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HR compliance is one of the most critical and challenging tasks of the HR function. There are specific statutory laws that every organisation needs to follow to ensure employee well-being and legal compliance.
Before we dig deeper into setting the right approach, let us first understand the meaning of HR compliance in detail.
What is HR compliance?
HR compliance is the process of bringing an organisation’s HR policies in sync with the labour laws prevalent at the city, state, country, and global level and in accordance with industry-specific laws. It also involves setting up a policy to ensure effective HR compliance.
Any non-compliance with laws and regulations can lead to business shutdown and increased costs due to heightened employee turnover rates. Therefore, companies must be proactive and take effective measures to ensure HR compliance.
Challenges in HR compliance
Given the long list of statutory compliance, the HR department faces many issues. Here are some challenges faced by them-
Depending on your organisation’s goal, you can have a different recruiting strategy. What compliance factors become effective when you reach out to potential job applicants? Is diversity one of the goals? Which recruitment strategy will be the most effective, considering your country’s laws, rules, and regulations?
Another critical issue in HR compliance is the issue of what and how many benefits should be given to the employees. Offering more benefits could mean more complexity in managing those compliances. Furthermore, every benefit’s pros and cons should be weighed before deciding.
Ever changing laws
The country and business-related laws keep changing at frequent intervals. Always staying updated and keeping track of it can be very difficult.
Pro tip: The best solution to this problem is to get payroll management software like RazorpayX Payroll. This software automates compliance calculations and filings to ensures that you always stay updated with legal changes. And it gets updated in case of legal changes automatically. Sweet, right?
HR compliance checklist for startups
Here are some of the best practices to ensure HR compliance:
Document policies and procedures
One of the best ways to ensure legal compliance in HR is to document all the policies and procedures important to the business. These can be tweaked later, depending on the situation. Even if it is not perfectly framed, writing down policies will reduce the time to finish a task later.
Consistent application of policies and procedures
Just documenting the procedures is not enough. The written policies should be applied consistently across the organisation. It should be done from top to bottom, and everyone in the company should follow the procedure. Moreover, the policies should be reviewed regularly to ensure consistency, and the same should be communicated to the employees through regular meetings and discussions.
The HR policies must be accessible to all employees to ensure proper compliance. This will help ensure that the employees follow them. You should also keep renewing the policies from time to time, depending on the need. Also, create a checklist to ensure all the steps in the process are followed.
To ensure further compliance, you should regularly provide your employees with proper training for the company policies. This will help them understand your expectations and avoid mistakes in the future.
Stay updated with laws and regulations
To ensure accurate and effective policy formulation, you should be updated with the laws and regulations and any changes in them. For instance, when the dual tax regime law was introduced in India in 2020, it allowed employees to choose from two different tax regimes.
Conduct regular compliance audits
Another great way to ensure HR compliance is to conduct regular compliance audits to determine if your policies and systems are effective and working correctly. Conducting regular audits will help identify the bottlenecks in advance.
Invest in technology
One of the best ways to ensure statutory compliance in HR is to invest in payroll management software like RazopayX Payroll. It automates the process of maintaining HR compliance and reduces the otherwise manual effort that is time-consuming and more vulnerable to mistakes.
Automate HR compliance once and for all – with RazorpayX Payroll
RazorpayX Payroll can help you free yourself from the worries of HR compliance management. Here are some of its features-
- Automated HR compliance such as TDS, ESI, PF, etc.
- Periodic return filing.
- Compliance reports.
- High accuracy.
- Updated at regular intervals.
What is an HR audit checklist?
It is the list of all the compliances that the company needs to follow. This checklist helps the HR department keep a track of all the compliances that have been followed and what more needs to be done.
What is an HR Compliance Audit?
An HR compliance audit is a process of checking the HR compliance policies of the organisation against the statutory requirements. It involves talking to important business people and getting more information about the business laws and regulations, and checking whether all of them are being followed or not.
Why is HR compliance important?
HR managers should stay updated about the changes in labour and business laws. HR compliance is important because it helps the organisation avoid the risk of penalties, fines, and legal troubles.