Employees are at the core of any organization. They are crucial to business growth and meet customers’ expectations. However, for a company to function efficiently, its processes need to be streamlined, with proper rules and regulations.
That’s where statutory compliance can help. It empowers you to define a legal framework within which your organization must deal with the employees.
In other words, statutory compliance helps ensure your company treats its employees in accordance with various central and state labor laws.
For starters, here are some acts and laws that businesses need to follow in India:
The Employees’ State Insurance Act, 1948
It provides specific benefits to workers in case of illness, maternity, or on-duty injury.
Payment of Wages Act, 1936
It regulates the payroll services of both direct and indirect employees.
Tax Deduction at Source (TDS)
Depending on the services provided, companies need to deduct tax at the source of income before paying contract workers.
The Equal Remuneration Act, 1976
It aims to ensure gender parity in payments.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013
The primary aim of the POSH Act is to make working safer for women by preventing sexual harassment against them in workplaces.
Here’s a complete list of statutory compliance acts and regulations in India
Adhering to statutory compliance helps prevent issues from trade unions, employees that could be potential trouble-makers, and legal problems.
However, these laws are constantly evolving, making it necessary to keep yourself updated with any changes and optimize your rules accordingly. In addition, non-compliance can invite penalties that are often several times more than complying with legal regulations.
That said, it could be challenging for businesses to comply with all the rules and regulations. It could also mean that you’ll need to hire compliance officers to stay atop the rules.
But can one person ensure statutory compliance in your company? Probably not!
Statutory compliance includes complying with:
- Companies Act
- Income Tax Act
- TDS Deduction
- PF and ESIC
Hiring several compliance officers could be expensive, not to mention other resources it will use (additional desks in your office, traveling costs to visit various government offices, etc.).
Now the question remains, how should businesses ensure statutory compliance without spending a lot?
5 Reasons for Statutory Compliance Outsourcing
Apart from costs and resources, there are other reasons to leverage statutory advisory services, including
Statutory compliance submission deadlines are spread out over the year. For instance, you need to adhere to monthly, quarterly, half-yearly, and annual compliances. Failing to upload the necessary documents on time could invite fines.
If you’re doing everything on your own, it might affect your business. For example, you’ll find yourself regularly filing compliance documents instead of strategizing to grow your company.
Keeping Up With Changes
Rules and regulations keep changing. For example, labor and minimum wages laws might differ based on the state you’re operating from. And, if you have offices in multiple states, it could be challenging to keep with the regulations.
If you outsource statutory compliance, you won’t have to worry about the changes or even new laws being introduced. Instead, your partner will do everything on your behalf.
Prevention of Legal Penalties
As a leading HR management company, we have compliance officers with more than a decade of experience. They keep themselves updated with state and central laws changes to ensure our clients don’t face any issues (legal or employee-related).
Improvement in Business Operations
When you don’t have to worry about statutory compliance or legal problems, you can better focus on your business operations. It also frees up your other resources, which you can use on your core business activities and R&D to improve your business.
Enhances Brand Reputation
A business’s reputation depends largely on what its employees say about it. If a company is fully compliant, its employees will be happy and satisfied. As a result, they will talk positively about your organization across platforms, improving your brand reputation.
When you have an improved brand reputation, you can attract better talent, which, in turn, enhances your business’s bottom line.
You can rest assured that your employees get the best treatment (as per state and country laws). You can also leave employees’ concerns to us (if any), and we will make sure that they get resolved immediately.
Benefits of Being Statutory Compliant
Now that you know why statutory compliance outsourcing is the right choice, let’s look at the benefits of being statutory compliant.
Increased Employee Retention
When your HR is compliant with the payroll services and other laws, it will assure your employees that they will get a professional and fair working environment. It also indicates that you’re ready to resolve any issues related to labor or employment. This, in turn, will ensure your employees are happy and productive.
Improvement in Quality
By leveraging statutory advisory services, you can eventually improve the quality of your products.
As mentioned above, being statutory compliant will enable you to focus on more important tasks of your business. Also, your employees won’t have to worry about getting paid or TDS deduction, so they can concentrate on giving their best.
Get More Investment
When you prioritize statutory compliance, current and potential investors will stay assured about your commitment to high ethical standards. In addition, it shows that the organization intends to do business fairly. As a result, potential investors will begin to trust the company more and will be highly likely to put their money on.
Statutory compliance is a must for every company, irrespective of the size and industry. While hiring compliance officers is a great option, it could prove more costly in the long run. Statutory compliance outsourcing gives your work in experts’ hands and is cost-effective.
If you have not yet outsourced statutory compliance, what’s stopping you? Let us know your concerns in the comment section, and we will address them asap!