West) railway station and pleaded the authorities that they be allowed to go back home in the absence of work.
“Even as the situation gradually starts settling down in May, the scale of operations we would be operating in would be at least 30-40% lower than February,” said a founder of a top technology company. ISF, however, believes that with the ease of certain regulations during this period will help incentivise corporates to relook the numbers.
ISF’s 100 members claim that their staffing agencies pay monthly salaries of Rs 1,800 crore to contract workforce in India.
While these executives are often termed as off-roll employees, lawyers say the Contract Labour Act holds the principal employer liable for any non-payment of wages by a contractor to such employees.
“This provision has prompted several large companies to evaluate their compliances and legal liability towards these temporary workers especially in the retail, insurance, and the hospitality space…Labours laws in India are welfare legislation and therefore it is advisable that large companies do carry out their analysis well,” said Dipti Lavya Swain, Partner, HSA Advocates.