Thank you for the opportunity to provide the essential details of employment law compliance for Bollman Hotels’ global expansion into India. Currently, Bollman Hotels, an organization with 25,000 employees, operates in Minneapolis, Minnesota. The transition to a global presence will begin by building upon the past success and experiences of the existing HR department (University of Phoenix, 2014). Unique challenges businesses encounter in India include inflexible labor laws, a convoluted system of central, state, and tribal justice, all within a corrupt and antiquated system (Ray, 2011). I will identify the appropriate laws for the expansion in India of 5,000 employees, possible penalties for lack of compliance, and recommend processes that will produce a compliant organization (University of Phoenix, 2014). Employment at will
The most significant difference between operating a business in the U.S. and India comes from the fact that employment at will remains unaccepted. Termination without cause is not allowed, and employees are entitled to a proscribed process of notice and severance pay. For business’ in excess of 100 employees, layoffs (retrenchment) require government permission. An employment contract or appointment letter will need to be on file for each employee. This document will contain the name and address of the establishment; the name, age, and address of the employee along with the name of the employees’ father; the title and nature of the work, and the salary. Inclusion of employee’s loyalty to the employer and non-disclosure sections in the contract limit the ability of the business to enforce any no-compete clause. The length of employment section records the start date, and that severance pay will be forfeit if the employee fails to give appropriate notice. Short of termination for cause, most likely criminal behavior, or medical disability, notice (one month) and severance pay will be expected for all employees (National Anti-Corruption Investigation Bureau, 2012). Labor laws
Whereas the U.S. has the Equal Employment Opportunity Commission (EEOC) to enforce employment laws (Cascio, 2013), India’s labor laws cite penal codes for the investigation, trial, and punishment of violations. According to the Government of India (2014), “there are forty-four labour related laws enacted by the Central Government dealing with minimum wages, accidental and social security benefits, occupational safety and health, conditions of employment, disciplinary action, formation of trade unions, industrail [sic] relations, etc.” Shops and Establishment Act
The Shops and Establishment Act covers various commercial establishments, residential hotels, restaurants, retail businesses, and will be the most specific labor law for a hotel. As state legislation, registration requirements and enforcement vary per state. This statute cites the state’s rules: working hours (nine hours/day and forty-eight hours/week), open and closing hours, minimum wage, annual leave, national and religious holidays, maternity and sick leave, and employment and termination of employment (Government of India, 2014). Bombay Shops and Establishment Act, 1948
The Bombay Shops and Establishment Act of 1948 covers greater Mumbai and requires registration with Form A for all establishments and a renewal with Form B yearly or every three years (National Anti-Corruption Investigation Bureau, 2012). Penalty for non-compliance can be a fine of 100 rupees per day and for false records up to 5,000 rupees. Delhi Shops and Establishment Act, 1954
The Delhi Shops and Establishment Act of 1954 covers the national capital territory of Delhi where registration is mandatory, annual renewal remains suspended since 1989. An application for an exception for extending work hours, opening on week off and National Holidays requires a list of employees and their designations that will work after regular hours, along with details of benefits, and employee signatures. The civil penalty for procedural failure can be a fine from twenty-five to 250 rupees while being found of criminal conduct carries a prison term of no more than three months (Government of NCT of Delhi, 2014). Maternity Benefit Act, 1961
Compliance for the Maternity Benefit Act of 1961 requires twelve weeks paid leave, per year for the birth of a child, having worked the compulsory 160 days in the prior twelve months. The penalty for being found guilty of refusing to give leave under the Maternity Act can be a fine of 2,000 to 5,000 rupees and imprisonment of three to twelve months (Government of India, 2014). Equal Remuneration Act, 1976
The Equal Remuneration Act of 1976 stipulates that no employer will pay in cash or at a lower rate that paid to workers of the opposite sex, and no discrimination against women shall be at time of recruitment. The penalty for the first offense will be a fine of 10,000 to 20,000 rupees and, or imprisonment of three to twelve months. A second offense carries a longer period of imprisonment, two years (Government of NCT of Delhi, 2014). Minimum Wage Act
Unlike the U.S., India does not set one minimum wage, but provides categories: skill level of work, type of business (lodging or lodging with meals), education levels (no college, some college, college degree), and a separate category for clerical and non-technical supervisory employees. The list of wages are updated annually and provided by the state (Government of NCT of Delhi, 2014). Sexual Harassment of Women in the Workplace (Prevention, Prohibition and Redressal) [sic] Act, 2013 The sexual harassment of women in the workplace statue not only works to protect women, but also directs the employer in the process of redress of complaints. Businesses are to establish a committee to develop and enact policy, and hear grievances. This Internal Complaints Committee is required to be a female from the senior staff, and fifty percent of the committee is to be women. The civil penalty for noncompliance results in a fine of 50,000 rupees. Being found guilty of a second offense can result in twice the level of punishment, and possibly the cancellation or non-renewal of business license (Government of NCT of Delhi, 2014). Weekly Holidays Act 1942
This act calls for all shops, restaurants and theatres to close one day of the week, giving employees one day off each week. The designated day cannot be altered more than once every three months. The penalty for the first offense is only 25 rupees, while the second and all subsequent offences are 250 rupees. Recommendations
Beyond the usual functions of the HR department in the U.S., additional record keeping will be required. An appointment letter for each employee will be necessary for all new hires. This contract outlines the relationship between employer and employee, but doesn’t give the employer the right to terminate at will. To end the relationship follow the process of written notice one month in advance and severance pay at termination. Regulation of opening and closing times require exact hours work be specific (National Anti-Corruption Investigation Bureau, 2012).
The Internal Complaints Committee called for in the Sexual Harassment of Women in the Workplace (Prevention, Prohibition and Redressal) [sic] Act, 2013, will need to operate outside of the HR department, and report directly to senior level staff. Working women in India encounter many of the same risk as women in the U.S., one cultural difference, laws governing factories go so far as to prohibit women from working nighttime hours. No such regulation exists for shops, hotels, and restaurants other than the designated closing times. Give special consideration when asking women to work beyond closing times if the hotel obtains the exemption during Shops and Establishment registration (Government of NCT of Delhi, 2014).
I hope these recommendations outline the differences that will need to be addressed as an HR department transitions into the market in India. If you have any further questions, please don’t hesitate to contact me directly.
Cascio, W. (2013). Managing human resources: Prodcutivity, quality of work life, profits. The McGraw-Hill Companies, Inc. Retrieved from the University of Phoenix ebook collection. Government of NCT of Delhi. (2014). Labour Department. Retrieved from http://www.delhi.gov.in/wps/wcm/connect/doit_labour/Labour/Home/ Government of India. (2014). Ministry of Labour and Employment. Retrieved from http:// labour.nic.in/content/ National Anti-Corruption Investigation Bureu. (2012). Labour laws in India. Retrieved from http://www.nacib.in/pdf/Labour%20Act.pdf Ray, G. (2011). Doing business in India: Opportunities and challenges. Journal of Marketing Development and Competitiveness, 5(4), 77-95. Retrieved from http://search.proquest.com/docview/902574950?accountid=458 University of Phoenix. (2014). Week two: Assignments: Employment law compliance plan: Atwood and Allen Consulting page. Retrived from University of Phoenix HRM/531 Human Capital Management coursework website.