With fears of mass layoffs, delayed salaries and pay deductions clouding the business world, the Employees Provident Fund Organisation (EPFO) and Employees State Insurance Corporation (ESIC) has decided to keep a record of all such development.
The two bodies, under the labour ministry, will prepare a report and present it to the Prime Minister’s Office (PMO). A government official told ET that the data collected will give insights on the worst-affected sectors and the employees impacted by the closure of establishments.
The target group for these exercises is fairly large as EPFO has over 60 Mn subscribers, including pensioners, and ESIC has over 30 Mn subscribers. However, there are also some overlaps between the two data sets.
As per an ET report, the government officials have already started compiling the data, keeping an eye on company changes in April and May. As salaries are usually paid on the last days of the month or the seventh of the next month.
The labour ministry has also set up over 20 call centres to record and resolve workers’ grievances related to salary cuts and job losses. Meanwhile, Regional EPFO offices have also been asked to reach out to subscribers through calls.
While layoffs became a trend in 2019 and early 2020 as several big names in the Indian startup ecosystem were running the race for profitability, in 2020 it has become a necessity for the segment to survive. The economy is strained with no easy way out. Therefore, the companies are either resorting to layoffs, furloughs or salary deductions to keep themselves afloat.
The biggest example of this trend is hotel and hospitality company OYO, which laid off close to 3,000 employees of its total Indian workforce of 12,000 in late 2019 and early 2020. Three months later, the route to profitability has gotten longer as the company has recorded a 50% to 60% decline in its revenues. But this has forced OYO to send thousands of its employees on unpaid leaves or furloughs. This round has effected OYO employees in the US and other countries. The company has confirmed that it would not be taking any such action for its employees in India.
Meanwhile, another budget hotel chain Treebo has asked its employees to take voluntary resignations. However, the company has also launched a Paid Voluntary Resignation Scheme (PVRS). Under this, employees can resign and get one month’s pay.
Lending startups, on the other hand, are not just hit by the lockdown but by RBI’s three-month moratorium on term loans as well. Startups like IndiaLends and CreditMate have had to resort to salary deductions to keep the company afloat. Transportations startup Shuttl has laid off 40 employees as well.