Statutory Legal Compliances
HR Audit
What Is The Need For Statutory Compliance?
Adhering to statutory compliances is necessary for all big and small companies in the world to keep their businesses safe from the legal trouble. KPS Team has deep knowledge of statutory compliances to minimize the risk associated with the noncompliance of statutory requirements.
The Statutory Compliances Required For Indian Payroll
The common statutory requirements that companies have to follow for their payroll management in India are:
Statutory Requirements for Minimum Wages

This act provides for fixing minimum rates of wages for skilled and unskilled laborers. It not only guarantees money for bare minimum survival requirements of workers but also takes care of education, medical requirements, and some level of comfort of workers.

The Minimum Wages Act being a state subject, the statutory compliance of a centralized Payroll management is to cater for the payment of minimum wages to an organization’s workers spread out across different states. Empxtrack Payroll has the provision to map this complex requirement.

Payment of ‘Overtime’ wages to workers is also a statutory requirement as per the Factory Act & Payment of Wages Act. It affects sectors like manufacturing & construction.

TDS Deduction
Every employer who is paying salary to employees has to deduct TDS under section 192 of the Income tax Act, 1961, if the salary is more than maximum amount exempt from tax. The employers also need to generate Form 24Q and Form 16 in time. Some of the salary components that impact TDS deduction are: HRA, Special allowance, Leave travel allowance, Children education allowance, Medical allowance, Investments.
Statutory Compliances For ESI Fund And PF Deduction

ESI fund, maintained by ESIC is applicable to employees’ earning Rs 15,000 or less per month to provide the cash and medical benefits to them and their families.

PF is a compulsory contributory fund for the future of employees after their retirement or for their dependents in case of their early death.

Gratuity
Gratuity is the amount given to employees by employer when they leave the job after completing five years in service. Gratuity is calculated as Basic + DA divided by 26 * No of years of service *15.
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HR Audit

A Human Resources Audit (or HR Audit) is a comprehensive method (or means) to review current human resources policies, procedures, documentation and systems to identify needs for improvement and enhancement of the HR function as well as to assess compliance with ever-changing rules and regulations. An Audit involves systematically reviewing all aspects of human resources, usually in a checklist fashion.

Sections of review include:

  • Hiring and Onboarding
  • Benefits
  • Compensation
  • Performance evaluation process
  • Termination process and exit interviews
  • Job descriptions
  • Form review
  • Personnel file review
  • Establish HR Functions
  • Organisation analysis
  • Employee Relations

The purpose of an HR Audit is to recognize strengths and identify any needs for improvement in the human resources function. A properly executed Audit will reveal problem areas and provide recommendations and suggestions for the remedy of these problems. Some of the reasons to conduct such a review include:

  • Ensuring the effective utilization of the organization’s human resources
  • Reviewing compliance in relation to administration of the organization
  • Instilling a sense of confidence in management and the human resources function
  • Maintaining or enhancing the organization and the department’s reputation in the community
  • Performing “due diligence” review for shareholders or potential investors/owners
  • Establishing a baseline for future improvement for the function