Every company has one common thing at its core – people, it’s real assets. These people are the company’s employees, who work in various roles to fulfil its purposes. For a company to perform well, it needs to be organized and streamlined, with proper norms, regulations and processes set in place. These regulations extend to every facet, including the company’s interactions with its employees and its finances. This is known as statutory compliance.
In the Human Resources definition (payroll and taxation), statutory compliance is the legal structure within which a company must conduct itself with regards to the treatment of its employees.
Why is it important?
Statutory compliance relates to the various labour and taxation laws prevalent in India. These laws change on a State and National level, and it is mandatory for companies to follow them. Non-compliance with these regulations can land a company into legal trouble such as penalties, fines, or even worse. This is why companies spend a good deal of resources for ensuring statutory compliance. Especially in the current state of affairs, where even big corporate houses are under constant watch and vigil, the compliance has become critically important.
It is important to have a sound understanding of the various labour and taxation laws in India to keep abreast with any changes that need to be incorporated, since the law is very dynamic and rules keep changing from time to time. To add to that complexity, there are plethora of laws, that need to be adhered to.
Any organization that hires employees or workers and pays them salary or wages must comply with labour laws with regards to monetary compensation, payment of taxes, protection and safety of employees and fairness of labour, amongst others.
Advantages of being statutory compliant:
For the Employee:
- Ensures fair treatment of labour.
- Prevents employees from being exploited or made to work for unmanly hours or in inhuman conditions.
- Ensures that they are paid fairly in proportion to the work that they have done, and that companies comply with the minimum wage rate.
For the Employer:
- Timely payment of taxes, which avoids a lot of legal trouble like penalties and fines.
- Helps to organize the financials.
- Helps on-boarding and exit of employees, contractors, suppliers, vendors and customers very easy.
- Help achieve uniformity across the entire organisation.
- The business will have competitive advantage as they have a proven track of being compliant, which results in strong reputation and goodwill.
We, at Channelplay are very proud and reputed for our strong compliance and payroll management system. This clearly differentiates us and provides a competitive edge vis-à-vis a plethora of other service providers.