As India gears up for an interconnected economy, it’s imperative to roll out an inclusive statutory and compliance taxonomy addressing various complexities.
By Rakesh Jain
As organizations are redesigning and becoming more agile, decentralizing traditional models for the varied HR functions are being viewed as a top priority to manage the 21st-century workforce. Payroll and statutory compliance involve a lot of time and resources of an enterprise. Organizations not only need to ensure compliance with these laws but also need to register the treatment in accordance with the said practice/employee.
Companies, big and small need to adhere to statutory laws and regulations to keep the businesses out of any legal trouble and avoid penalties. Staying abreast and keeping track of the changing government norms and regulations is a challenge for most organizations. As India gears up for an interconnected economy, it’s imperative to roll out an inclusive statutory and compliance taxonomy addressing various complexities.
Some of the key statutory compliance and labour law compliance requirements of Indian companies include –
· Calculation and deduction of statutory payments
· Uploading of data on respective websites and generation of challans
· Filing transfer and withdrawal forms for Provident Fund
· Filing of returns with govt. agencies as per the schedule
· Registrations & renewals of respective licenses.
Often time-consuming and complicated, processes towards registering and renewing or fulfilment of licenses namely the Contract Labour (Regulation and Abolition) Licenses, Provident Fund, Employees State Insurance, Professional Tax Registration, and Factory Licenses are best managed through an outsourced payroll partner.
Labour law compliance includes several regulatory compliances including minimum wages act, work men’s compensation act, contract labour act, factories act, etc. Failure to comply with any of these laws at Central and State Government levels attracts heavy penalties or businesses may need to face disciplinary action.
Statutory compliance of labour laws becomes a daunting task for organisations with cross border operations with distinctive regulatory compliances in different states and countries. The HR team spends extensive man-hours in overcoming the complexities related to different labour laws for streamlined organisational policies.
Regular processing of payroll includes calculation of several taxes, accounting for employee travel, medical, education as per the permissible allowance limits of each employee. Investment declarations and employee benefits calculation is also highly time-consuming. Missing deadlines to file any important reports may lead to hefty penalties for an organization.
A dedicated legal compliance management team of an outsourced service provider minimizes the risk associated with non-compliance. Easing out the taxing processes, enterprises are able to reduce their operational expenditure and enhance existing operations. With the availability of data on the cloud, compliance services are now accessible 24×7 for ease and quick turnaround.
According to Gartner, “By 2022, 75% of organizations will include employee experience improvement as a performance objective for HR and IT groups.” This means that HR and IT now have a growing priority to work together to ensure new technologies not only address complex business issues but also meet the expectations of people who use them.