Talk to any HR services professional and you’ll get to hear about the evolving compliance policies. While the term “compliance” pertains to meeting all the rules, laws, and guidelines, statutory compliance specifically focuses on the rules and laws pertaining to labour and human resources. Statutory compliance requires every business to adhere to labour and taxation laws and guidelines set by the government. Failing to stay compliant leads to penalties and fines.
Today, we bring you the updated statutory compliance checklist to help you avoid confusion:
Updated Statutory Compliance Checklist
- The Employees Provident Funds and Miscellaneous Provision Act – 1952 (EPF)
- Shops and Commercial Establishments Act (S&E)
- The Employees State Insurance Corporation Act – 1948 (ESIC)
- The Labour Welfare Fund Act (LWF) 1965
- The Professional Tax Act (PT) 1975
- The Minimum Wages Act-1948
- The Child Labour (Prohibition & Regulation Act), 1986
- The Payment of Wages Act-1936
- The Maternity Benefit Act-1961
- The Contract Labour (Regulation & Abolition) Act – 1970 (CLRA)
- The Payment of Bonus Act-1965
- The Industrial Establishment (N&FH) ACT 1963
- The Payment of Gratuity Act-1972
- The Employment Exchange (Compulsory Notification of Vacancies) ACT-1959
- The Equal Remuneration Act-1976
- The Apprentice ACT, 1961
- The Industrial Employment (Standing Orders) ACT 1946 – Model Standing Order Only
- Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) ACT, 2013
- The Industrial Disputes ACT 1947
- The Employees Compensation ACT-1923
- The Interstate Migrant Workmen (Regulation of Employment and Conditions of Services) ACT, 1979
- The Trade Unions Act, 1926
Statutory Compliance in India
On payroll, taxation, and labour grounds, every organization must follow the statutory compliance checklist mentioned above. To make things easy for you, here are the most basic statutory compliance rules where organizations make more mistakes than others:
Minimum Wages
The minimum wage act, as the name suggests, determines a minimum amount of money that must be paid to a worker. The minimum wage act protects a worker from getting underpaid. But that’s not all, the minimum wage act also helps workers get medical help, education, and other relief, as and when required.
The minimum wage act is a state matter, so companies need to follow the state-wise guidelines in this case.
TDS
Not every employee comes under the tax bracket. But all those employees that do, HR professionals have a legal responsibility to take care of the TDS (tax deducted at source).
Moreover, the HR department must produce Form 16 and other necessary employee documents. Form-16 is important for filing returns, so the HR department must create these documents on time.
ESI and PF
According to Indian labour laws, employees with a salary of INR 15,000 or less are liable for a monthly ESIC deduction. The HR team thus deducts this amount and pays it to the ESIC department. Employees below a salary of INR 15,000 hospitals get health benefits in the ESI act.
Provident Fund, or simply PF is deducted from the salary of an employee and saved in the PF account. This amount gains compound interest and can be withdrawn after a lock-in period. The PF amount is tax-free and helps employees save money for the future.
Gratuity
On the completion of 5 years of service in a company, an employee is eligible for gratuity. The gratuity is deducted from the monthly salary of an employee regularly.
That’s all about the updated statutory compliance checklist and the key points that you need to take care of in payroll processing and routine HR activities. These tasks are prone to error and may lead to substantial losses in terms of fines, legal procedures, and employee dissatisfaction. You need an expert and experienced HR partner to stay statutory compliant at all times.
