Compliance Management

Compliance Management

HR statutory compliance refers to a company’s obligation to operate within the framework of employment laws and government-mandated regulations. It is a foundational component for responsible and lawful business operations.

Mandatory Legal Requirement:
Meeting statutory compliance is not optional—it is a mandatory legal responsibility for every business. Non-compliance with government regulations can result in serious repercussions such as fines, sanctions, legal disputes, or the suspension of operations.

Safeguarding Rights and Interests:
Compliance with statutory laws helps protect the rights of employees, customers, investors, and the broader community. It covers essential aspects such as fair wages, working hours, health and safety regulations, environmental standards, and consumer rights—ensuring ethical and responsible business practices.

Ensures Business Stability:
Adhering to legal norms supports uninterrupted business continuity. A compliant organisation builds credibility, earns stakeholder trust, and minimises risks that could harm operations or brand reputation. In contrast, violations may lead to operational delays, financial losses, or even shutdowns in critical situations.

Improved Corporate Image:
Adhering to legal and regulatory standards strengthens a company’s public image and builds credibility among clients, investors, and the community. It reflects a commitment to integrity, transparency, and socially responsible business practices, fostering long-term trust and brand value.

Prevention of Legal Liabilities:
Compliance helps businesses steer clear of costly legal issues, including fines, sanctions, or operational restrictions. By proactively following regulations, organisations can safeguard their financial stability and focus resources on innovation and business development.

Employee Rights and Workplace Standards:
Complying with employment laws ensures that workers are treated fairly—receiving appropriate wages, enjoying safe and healthy work environments, and being protected from workplace bias and misconduct. This not only boosts employee morale but also leads to higher retention and organisational loyalty.

✅ Statutory Compliance Checklist (India) – 2023

Organisations operating in India are legally bound to comply with several central and state-specific labour laws and regulations. Below is a refined and updated checklist of major statutory compliances essential for ensuring legal, ethical, and operational integrity:

1. Shops and Establishments Act (State-Specific)

Objective: Regulates the conditions of work and employment in shops, commercial establishments, restaurants, and theatres.
Key Provisions: Working hours, weekly holidays, leave entitlements, opening and closing hours, overtime, and employment of young persons.

2. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

Objective: Ensures post-retirement financial security for employees.
Key Provisions: Mandatory contribution from employer and employee towards EPF, EPS, and EDLI schemes.

3. Employees’ State Insurance Act, 1948 (ESI Act)

Objective: Provides medical, cash, maternity, disability, and dependent benefits to insured employees.
Applicability: Applicable to establishments with 10 or more employees earning ₹21,000 or less per month (₹25,000 for persons with disabilities).

4. Professional Tax Act (State-Specific, e.g., Maharashtra/PTA, 1975)

Objective: Levy and collection of tax on professions, trades, callings, and employments.
Key Provisions: Deduction of professional tax from employee salary based on slab rates notified by respective state governments.

5. Labour Welfare Fund Act (State-Specific, e.g., LWF Act, 1965)

Objective: Provide social welfare benefits like housing, education, and medical facilities to workers.
Key Provisions: Contributions by employer and employee; varies by state (e.g., Maharashtra, Tamil Nadu).

6. Contract Labour (Regulation and Abolition) Act, 1970

Objective: Regulates the employment of contract workers and provides for their welfare.
Key Provisions: Registration of establishments and licensing of contractors engaging 20 or more contract workers.

7. Child and Adolescent Labour (Prohibition and Regulation) Act, 1986 (Amended 2016)

Objective: Prohibits employment of children below 14 and regulates working conditions for adolescents (14–18 years). Penalty: Strict punishment for employers violating the provisions.

8. Minimum Wages Act, 1948

Objective: Ensures employees receive at least the statutory minimum wage for work performed.
Applicability: Varies by state, industry, and skill category.

9. Payment of Wages Act, 1936

Objective: Regulates the timely payment of wages without unauthorised deductions.
Mandate: Wages must be paid within 7 days (10 days if more than 1000 workers).

10. Payment of Bonus Act, 1965

Objective: Ensures employees receive a statutory bonus based on profits or productivity.
Eligibility: Employees earning up to ₹21,000/month and having completed at least 30 working days in a year.

11. Maternity Benefit Act, 1961 (Amended 2017)

Objective: Provide paid maternity leave and benefits to women employees.
Key Provisions: 26 weeks of paid maternity leave, crèche facility, and protection from dismissal during maternity.

12. Payment of Gratuity Act, 1972

Objective: Provides terminal benefits to employees after completion of 5 years of continuous service.
Formula: Gratuity = (15/26) × Last drawn salary × No. of completed years.

13. Equal Remuneration Act, 1976 (Now integrated with Code on Wages, 2019)

Objective: Ensures equal pay to men and women for similar work and prevents gender discrimination.

14. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Objective: Prevents and addresses sexual harassment against women in the workplace.
Mandate: Formation of an Internal Complaints Committee (ICC) in organisations with 10+ employees.

15. Employees' Compensation Act, 1923

Objective: Provides compensation to employees (or their dependents) in case of injury or death during employment.
Applicable To: Workers not covered under ESI.

16. Industrial Employment (Standing Orders) Act, 1946

Objective: Requires employers to define rules of employment, such as misconduct, termination, discipline, and work classification.
Applicable: To industrial establishments with 100 or more workmen.

17. Industrial Disputes Act, 1947

Objective: Provides machinery for the investigation and settlement of industrial disputes.
Provisions: Retrenchment, layoffs, strikes, lockouts, and dispute resolution mechanisms.

18. Apprentices Act, 1961

Objective: Promotes the training of apprentices in various trades and crafts.
Key Provisions: Specifies employer responsibilities in training, stipend, and work conditions for apprentices.

19. Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979

Objective: Protects migrant workers’ rights and regulates their working conditions, wages, and displacement allowances.

20. Factories Act, 1948

Objective: Ensures the safety, health, and welfare of workers employed in factories.
Applicability: Factories employing 10 or more workers with power, or 20 or more without power.

21. Trade Unions Act, 1926

Objective: Governs the formation, registration, and functioning of trade unions.
Purpose: Protects the collective rights of workers and enables them to negotiate wages and working conditions.