Every organisation in India is required to follow a network of laws and statutes. Statutory Compliance means that all acts taken by an entity must adhere to the legal provisions. As a result, processing payroll and social security benefits for employees must also adhere to the applicable laws. The employer’s handling of the organization’s employees must also comply with any state and federal labour regulations. Noncompliance would result in penalties, fines, and legal action being taken against the organisation. Following the precepts of labour laws benefits both the employer and the employee, as well as the organisation.
Why Is Statutory Compliance Important in Payroll?
Both the employer and the employee view statutory compliance as crucial. Many labour legislation, such as the Industrial Relations Act, Women and Child Safety, Social Security, Minimum Benefits, Health and Occupational Safety, etc., were developed for the benefit of employees. If any of the aforementioned laws are broken, the Indian government will likely take enforcement action that could jeopardise the company’s ability to continue operating legally.
Employers and HR departments are legally obligated to guarantee adherence to these laws. Periodically, the Government of India carries out statutory audits to make sure and confirm this compliance. Companies should, as a matter of course, make sure that they are fully compliant in order to preserve their corporate life and stay clear of any legal issues.
How Statutory Compliance Benefits Both Employees and Employers?
Both the employer and the employee view statutory compliance as crucial. Many labour legislation, such as the Industrial Relations Act, Women and Child Safety, Social Security, Minimum Benefits, Health and Occupational Safety, etc., were developed for the benefit of employees. If any of the aforementioned laws are broken, the Indian government will likely take enforcement action that could jeopardise the company’s ability to continue operating legally.
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Employers and HR departments are legally obligated to guarantee adherence to these laws. Periodically, the Government of India carries out statutory audits to make sure and confirm this compliance. Companies should, as a matter of course, make sure that they are fully compliant in order to preserve their corporate life and stay clear of any legal issues.
For the worker
- ensures that men and women have equal access to the minimum wage and jobs
- safeguards workers’ social security through perks and pay
- improves workplace relations and ensures that workers are treated fairly
- guarantees adequate working conditions and workplace health and safety
For the employer
Prevents:
- ensures that men and women have equal access to the minimum wage and jobs
- safeguards workers’ social security through perks and pay
- improves workplace relations and ensures that workers are treated fairly
- guarantees adequate working conditions and workplace health and safety
Protects:
- The company opposes demands from employees’ unions and other groups regarding wage increases that are unreasonable or illegal.
- By keeping clients’ and employees’ faith in the business as a fair one, it may uphold its reputation.
- motivates management to uphold organisational integrity
- reduces risks and guarantees greater awareness of compliance
Statutory Compliance Checklist in HR-2022
- The Apprentices Act, 1961
- The Contract Labour Regulation and Abolition Act, 1970
- The Child Labour Regulation and Abolition Act, 1986
- The Industrial Disputes Act, 1946
- The Payment of Gratuity Act, 1972
- The Minimum Wages Act, 1948
- The Industrial Employment Standing Orders Act, 1946
- The Employees Provident Fund and Miscellaneous Provisions Act, 1952
- The Equal Remuneration Act, 1976
- The Employees State Insurance Act 1946
- The Payment of Bonus Act, 1965
- The Payment of Wages Act 1936
- The Factories Act, 1948
- The Employment Exchange(Compulsory Notification of Vacancies Act), 1959
- The Trade Unions Act, 1926
- The Workmen’s Compensation Act, 1923
- Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
Statutory Compliance Rules and Regulations in India – 2022
Key Provisions of Statutory Compliance in India:
- The Payment of compensation Act of 1936 is responsible for ensuring that both direct and indirect employees receive fair compensation. This basically checks that no unauthorised deductions have been made and that all wage payments have been made on time. The Act is subject to the following crucial requirements:
- When there are fewer than 1000 employees, wage payments are made on the seventh of the month.
- wage payments made before the 10th of the month if there are more than 1000 employees.
- The pay term is limited to one month.
- Cash payments for wages are only permitted with the employee’s full permission. If not, they must be transferred to the worker’s bank account.
- There is also a list of the fines and penalties for workers who break the law.
