For any organization, there are various norms set by different authorities. It needs to follow all the rules, which is called Statutory compliant. Salary has special norms that every organization needs to follow the most crucial factor. It is called payroll compliance. The payroll has got various parts, and each of them must be adhered to as per the standards set by the laws. For multiple sectors, there are different rules, and hence from the HR point of view, it needs to meet the requirement of specific sector payroll norms. If the payroll meets the given conditions, the concerned organization is called payroll complaint.
For an organization, whether in the manufacturing sector or commercial, there are various norms related to the PF, minimum wages, and other benefits to the employees. To know if the concerned organization is statutory compliant or not, one needs to see if it is registered with the PF office, labor law office, and other authorities or not.
Some of the main provisions
The primary regulation for any organization is with minimum wages. There are minimum wages in different sectors as per the government norms that the organization has to pay to its employees. It cannot be deducted under the title of not effective services. In the case of leaves, the employer can deduct the salary from minimum wages if the employee is not available on work even if he was given the task. However, if the employer was not able to offer the work to the employee, he has to pay the minimum wages.
There are also provisions for various deductions under different titles. The employer needs to have PF deduction, TDS deduction, and ESIC as well as labor welfare fund deduction from the wages of the employee as per the given rates. The rates of PF, ESIC, TDS, and LWF can be changed from time to time.
Dearness allowance is also an essential part of the salary of the employees. In some cases, they are fixed and offered hike regularly, while in some cases, there is no specific norm, but the government issues rates from time to time, which the organization needs to follow. It is necessary to follow all the above provisions made under different acts by the government to be a statutory compliant organization.
For some of the companies, it is not possible to handle all the departments, and hence they can hire experts who offer statutory compliance services in Delhi. The organization needs to send the required data for the concerned services. They have experts who can manage the rest of the show. In case of any query with the HR, they can also offer a solution that may be in the interest of the company.
For an employee also it is necessary to check if the concerned organization which he plans to join is a statutory compliant or not as the companies which follow the rules can offer the best salary and other facilities to the employees. Hence to know the inner side of the company, it is better to understand its legal status.
Allowances and other facilities
Companies offer various allowances under different heads. Some of these allowances are also taxable, and to save the employee tax liability, they are also provided as a part of perks. Usually, wages and deductions are mentioned in the salary slip of the employee. The deductions are mentioned under different heads. The salary slip can offer a better idea to an employee about his income and tax as well as deductions made from the company's side. As per the provision of law, the companies must provide salary slip to every employee.
Why does an organization need to be statutory compliant?
The best answer to this question can be to save the business from legal obligations. These are the rules that are offered under various acts, and every company must follow the rules. The violation of the norms may attract penalties and punishments from the government. To avoid such situations, the companies need to hire people who know the legal procedures to make it a statutory compliant one. If the organization is too small to hire the people as an employee, it can take services from third-party service providers also. It can find statutory compliance services in Delhi, which are offered by some of the experts in the market.
The employees in this department also have to face many challenges, as the rules are changed many times. Some technologies are used to overcome the hurdles of the following rules. The payroll software is the best example that can make it clear. For any organization, it is necessary to be a statutory complaint regularly as it is an ongoing process. Those organizations which follow the rules can have a better image in the market, and it can help the business also. To keep the business statutory compliant, the companies even hire people who offer different types of statutory compliance services in Delhi.
Is my organization adhering to Minimum Wages?
This is an obvious question in the mind of anyone who is to join an organization. In the market, many businesses are suitable as a market player but worst as an employer. Such companies have everything on paper, and hence they are saved from the legal provisions. However, for an individual to know the legal stand of the company is much required. For this verification, he needs to discuss his doubts with HR and know what salary will he get and when. He also needs to know if there will be any deduction from his salary, will he get benefits of ESIC and PF or not. One can even know if the company is registered with the PF office or not, and if he will get the ESIC card by the company or not. These are some of the primary questions that can help one know if the employer he is going to have is genuine to work for or not.
Being an organization that is statutory compliant, it needs to stick to minimum wages, which is a legal obligation for the company. If one can get straight answers to their questions, they can join it, taking it as a genuine business company. The companies may be small or big; it does not matter as it can always follow the rules made by the authorities. There are many service providers whom such companies can hire and meet the legal requirements to have statutory compliance services in India.
Have I made necessary deductions such as TDS and Professional Taxes?
It is a question that needs to be asked by the employer to himself. However, nowadays, the task is assigned to the employees in the HR department or even to the third party statutory compliance services in India, but ultimately the employer is responsible for meeting the provisions under minimum wages and income tax act. Hence one needs to know the rules for deductions of TDS as well as professional tax. Here one needs to note that the regulations related to both of these deductions keep on changing regularly. The deductions of TDS and PT are not only legal requirements but also a contribution to the wellbeing of the nation. Hence they need to be submitted to the concerned authorities even after deduction from the salary of the employees. The failure to the same may lead the company to various punishments as prescribed in the laws.
Is my company registered for Provident Fund?
For the employees who want to associate with the company for a long time, it is essential to know if the company is registered under PF or not. As a statutory compliant organization, the company must be registered with the PF office. The business which needs to deduct the PF of employees requires to be registered with the PF office, and then only it can offer the PF benefits to the employees.
As a part of the statutory compliance services in India, the business needs to have a specific number that is offered by the PF office. It can have employee registration for PF online nowadays as technology is there that helps the companies as well as the government. Hence if one can know if the company is registered with PF, he can surely trust it. He can join such a company without any doubt.
How does the statutory complaint company can be beneficial to the employees?
The organization, which is statutory compliant, can have excellent resources and easy processes. Hence it can care for its employees as it is expected by the norms as well as the employees. The deduction of PF, availability of ESIC, and payment of gratuity can be some of the options that can offer safety to the working-class people in different respects. Hence those organizations which follow the rules can earn a better reputation and have a better image in the market. These businesses do not have to pursue legal cases and waste their energy and resources for the same.
From the employer's point of view, also the stand of statutory complaint holds great significance. It can be counted as a matter of credit, which can help the business in different ways. In the market, it is known as a prestigious company that is loved by the employees, and many people wish to work for it. In the business also such companies are preferred as a partner for different deals. Hence the company can earn colossal name and fame if the laws of the land are followed as required.
The consequences of non compliance
For the employees as well as HR people, it is necessary to know the results of noncompliance also as sometimes people wonder why compliance is so much focused. There are different provisions in the laws that need to be followed by the companies, and in case of not following them, there are also provisions of punishment and penalties. As the company is a legal person, it is responsible for its obligations. But it is not a natural person, and hence those who hold critical positions in the company are held accountable for not meeting the legal requirements.
There are many cases where the chief executive officer of the company has to appear to the court of law to defend the stand of the company when the right information was not furnished. In case of small offenses, there are provisions of penalties which are heavy while in case of grave issues, there are also provisions as per which the key authorities may have to face imprisonment also.
Hence the statutory compliance is something that must be taken care of by the companies, and in case they need, services of experts, they must also hire third parties who can help them offering accurate data to the concern authorities to make this obligation complete and avoid any hassle because of the same.