Labour Law Reforms – What Every CEO Must Know

Labour Reforms

Posted by on September 24, 2016

After GST rollout, Labour reforms is the next big initiative that the Government of India is planning to adopt. Labour laws in its current state are not business friendly. Once these labor laws are streamlined more and more businesses will be tempted to expand their operations and new entrants will enter expand the market thereby increasing the employment opportunities.

Current State of Affairs

Currently the businesses are being forced to comply with endless and repetitive legislative responsibilities. Companies are required to maintain over 80 plus registers as per the formats specified across 40+ labour laws in India. Many of these registers have redundant information. Apart from the registers there are monthly remittance, quarterly, half year and annual returns, registration renewals, procedural requirements, notices to be displayed, infrastructure maintenance guidelines, and other miscellaneous responsibilities. There are central laws that are applicable to all states and then there are state specific laws. Even with central laws there are some state specific rules that overrides the central laws. Some of these laws are applicable to companies subject to certain conditions geography, industry domain, employee headcount and type of operations. Many of these laws carry heavy fines and penalties, prosecution of the management for non-compliance, and in some cases provision for the statutory agencies to cancel registration or shut down the operations of an establishment. To summarize, the companies need to deal with:

  • Maintenance of large number of Statutory Records
  • Keep track of renewals of various registrations under several statutes
  • Follow procedural guidelines as applicable to the industry or employee headcount
  • Follow the procedural guidelines as per the central statutes with state specific rules
  • Keep informed of the relevant statutes and stay current with various amendments
  • Ensure that the critical compliances are never missed while trying to stay fully compliant

How Corporates Deal with the Challenge

Large companies with deep pockets can afford to have a dedicated in-house compliance team and have specialized service providers for various departments. Some who cannot afford to have in-house expertise rely of the services of the service providers. Most small and medium companies who cannot afford to either outsource or build special compliance departments pass this burden on their HR or finance departments to keep as compliant as possible.

Challenges of Small and Medium businesses

These small and medium businesses or the startups face the actual challenge to stay compliant. To name a few:

  • Face harassment from the local authorities/inspectors
  • Pay ‘Fines’ every time there is an inspection
  • Put additional pressure on their HR and finance department to stay informed
  • Waste the management time and bandwidth on monitoring compliance that could be put to much better and profitable use
  • Live under the threat of consequences of non-compliance
  • Confusions and multiplicity of laws and its interpretation encourages corruption and avoidance of compliance

Situation after Labour Reforms

While the industry is keenly waiting for the labour reforms that are in works, will it remove these pains completely or make them worse is yet to be seen. Large companies that already have dedicated compliance teams or have outsourced their compliances are most likely to benefit with these reforms. The small and medium companies and the startups are however likely to have a challenging time post the reforms. While many companies were getting away by taking advantage of the confusions, multiplicity of the rules and corruption in the local authorities, after the reforms this might no longer be applicable. Once labour laws are streamlined and compliances simplified the enforcement will get only more stringent as confusion and corruption in enforcement will also reduce.

Solution – Compliance Tracking System

The best solution for the companies that cannot afford to spend heavily on having dedicated compliance departments is to have a decent compliance tool that can enlist the activities along with what, when and how to do these activities. Having a reminder on once a compliance is due and a report of overall compliance status. Online storing of the statutory documents and evidence of compliance will help keep the companies prepared for any inspection.

Compliance Tracking helps solve:

  • What Compliances are required
  • When these compliances need to be done
  • How these compliances are to be done
  • Track whether these activities are done
  • Remind if these activities are due
  • Report of compliance status
  • Storage of compliance evidence and statutory documents

The compliance tracking tool is the real need of the hour and many compliance software companies are taking advantage of these needs by charging heavily. Companies had no other alternative than to either pay up the cost for these tools or continue facing these challenges. CompliCheck System is a compliance tracking system that is going to end this.

CompliCheck Systems

Compliance tracking should not be difficult or expensive” – Ranjan Soni, CEO & Founder, CompliCheck Systems. To achieve this, CompliCheck  has launched a free compliance tracking for the small business and startups to cover all critical compliances. For non-critical compliances and for multi-location companies, the cost of the tool is kept reasonably low.  The company is basically charging for the online storage and computing cost. The repository library of CompliCheck has Labour laws, taxation, building, environment, and all other relevant compliances that companies need to do. The repository is maintained by a large number of knowledge partners and the sharp eyes of CompliCheck users. They are able to keep the prices of the tool this low by reducing their marketing expenses. They have introduced an invite based subscription model which encourages peer references. Initially the company is releasing the invites directly based on the requests received on their website, eventually the invite only will be shared by the peer users. Users get incentivized for sharing their invite code as for every paid subscriber the referrer earns some points that can be used to further reduce their renewal charges. CompliCheck also gives additional credits for staying compliant and for participating in discussions and for helping in keeping the compliance repository accurate. Theoretically a CompliCheck user can convert its paid subscription into a free renewal by simply spreading the word and earning credits from referrals, by staying compliances, help improving the repository and participate in various discussions.


How To Subscribe

Get an invitation Code and visit to register. If you don’t have invitation code, fill in the form and you will receive your invite code (it might take a few days as they roll out invites in monthly batches). You can check within your network, HR forums, whatsapp groups, Linkedin groups or call up your contacts and ask for their invite code. Once you get the invitation code you can subscribe to their 30 trial edition. It is an easy to use tool and there are plenty of help documents and online support available. After completion of trial you can continue using their free Edition or upgrade to one of their paid plans. All the details are available on their website.




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