Running a business in India is comparatively easier than most other countries. No wonder it ranks 77th among 190 countries in the ease of doing business index. However, there are certain statutory regulations that all business owners must adhere to.
For example, every certified establishment, no matter how small, requires the owner to comply with a series of labour laws. Any violations can land the company in trouble to the extent of inviting lawsuits and penalties.
The government of India regularly updates these regulations for the benefit of the employees and ease of compliance. Because of such frequent changes in the labour laws, it can be difficult for organisations to keep track of the same.
Many companies still rely on their internal HR teams to handle their compliances. However, it is not an optimal solution. They need a knowledgeable and experienced dedicated compliance manager who is thoroughly updated about the changing compliance landscape and is available to manage the day-to-day compliance activities.
Are you a business owner wondering if hiring a compliance manager is worth it? Scroll on to know where they can save you time and money, besides ensuring end-to-end compliance.
1. Statutory registrations
A dedicated compliance manager can help you manage labour law compliance registrations and obtain licenses, which could take a lot of time for your company. All you have to do is give them the required details about your organisations strength, nature of the business, insurance and legal status, and they will take care of the rest.
2. Payroll compliance
Instead of giving the task to your HR department, you can hire dedicated compliance managers to handle payroll compliance and related responsibilities. Payroll compliance is a complicated task, and the HR team may not be equipped to manage the same. There are various aspects such as adherence to minimum wages, regular calculations of the Provident Fund amount, insurance details, gratuity component, etc. that need to be considered in payroll compliance. The dedicated compliance managers who are updated about the latest laws and regulations can ensure efficiency and accuracy in payroll management.
3. Audits
Under the Contract Labour Act 1970, every Indian establishment should maintain statutory compliance while hiring contractors, or indirect labour. Conducting contractor audits to ensure compliance involves evaluating details of contractor registration, PF deductions, ESI certification, records of payables, taxes and duties along with bank account and cash flow. Similarly, vendor audits that determine the capacity of your vendors/suppliers to maintain regulatory compliance is a time-consuming but critical task. The dedicated compliance manager can help conduct these audits and provide you with a detailed assessment of your contractors and vendors from time to time.
4. Remittance and returns
Managing remittance and returns, storing receipts, and calculating taxes and interests are critical aspects of compliance management. According to the new TDS-like amendment in the remittance scheme proposed by the Indian Government in February 2020, companies sending money abroad must account for those in income tax returns. From checking KYC documents, mentioning the purpose of remittance, to choosing the best RBI-approved institution to send money abroad, the compliance manager can handle everything. They will also ensure your company is 100% updated in income tax returns filing before sending the remittance.
5. ESIC Registartion and compliance
The Employee State Insurance Scheme of India (ESIC) is aimed to maintain a healthy work environment and motivate the employees by covering their medical expenses in the events of maternity, injury, death, disability or general sickness. Under the ESI Act 1948, the employees earning INR 15,000 or less per month are mandated to register for ESIC. The registration process can be quite complicated with a plethora of documents to manage, like business registration certificate, list of employees, PAN card details, employee compensation details, list of shareholders, business partners, directors and so on. A simple mistake in the registration process can lead to severe penalties. To prevent such mishaps, its advisable to take the help of a dedicated compliance manager to manage these aspects.
6. Managing notices and meeting officials
Managing legal notices and meeting government officials to settle disputes can take up a lot of time. Not all business owners can afford the time to attend court hearings, rummage through documents, and help their lawyers settle major disputes. A dedicated compliance manager, who is both knowledgeable and experienced in such incidents, can take care of your responsibilities on the companies behalf, thus letting you focus on other aspects of your business.
7. Monthly and quarterly reviews
Reviewing the compliance status of your company is necessary to avoid disputes and penalties. From VAT, GST and other tax compliance reviews to statutory financial reporting, a dedicated compliance manager can provide all the required information to the company stakeholders on a monthly and quarterly basis so that they are always updated.
8. Legal expertise and guidance
There are various legal consequences of the business decision you take regarding payroll and similar aspects of your business. It’s hard to be aware of those unless you are a legal professional. So, when in doubt, you can reach out to a dedicated compliance manager to resolve the same and take suitable decisions without violating the statutory regulations unintentionally. You can also get him to review important business decisions to ensure compliance before you implement them in your organisation.
9. Compliance data management
Besides ensuring compliance in all aspects of your business, the compliance manager can also help you store, regulate, and manage all the compliance-related data securely. By maintaining the data and making it available immediately when needed, they can help you ensure that you have end-to-end visibility in all the compliance matters – from anywhere, anytime.
Final words
The inability to maintain compliance with updated labour laws may hinder your ambitious projects and prevent your business from expanding its operations.
Hence, to ensure a better future and unstoppable growth, you should consider hiring a dedicated compliance manager.
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Ph. 97646 00050
Email: sudhir.pande@coreintegra.com
