Prashant Singh

Aug 31, 2021
3 min read

Compliance in simple words means abiding by the law of the land and helping to create good governance, by complying with all forms of labour laws laid by the Central, State, and Local governments. The compliance ecosystem in India has gone through a paradigm shift since the Changes in Companies Act in 2013. Since then, multiple reforms have come forth to ease the landscape. In fact, last year was a milestone year, as the central government took the initiative of rationalizing the Industrial Code Bills where they simplified 44 Codes to 4 Codes.

Earlier employers and employees used to simply tick mark compliance requirements without understanding and knowing the complications and penalties and this resulted in a severe impact on their businesses in the form of penalties, fines and license cancellations. However, over a period of time, with increased awareness and rapid adoption of digitization, more serious discussions have started happening on the front of compliance.

Let’s look at the common things that HR and Compliance Leaders need to keep in check:

1. Keeping track of changing compliance requirements and laws: The compliance landscape is fast-changing and often companies miss track of these changes. But the intervention of technology has created a more seamless process now. Processes are getting automated; people are shifting from manual paper-based compliance to digital compliance. HR leaders can use the current digital platforms to keep track and manage things better.

2. Conducting periodical review and audits and adhering to the new changes in Labour Law Compliances: This gives a dipstick status as to where the organization is. Most of the companies either do this on an ad hoc or need basis. However, leaders should make this a standard practice.

3. Allocation of budgets, basic business plan, location, a complexity which leads to non-compliance and heavy penalty and jail proceedings. Since applying for a new license, amendments, renewal, notice closures, audit, advisory and visits need budgets, it's important that HR and compliance leaders closely track budgets proactively, and keep track of penalties and added costs as well.

4. Having a dedicated team or function to manage and maintain end to end compliance with business expansion and diversity: Subject matter experts either within the company or empanelled with them are much required looking at changes at various levels and states and make the job easy for HR and compliance leaders.

5. Continuous training and upskilling to enable leaders to have more clarity and expertise to handle authorities during inspections etc so that they can provide the relevant information and documents for faster processing of applications and documents.

In the future, compliance will continue to become a more important aspect for companies and organizations will expect HR and compliance leaders to be more informed and in control so that they can enable the company to function seamlessly.