Compliance for Business Community amid of COVID19
We know that none of us are immune from fluctuation in our respective market segment due to COVID19 outbreak. Concern over the economic crisis due to COVID19 is at the core of countless conversations in the world today. There is a widespread anxiety for entrepreneurs in regards to key compliance that they need to maintain.
The Hon’ble Prime Minister of India, being Chairperson of National Disaster Management Authority, ( NDMC) has announced complete lock-down effecting from 25th March 2020 which is forcing many public and private organizations to scale down/shut-down their establishments/companies as per guidelines of the Central Government / State Government. The Coronavirus crisis has given new relevance to the legal term “Force Majeure".
Ministry of Corporate Affairs for the CAR (Company Affirmation of Readiness towards Covid-19) form
All companies and LLPs are required to report their compliance with all the guidelines issued by the public health authorities (like work from home) using Form CAR. The form is a simple ‘Yes / No’ on adoption of work from home policies. The intention of this form could be to enable the Government of India to collect data in relation to the approach followed by companies / LLPs to enable them to implement further steps to combat the spread of virus.
Relaxation from ESIC & PF Remittance
The ESI contribution for the month of February, 2020 & March 2020 can be filed & paid up to 15th April, 2020 & 15th May 2020 instead of 15th March, 2020 & 15th April, 2020 respectively. Similarly, GOI had communicated to the EPFO that the contribution of both -the employer and the employee- for the next three months, shall be paid by GOI. This shall benefit all those establishments having employed up to 100 employees and about 90 per cent of which earn ₹15,000 per month
Additional filing fees waived
There will be a moratorium from 1 April 2020 to 30 September 2020 (Moratorium Period) on levying any late/ additional fees upon filings of any returns, statements, documents etc. by companies or LLPs on the MCA portal irrespective of the due date of such filings. The benefit of this moratorium will be available not only for those forms and returns which are due during the Moratorium Period but also for those which were already due prior to the Moratorium Period. The benefit of this relaxation can be availed by existing defaulting companies. This would lead to a reduction of not only the compliance burden but also the financial burden.
Work From Home - The MCA has strongly advised all companies and limited liability partnerships (LLP) to immediately implement a work from home policy with respect to their employees until 31 March 2020.
Auditor's Report - The MCA has now postponed the applicability of Companies (Auditor's Report) Order, 2020 (CARO 2020) to the financial year 2020-21. This will significantly reduce the burden on the companies and its auditors to deal with more than 25 additional checks introduced under CARO 2020.
Declaration of Commencement of Business:
MCA has extended the timeline for new established companies to comply Form 20-A to 1 year from 6 months from the date of incorporation.
Not to invoke Industrial Dispute Act, 1947 for layoff, retrenchment or closure, Reduce wages -
The Government of India and State governments have called upon employers not to terminate, call for Layoff, to pay Wages without any cut during the lockdown period. This is not exclusively to the permanent worker or labour additionally to contract laborers and inter-State migrant workers. On philanthropic grounds, there can be no two opinions about the need to pay wages to workers. However, whether such an obligation should be that of private employers or that of the State needs to be considered.
Entrepreneurs & the business community need to treat the lockdown period as duty and pay the wages without any reduction or adjustment. Not resort to salary restructure or payment of reduced wages.
“Workers and businesses are facing catastrophe, in both developed and developing economies... We have to move fast, decisively, and together. The right, urgent, measures, could make the difference between survival and collapse."
In Guy Ryder, ILO’s Director-General, words
In the current COVID19 lockdown scenario, the relaxations granted by MCA can be appreciated by financial burden to bear the cost of the employee on the account of No work No Pay is challenging & debateable. Yes, Industry demands some kind of economic package to survive this crisis but for that every entity & individual needs to cope up with the GOI.
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