Running an organization requires adhering to and following government guidelines with regulatory laws which is essential to run an organization smoothly.
One slip and government agencies can come cracking down on your organization, along with heavy fines. More than anything, it can defame companies that have worked hard to establish their name in the market.
Having a statutory compliance checklist can ensure that nothing falls through the cracks. Let’s examine what such a checklist should involve.
Statutory Compliance Checklist 2022
The minimum wages for each occupation, sector, state, and national level job are declared by the Central Government.
The official agency in charge considers the cost of living to determine the minimum wages. Every company must abide by the revised wages to be on the right side of the law.
Registration for PF
Any company that employs 20 or more persons is required to register with the Employee Provident Fund Organisation.
The Provident Fund Act mandates that both the employer and the employee must make contributions to an employee’s PF. The employee also earns interest on the amount in their fund account.
Registration for ESIC
All workers in an organization with a salary of less than ₹21,000 are covered under the Employees’ State Insurance Scheme of India (ESIC).
This insurance scheme protects employees against sickness, maternity, disablement, and death due to a work-related injury. It also ensures medical care to insured employees and their families.
It is the employer’s responsibility to enroll every eligible employee in the scheme and transfer an amount that equals 4% of the monthly salary.
Gratuity is the monetary benefit that an employee gets after completing five years in an organization. It comes under the Payment of Gratuity Act 1972 and is a component of the gross salary.
The employer is liable to pay gratuity to the employee upon retirement or when the employee leaves to join another company. The organization has to pay gratuity even if the employee passes away.
TDS or Tax Deducted at Source
TDS is the source tax that is to be reduced when a payment is made. The employer has to deduct income tax from the salaries of the employees.
As the tax is paid at the source, it reduces the possibility of tax evasion. As an employer, you are responsible for filing these taxes with the government of India.
Payment of Bonus
The Payment of Bonus Act, 1965, applies to every factory or establishment that employs more than 20 persons.
The law regulates the bonus paid in such establishments depending on profit and productivity. It mandates giving bonuses to all employees who receive salaries or wages up to INR 20,000 per month.
It also calls for the distribution of bonuses to all employees who have spent at least 30 days working in a year.
Several organizations prescribe health tests before hiring employees. All this data should be extremely confidential and only go into the employee records. Any data leak can cause a loss of trust within the organization.
Accommodation for Disabilities and Harassment Prevention
Denial of equal opportunities due to disabilities or not providing an appropriate environment to the disabled can lead to unrest within the company. The People with Disabilities Act calls for reservations for the disabled in certain establishments.
The HR and the facilities management should work on providing the appropriate infrastructure to the disabled. For instance, providing wheelchairs, ramps at entries and exits, smooth passage inside the premises, and handrails on the ramps are a few areas that can be looked into.
Apart from this, every organization must have a sexual harassment committee in place. The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, is an important act that protects women’s rights in the workplace. It also makes the necessary provisions for complaint redressals.
An employment policy or procedure handbook is a document that describes how an employee should conduct themselves.
The handbook contains information right from the entry to the exit of the employee. It should include policies about leaves, pay and overtime pay, benefits, perks, health benefits, retirement benefits, etc.
Employee Benefits and Payroll Compliance
Every country has payroll-related rules and regulations to protect the rights of employees and employers.
In India, apart from the Provident Fund Act and the Minimum Wages Act, 1948, there are other laws such as the Payment of Wages Act, 1936, Amendments to Maternity Benefits Act, 1961, and some taxation rules.
Non-compliance to these can lead to jail time and hefty fines. Thus, ensuring employee benefits and payroll compliance in any organization is extremely important.
The HR department has a huge responsibility to ensure compliance with all statutory and regulatory laws. Apart from that, a few hygiene factors should also be in place to ensure an organization can run smoothly without any legal hassles.