Complying with Indian Labour Laws


Posted by on August 28, 2016

There are over 40 central labour laws with some state specific riders. The provisions of these laws mandate different types of activities including maintaining & submissions of various documents and returns. Some of these regulations are trivial and some carry hefty penalties and even jail term for non-compliance. All organizations regardless of their industry, size and geographical presence are required to follow many of these compliances.

Audit of Contractor Compliance

In case the contractor fails to fulfil any of the statutory responsibilities, the principal employer is expected to step in and ensure its compliance. In many cases the onus of compliance is ultimately on the principal hence it is important for the companies to monitor & audit the contractor compliances.

Fulfil Statutory Responsibilities

Each organization needs to identify and fulfil appropriate statutory responsibilities under all relevant legislations and rules. The responsibilities may include one or many of the following:

  • Timely filing of Statutory Returns
  • Maintaining appropriate Statutory Registers and Records
  • Timely Registration and Renewal of Licenses
  • Display of Abstract & Notices
  • Timely & accurate submission of statutory challans and Remittance

Keep Evidence of Compliance

In an event of audit by the statutory agencies organizations are required to present the evidence of compliance. While some of these compliances are now online making it easy to download the evidence/acknowledgement, most of the compliances are still offline and hence physical documentation of the evidence must be produced at the time of such audit.

Keep current with the updates

From time to time revisions are done to the various legislations. Labour reform is one of the key objectives of the current government and is already long overdue. There have been constant revisions to these compliances some with the aim to streamline the process while other as part of labour reform initiatives. Companies are expected to stay up-to-date on these amendments

Ignorance is not an acceptable excuse

Simply claiming ignorance or lack of awareness of the regulations will not get the companies out of trouble. It is therefore crucial for the top management to pay attention and carefully monitor the progress of the compliance. Paying their way out of trouble might not be a wise or long term solution as the government is tightening the noose on the non-compliance. Latest revisions and trends towards labour compliance indicate that the cost of non-compliance is expected to grow with the time.

Need for an automation tool

Even the latest amendments to the Companies Act has mandated that the directors must ensure that the compliance are tracked by some sort of automation tool. Having an automated tool to maintain and monitor the compliance responsibility is a wise investment that would keep organization safe from unexpected consequences of non-compliance. Even if the compliances are outsourced having a tool will ensure that there are no slippages and keep management well informed.


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