The maze of labour laws in India is extremely complex with a number of different laws and amendments from time to time. It is no secret that courts almost always favored workforce over employers. However, the scenario is now changing towards a balanced approach. There is news that government plans to push through labour reforms. The Wage Bill 2017 is one such matter as is the Code on Industrial Relations. The proposed reforms will affect social security, welfare, industrial relations and occupational safety and health. There are other reforms on the anvil. What it all boils down to is that employers need to have specialists on their HR workforce to keep track of such changes as and when they come into effect. This may not be feasible for all enterprises so outsourcing statutory compliance to an external agency is perhaps the best option.
Typical laws covering employers
Consider some of the various laws that employers and businesses must comply with. These are Shops and Commercial Establishment Act, Employees PF Act, ESIC, Professional Tax, Labour Welfare Fund, Contract Labour and Minimum Wages Act to name only a few. Compounding the complexity is the various amendments to these Acts over the past years and you can see just how difficult it becomes for an HR employee to keep track unless he focuses on these Acts. This is where outsourcing compliance services prove to be far better to make sure you are always compliant. Failure to do so leads to fines, penalties and even jail term. In majority of cases if a disgruntled employee lodges a case then the court invariably decides in his favor and awards compensation. All of these can prove expensive for employers.
What outsourced compliance services do for your company?
Compliance services employ legal professional with particular expertise in the field of labour laws. This means their legal experts are always current and updated about the latest amendments and interpretations as well as applicability.
- Should an issue be likely to arise then the legal experts of the compliance service company will take preventive action against escalation since legal proceedings are always expensive and time consuming.
- If the matter does go to court then the legal experts of the statutory compliance service provider step in and handle the case.
- Statutory compliance experts carry out regular audits to ensure their clients always are in full compliance of laws applicable to their operations.
- Their experts examine upcoming amendments and their implications and advise clients to take appropriate measures to safeguard interests.
- Management and administration on an ongoing basis is part of the service.
- A sound legal framework ensures a safe and secure future roadmap on the statutory compliance road. It always pays to plan ahead and put in place a solid structure rather than carry out patch up jobs after the event.
- Advisory on how best to manage the business within the framework of applicable statutory laws and incur least cost as well as risk.
- Maintenance of all records in digitized format, easily accessible when needed.
- Filing of forms with various departments and remittances.
It does take years of study and practical experience to gain a thorough understanding of all the applicable labour laws in India. When you outsource you are gaining access to this competence and that alone is worth the money. That you save on costs of suitable HR employees and enjoy peace of mind are added benefits. And, when you know there is continuity of service as in the case of Alp Consulting, it becomes one more reason to outsource statutory compliance.
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Any enterprise that employs 20 or more people automatically falls under the purview of various Acts and Laws in India. Staying compliant with the multitude of laws can become a major problem but not if you have suitable software to take care of compliances. Take a look at the statutory compliances checklist below:
Any enterprise with 20 or more employees whose individual monthly salary is below Rs 21000 must register with the Employees State Insurance Corporation under the ESI Act and make appropriate deductions, deposit it in the government account and file a return as part of statutory compliances.
A business is obligated under the Minimum Wages Act 1948 to pay a fair and minimum wage rate, even if the worker is on a contractual basis. Failure to do so may invite penalties and legal action.
Enterprises with 20 or more employees need to register with the EPFO and deduct contributions from the salaries and deposit it as well as file returns in time otherwise it becomes liable to penalties and even legal action.
The Payment of Gratuity Act 1972 applies to all institutions that employ more than 10 people and it is a contribution the employer makes and appropriate records need to be maintained.
The Income Tax Act 1961 stipulates that employers must deduct tax at source from the salary and deposit such amounts with the IT account along with suitable form 24Q and Form 16 and returns. Similarly, certain employees are subject to payment of professional tax that must be deducted from salary before computing income tax as part of statutory compliance requirement.
Then there are other schemes such as Employee Deposit Linked Insurance in which employers must contribhute 0.5% of the employee’s wage up to a maximum of Rs 6500. Then there is the Maternity Benefit Act, Equal Remineration Act and other Acts to keep in mind and ensure statutory compliance.
It is a challenge to carry out all these processes manually. For one, HR personnel in charge of payroll may not even be aware of all compliances. Secondly, they may not be updated about recent amendments or be able to carry out the process in time. Then they have to prepare a statutory compliance checklist and check each individual item every month.
Enterprises may choose to put in place a suitable statutory compliant software that will handle payroll with time attendance integration and the facility to generate forms, fill them and file with appropriate authorities well in time, with zero error. Another option is to simply outsource statutory compliances and be totally safe. Expert consulting services have the personnel and resources for speedy, precise and error free HR processes.
Employers constantly face the issue of employee turnover and if this happens in the HR department their payroll operations can be affected until a new employee becomes familiar. Outsourcing to Alp Consulting ensures continuity of services and timely compliance with all prevailing rules and regulations. A situation never arises where a government department issues a notice or institutes proceedings and penalties.
For More Info Visit Us On – http://www.alpconsulting.in/payroll-services.html
Labour law compliance refers to a set of accepted terms or conditions of employment. It refers to several regulatory compliances including minimum wages act, work men’s compensation act,contract labour act, factories act etc.
Business is tough in India. Apart from the business side, the company is also obligated to meet statutory compliance requirements. There are various Laws and Acts that the business must comply with or face punitive action. There are laws at Central level and there are State Government laws applicable to a business.
Labour law checklist
The best way to ensure compliance is to prepare a labour law compliance checklist and tick off each item on the list every month by a person assigned for the task. One can just as well use HR automation software to ensure compliance. Various types of businesses must prepare a compliance checklist under labour laws according to their sphere of operations. A representative labour law compliance checklist would look like this:
- The Building and Other Construction Workers Act 1996, Form 1 to be submitted 30 days before commencement of work and Form 1 within sixty days from commencement of work.
- The Building and Other Construction Workers Welfare Cess Act 1996 – a demand draft for 1% of project cost to be submitted within 30 days of completion of project.
The Factories Act 1948
- Form 1 with annexures to be completed on completion of construction project
- Form 2 to be submitted on approval of factory building plans
- Form 1 on commencement of work
- Form VI B after work has started
- Form A & B to be submitted when construction starts
- The Employees’ Provident Fund & Miscellaneous Provisions Act 1952–Coverage proforma on commencement of work besides monthly deductions and form filing.
- The Employees State Insurance Corporation Act 1948 – Form 01 at time of commencement of work
There are other laws as well that necessitate preparation of Labour Law Compliance Checklist. Some of these are:
- Shops & Commercial Establishment Act
- The Professional tax Act
- The Labour Welfare Fund Act
- The Minimum Wages Act 1948
- The Payment of Bonus Act 1965
- The Payment of Gratuity Act 1972
- The Equal Remuneration Act 1976
HR employees would need to prepare a calendar type checklist to ensure compliance. For instance, TDS must be deducted and deposited by 7th of the following month with form ITNS 281. As for Factories Act, each State may have its own rule but returns must be filed by 15th of the month. EPF must be deposited by 21st of the month. ESI deductions and forms must be done by 21st of the following month. Quarterly income tax returns in form 24Q and form 27! Need to be filed by 31st of applicable month for the quarter.
As can be seen, it is no easy task to keep track of all necessary compliances because certain Acts and Laws are applicable in certain conditions such as number of employees or a certain pay limit. HR staff will need to ensure that their compliance checklist under labour laws also reflects the latest amendments and incorporate such changes in their filings and returns. Then there are specified dates by which deposits should be made and forms filed with appropriate authorities. There may be monthly returns, quarterly returns or annual returns that must be filed in time according to stipulations of various acts and Rules. Errors are bound to creep in and there may be errors of omission or commission that could result in penalties. The best solution is to outsource compliance to experts or use the right HR automation software. Not all laws and Acts apply to all types of businesses so one must know precisely which Acts apply and which rules so as to prepare a calendar of checklist and follow them rigorously for full compliance.
For More Info Visit Us On – http://www.alpconsulting.in/statutory-compliance-services.html
Outsourced Labour Related Statutory Compliance Services, in HR refers to the legal framework within which organizations must operate, in the treatment of their employees. Every country has several hundreds of federal and state labour laws that companies need to align with.
Alps Consultants strictly adheres to the Labor Law Statutory Compliance policies of India, which stated simply refers to the legal framework within which organizations must operate, in the treatment of their employees. Alp has a unique distinction of maintaining a cent percent Labor Law Statutory Compliance record with regards to both its employees and its clients. Our strong focus on Labor Law Compliance in HR has inspired us to develop a highly sophisticated infrastructure designed to manage the diverse requirements of our clients across India. Alp has a great team of Legal and Labor law experts, who possess all the required expertise to address each and every aspect of Indian Labor Laws and Compliance. Alp solutions support every aspect of your HR strategy, right from recruitment and onboarding to training, talent management, payment and reward.
Many Labour Law Compliances such as PF & Misc Provision Act, Factories Act, ESI Act, Minimum Wages Act, Bonus Act, Labor Regulation and Abolition Act, Professional Tax Act, Shop and Establishment Act are required of Indian companies. Establishments spend a significant amount of time ensuring that they are compliant with all these provisions, sometimes with no guarantee of full compliance. Adhering to statutory compliances is necessary for all Business Establishments in India, to keep their businesses safe from the legal issues. The HR Outsourcing Companies have a deep knowledge of Statutory Compliance Management, and help Organizations to minimize the risk associated with the non-compliance of statutory requirements.Continue Reading