Important Things To Know About Legal & Statutory Compliance For Time Office In India

World Bank conducted a survey in 2012 tracking 183 countries globally for ease of doing business. India is ranked 132nd in the listing and the low rating is mainly because of the high costs associated with the compliance of rules and regulations set out for businesses. There are close to 70 regulations and laws which a manufacturing unit needs to comply with. Along with multiple inspections, the units also have to file as many as 100 returns in a year!

Understanding compliance and being compliant is a big part of doing business. Not following this could lead to some serious adverse effects, hamper the organization’s brand and cause severe trouble to the employees. Whether we take into consideration statutory compliance or legal compliance, following a structured approach would lead the company towards a better future, leading to sustained growth. Only a superior operational finesse can help achieve this goal.

Here are some of the common legal and statutory requirements that companies in India need to know about and follow for their employees:

1) Working Hours

According to the provisions of Section 51 of the Factories Act 1948, no worker in any establishment can work for more than 48 hours in any week and not more than 9 hours in a day. The act also states that, in a factory, no period of work shall exceed 5 and half hours for any worker, after which, he/she is entitled to a rest interval period of at least half an hour.

2) Overtime

According to the section 59 of the Factories Act 1948, if for some reason, the worker ends up working for more than the prescribed working hours, he/she is entitled to receive wages at the rate of twice the ordinary rate of wages.

3) Compensatory Holidays

According to the section 59 of the Factories Act 1948, if a worker is deprived of any of the weekly holidays then he is allowed compensatory holidays of equal number to the holidays he/she lost.

4) Working in Shifts

Overlapping shifts are prohibited and the periods of work of an adult should not spread over more than ten and a half hours, including his intervals. Women workers are not allowed to work in a factory except between 6 a.m. and 7 p.m. Women employees, under no circumstances, are allowed to work between 10 p.m. and 5 a.m.

5) Maternity Benefit

According to the Maternity Benefit Act, every female employee who has worked for the employer for more than 80 days in the 12 months preceding the delivery date, is eligible for 12 weeks paid maternity leave and benefit.

6) Contract Labour

The Contract Labour (Regulation & Abolition) Act, 1970 holds the Principal Employer liable for the payment of wages in case the contractor fails to do so. It is also the liability of the Principal Employer to provide health and welfare facilities to the contract labourers. Principal Employer needs to maintain a record with particulars like contractors and the labour employed, rate of wages, nature of work etc. The contractor is liable for maintaining information about muster roll, wages, deductions, overtime, fines etc. The contractor also needs to issue an employment card to each worker.

7) Gratuity:

Gratuity refers to a part of the salary which the employees receive from the employers as a gesture of gratitude for if they serve an organization for more than five years. Gratuity payment is applicable to any establishment which consists of ten or more employees.

8) TDS Deduction:

All employers who pay salary to their employees should deduct TDS as per Section 192 of the Income Tax Act. This is applicable if the employee's salary is more than the maximum amount exempt from tax. As a proof of this deduction, the employers need to generate Form 24Q and Form 16 and provide it to their employees.

The HR and Operations managers of the companies need to keep themselves updated at all times with these acts and follow up regarding changes, if any. Manually keeping a tab on these rules and regulations and ensuring the compliance is a daunting task. This can take up a lot of time of HR and operations managers leaving them no time for any strategic initiatives. However, with the advent of technology and automated tools, HR managers can streamline these processes. Automated time management tools and automated payroll management systems are designed keeping in mind these statutory and legal requirements and help the HR managers in smooth functioning, without having to do all the tasks manually.

With effortless and accurate gathering, classification, processing, and recording of the required information, such systems help in effective management of human resources within an organization. Considering the fact that there are hundreds of such systems available, in our next blog post, we will cover the key features you should look for while selecting the Human Resource Information and Management System for your organization.