HR Compliance Checklist: The Complete Guide 2022

HR compliance refers to the legal framework that the companies must follow at the time of carrying on the operations and treating the employees. The human resource audits are necessary to sidestep any regulatory penalty.

What is HR compliance?

HR compliance refers to the legal framework that the companies must follow at the time of carrying on the operations and treating the employees.

What is the human resource compliance checklist?

The necessary HR compliance checklist is here:

• Organization adhering to minimum wages: The Minimum Wages Act, 1948 specifies the minimum payment to be decided by the Central Government and the State Government. The wage rates vary counting on the occupation, sector, and kind of work. The employer is obligated to pay wages at least every month for a convenient duration - weekly, daily, or monthly.
   
• Company registration for Provident Fund: The Provident Fund encourages the employees to secure some part of their income. Following EPFO (Employee Provident Fund Organization) laws and regulations, the companies with at least 20 employees should register for Provident Fund. If the firm does not concede with EPFO rules and restrictions, it will draw heavy penalties.


• Company registration for ESIC (Employees’ State Insurance Corporation): The ESIC social security scheme contributes healthcare at a reasonable cost to employees and their family members. As per the ESIC Act, all companies with 20 or more employees with monthly earnings less than Rs.21,000 should record under the Act. A company is categorized under the ESIC Act obedience. The Employees CTC demands to be revised, including the ESIC employer and grant by the employee.


• Including gratuity in employee CTC (Cost to Company): Following the Payment of the Gratuity Act, 1972, the establishments such as NGOs, hospitals, and educational establishments with 10 or more employees are obliged to register under gratuity. It is a specified contribution from the employer, and the CTC includes it. Therefore, creating a Gratuity part of the employees' CTC is mandatory.

What is an HR compliance audit checklist?

The HR audit checklist is as follows:

Part one: The investigation of the functional HR policies of the organization. The emphasis remains on the deliverables of the HR department. That includes internal and external recruitment, employee retention, wages, perks and benefits, performance analysis, employee-employer relationship, training, and scope of growth.

Part Two: The examination and description of the indicators for the HR actions are - 

• Number of vacancies.
• The time within which the application should be submitted.
• Employee satisfaction.
• Internal grievance management.
• Management of the internal complaint.
• Legal complaints, and evaluation of the employee performance.

The human resource audits are necessary to sidestep any regulatory penalty. Moreover, the identification of the potential threats furnishing inputs about the competitiveness in the market in consideration of the job culture is operated by the HR audit. 

In the competitive market in the current duration, the challenge to the HR policies is not only restricted to the laws and regulations. Instead, it involves an effective impact on the productivity and profitability of the company.