Today I came across two very interesting pieces of legislation that almost all Companies, LLPs, even sole proprietors having a decent scale of business will need to comply to in order to do business in Maharashtra. The first one applies only if you have more than 50 employees – it’s called “Maharashtra Workmen’s Minimum House-Rent Allowance Rules, 1990”.

Maharashtra Workmen’s Minimum House-Rent Allowance Rules

Under this Act, any employee at a factory, or any establishment – which includes anything from a shop to a hospital or call centre, employing more than 50 employees, have to give a house rent of at least 5% of the basic dearness allowance to each employee? This allowance has to be paid every month. If the employer does not pay this amount, an employee can approach the Controlling Authority under this Act, and the authority will compel the employer to pay.

That means, if your employer is not paying you house rent at 5% of your wages, you can take it up – even at the time when you are leaving the job (if it is difficult to do so while you are working at the job) and recover all the dues at once, at least for the last one year.

For contravention of this law intentionally, an employer can be imprisoned for up to 1 year. For non-compliance, such as not maintaining requisite registers, an employer can be punished with a maximum of 6 months imprisonment.

If anyone needs more info or advice for this purpose, do drop me a mail.

The second law is more general and applies to almost anyone who wants to hire security guards through an agency. If you hire any security guards, even one, you need to register under this law.

Why do you need to register under Maharashtra Private Security Guards (Registration of Employment and Welfare) Act?

Any employer employing private security guards in a factory or an establishment, which includes shops, offices, warehouses, service centres or any sort of place for trade and business is required to register with the Security Guards Board in Maharashtra, under Rule 13(1) of Maharashtra Private Security Guards (Registration of Employment and Welfare) Scheme, 2002 which is framed under the Maharashtra Private Security Guards (Registration of Employment and Welfare) Act of 1981. According to the Act, this registration is required for every Principal Employer who engages registered security guards through the board, or security guards of an employer agency whose guards are granted exemption by the Government. An employer can be punished with imprisonment for a term of three months or with fine up to Rs. 500 or both for contravention of this provision under Rule 42 of the scheme mentioned above.

On the other hand, the scheme also stipulates that someone who registers with the board must take security guards only from the board and not through private arrangements or agencies. This has been confusing many employers and has been a source of litigation too.

Registration procedure with board

The Principal Employer needs to submit a filled-in registration form (Form A) prescribed by the Board along with a registration fee of Rs. 1,000 before the Board. After scrutiny of such form, Board grants a registration number. After receiving such registration number, Principal Employer can put their requisitions with the board for required number of guards at specific premises.

How does the private security agencies remaining in business then?

In practice, the government of Maharashtra is willing to exempt an agency which is offering better terms of employment to its security guards from operation of the Act and any rules or scheme under the Act. This is how most of the private security guard agencies are functioning in Mumbai at present.

Options for hiring security guards, there are three routes you can take:

1. Employ guards directly – as employees
2. Register with guard board and appoint through them.
3. If you don’t want to appoint through the guard board, and will like to appoint guards from an agency of your choice, the agency of your choice will first obtain a consent letter from you, based on which they will contact the labour ministry and obtain an exemption. If you register with the guard board once, however, this route is closed to you.