Now IT start-up employees can claim benefits, such as provident fund


No employee can be denied these benefits as per the labour laws in the country. 

The employees of IT startups can now claim various benefits, which they were earlier not entitled to, such as provident fund, and the startups cannot deny such doles to their employees.

This announcement comes in the wake of recent large-scale layoffs and reduction in hiring by IT firms in India.

The Union Minister for Labour, Bandaru Dattatreya said in a written reply to a question in the Lok Sabha, that “The workers of IT startups and small-scale industries may avail of benefits of provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, the Employees’ State Insurance Act and social security schemes under the Unorganised Workers Social Security Act depending on eligibility.”

The Central Government has launched several schemes for salaried persons. However, to avail the benefits of these schemes, the organisations should be linked to these schemes and should be paying dues to its employees regularly. But many of the startups are not linked to these schemes because they have just started out and are currently utilising the funds raised to grow their businesses.

Also, one of the issues in startups is that about 90 per cent of them fail within five years of their operation and so employees face issues in availing the benefits of such schemes.

Before the startups grow and attain stability, the founders cannot even think about employee benefits. In the initial years, they focus on expansion of the business by raising funds. Providing employee benefits is the last of their priorities given the shortage of funds and need for expansion in the first five years. However, once they grow and stabilise, they can focus on employee benefits.

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