Equal Remuneration Compliance Declaration

An Equal Remuneration Compliance Declaration in India provides a signed declaration of the matters it covers, creating a record the recipient can rely on.

The Equal Remuneration Act 1976 was enacted to give effect to the constitutional mandate under Article 39(d) of the Directive Principles of State Policy, which directs the State to secure equal pay for equal work for both men and women. Section 4 of the Act requires every employer to pay equal remuneration to male and female workers performing the same work or work of a similar nature. 'Remuneration' under Section 2(g) of the Act is broadly defined to include basic wage, dearness allowance, and any additional emoluments payable directly or indirectly to a worker for work performed. 'Same work or work of a similar nature' means work where the skill, effort, and responsibility required are the same when performed under similar working conditions.

Section 5 of the Equal Remuneration Act 1976 extends the prohibition of sex-based discrimination beyond wages to all conditions of service — recruitment, promotion, training, and transfer. An employer cannot refuse to consider a female candidate for a role on the ground that the work has traditionally been performed by males, unless employment of women in that type of work is prohibited or restricted by applicable law (such as certain restrictions under the Factories Act 1948 for night work, though these are progressively being relaxed by state amendments).

The Equal Remuneration Act 1976 is one of the four labour laws consolidated into the Code on Wages 2019, which was passed by Parliament and received Presidential assent in August 2019. The Code on Wages 2019 re-enacts the equal remuneration principle under Section 3, expanding its scope to all employees (including those in the unorganised sector). However, until state governments notify their rules under the Code, the Equal Remuneration Act 1976 continues to govern most establishments. Employers subject to the Code on Wages (Central) Rules 2021 must confirm their practices are compatible with both the existing Act and the forthcoming Code framework.

For large listed companies, the SEBI Business Responsibility and Sustainability Reporting (BRSR) framework — mandatory for the top 1,000 listed companies from FY 2022-23 — requires disclosure of the ratio of remuneration of female workers to male workers (permanent and non-permanent). This ESG disclosure requirement has elevated equal remuneration compliance from a regulatory obligation to a board-level governance issue at major Indian corporations.

An Equal Remuneration Compliance Declaration is required in several regulatory, audit, and governance contexts for employers operating in India.

During a labour law inspection by an Inspector appointed under Section 9 of the Equal Remuneration Act 1976, the employer must be prepared to demonstrate compliance — producing the registers maintained under Section 8 of the Act (Form D, listing workers employed in each category), wage records, and evidence of non-discrimination in recruitment and promotion. A compliance declaration, supported by documentation, demonstrates proactive compliance and reduces inspection risk.

For ISO certification, SA8000 (Social Accountability) certification, or other ESG audits conducted by third-party auditors on behalf of multinational clients or buyers, Indian manufacturers and service providers must demonstrate equal remuneration compliance as part of the social compliance audit. The declaration, supported by payroll data, forms a key part of the audit evidence package.

When tendering for government contracts, particularly contracts under Central Public Sector Undertakings or state government departments that require labour law compliance certificates, vendors must certify compliance with the Equal Remuneration Act 1976. The declaration serves as this compliance certificate.

For SEBI BRSR reporting, companies in the top 1,000 listed entities on BSE or NSE must disclose the male-to-female remuneration ratio under the 'Social' pillar of the BRSR. The declaration, supported by payroll analytics, provides the factual basis for this mandatory disclosure. Non-compliant companies face reputational risk and potential SEBI inquiry.

When a company is acquired, merged, or undergoes due diligence — particularly by PE/VC investors or strategic acquirers with ESG mandates — labour law compliance including equal remuneration is reviewed as part of the HR compliance diligence. The compliance declaration provides documentary evidence for the data room.

For establishments that receive complaints of wage discrimination from female employees — either through internal HR complaints, the Internal Complaints Committee (ICC) under the POSH Act 2013, or through a complaint to the Authority under Section 7 of the Equal Remuneration Act — a formal compliance review and updated declaration demonstrates the employer's commitment to addressing the issue and taking corrective action.

An Equal Remuneration Compliance Declaration must cover all material aspects of the Equal Remuneration Act 1976 obligations to be legally effective and useful for audit and inspection purposes.

Establishment details must identify the employer's legal name, trade name, address of the establishment, nature of business or industry, and the applicable registration under the Shops and Establishments Act, Factories Act 1948, or other applicable legislation. The declaration must identify the geographical scope — whether it covers a single establishment, a state-wide operation, or the entire company nationally.

Compliance certification on equal remuneration under Section 4 must certify that the employer pays equal remuneration to male and female workers for the same work or work of a similar nature as defined under Section 2(h) of the Equal Remuneration Act 1976. The certification should confirm that wage structures, pay scales, allowances, and other remuneration components do not differentiate between male and female workers performing equivalent work.

Non-discrimination certification under Section 5 must certify that the employer does not discriminate against female candidates or employees in: recruitment procedures and selection criteria; terms of initial employment (designation, grade, pay scale); opportunities for promotion, training, and skill development; transfer policies; and conditions of service generally. Any exceptions permitted by law (such as restrictions on female employment in specific hazardous processes under the Factories Act) should be noted.

Register maintenance confirmation under Section 8 must confirm that the employer maintains the register prescribed under the Equal Remuneration Rules 1976 — Form D (Register of Workers Employed in Each Category of Work) — showing for each category: the work performed, the number of male and female workers employed, and the remuneration paid. The register must be available for inspection by the Inspector appointed under Section 9 of the Act.

Gender pay gap data, while not mandatory under the Equal Remuneration Act 1976 itself, should be annexed to the declaration for BRSR-reporting companies and ESG audit purposes. The data should show the median male and female remuneration by job band or category, any gaps identified, and the actions taken or planned to close material gaps.

Signatory authority must be a responsible officer of the employer — typically the Managing Director, CEO, CHRO, or Head of HR — who is authorised to make the certification on behalf of the company. The declaration must be dated and should reference the period it covers (typically the current financial year).

Review and update commitment should note that the declaration will be reviewed annually and updated whenever significant changes in workforce composition, wage structures, or organisational policies occur. Periodic pay equity audits conducted by an independent HR consultant or chartered accountant strengthen the credibility of the declaration.

Additional compliance elements for a Equal Remuneration Compliance Declaration used in India include: This declaration is governed by the labour statute it certifies compliance with, read with the applicable state Shops and Establishments Act; declarations made before an authority carry evidentiary value under the Bharatiya Sakshya Adhiniyam (BSA) 2023. Forms-legal.com provides this template as a starting point for India-compliant documentation.