The Disabilities Act in India: What Employers Need to Know

By Dezan Shira & Associates

Posted: 15th January 2018 08:11

The Rights of Persons with Disabilities Act, 2016 along with the Rules (for implementation) have recently been enacted by the federal government. The new law protects disabled persons in India from various forms of discrimination, ensures their access to equal employment opportunities, and enhances their societal participation.

The Disabilities Act of 2016 is in accordance with the principles codified in the United Nations Convention on the Rights of Persons with Disabilities, and replaces the previous legislation – Persons with Disabilities (Equal Opportunity Protection of Rights and Full Participation) Act of 1995.

This article highlights the key features of the new law and identifies its impact on doing business in India.

Salient aspects of the Disabilities Act, 2016
The definition of a ‘disabled person’ is broadened under the 2016 Act: it covers persons with disability, persons with benchmark disability, and persons with disability having high support needs. This definition is inclusive and categorizes 21 types of disabilities as ‘specific disabilities’.

The Act applies to government establishments as well as private establishments. Under the law, private establishments refer to a company, firm, cooperative or other society, associations, trust, agency, institution, organization, union, factory, or such other establishment specified by the government.

The Act requires all establishments to frame and publish an Equal Opportunities Policy. All forms of discrimination against persons with disabilities are prohibited, unless it can be proved that such discrimination is proportionate in nature and a necessary means of achieving legitimate purposes.

The Act provides additional benefits for persons with benchmark disabilities, such as employment vacancies in government establishments, education opportunities, land allocation, and poverty alleviation schemes, among others.

In order to ensure speedy justice, special courts are instituted in each district to deal with cases pertaining to the violation of the rights of disabled persons. Penalties for the violation of rights of disabled persons can extend to a monetary fine of US$7,750 (Rs 500,000) and imprisonment for up to five years.

Key compliances under the Disabilities Act
Although the majority of the compliances under the Act apply exclusively to government establishments, private establishments are also covered under the purview of the Act and must comply with the following requirements:
Impact on doing business in India

Compliance with the Disabilities Act will naturally involve revamping internal recruitment policies. For instance, the company’s human resource (HR) team must be careful to incorporate policies designed to benefit disabled persons. Further, firms can increase their profitability by strategically aligning their policies to suit the special needs of disabled persons.

In recent years, several private firms in India operating in the IT and services sector have been hiring disabled persons to fill various vacancies. In many instances, such hiring practices not only fulfil ethical compliances but also make sense from a business perspective. HR managers have identified several benefits of hiring disabled persons. Firms like IBM, Coca Cola, Google, and Lemon Tree Hotels have developed dynamic workplaces after reforming hiring practices. 

The Act also provides firms with an additional avenue of fulfilling their corporate social responsibility (CSR) activities. Firms can deploy more financial resources towards mandatory CSR schemes by providing benefits to disabled persons.

Hiring and retaining disabled persons is an important ethical compliance, and HR managers must ensure that the workplace and company policies are conducive to a healthy work environment for disabled persons.
This article was first published on India Briefing.

Since its establishment in 1992, Dezan Shira & Associates has been guiding foreign clients through Asia’s complex regulatory environment and assisting them with all aspects of legal, accounting, tax, internal control, HR, payroll, and audit matters. As a full-service consultancy with operational offices across China, Hong Kong, India, and ASEAN, we are your reliable partner for business expansion in this region and beyond.

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