Top 5 challenges in Labour Law Compliance in 2023

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How labour law compliance is your organisation’s saviour 

 

The regulatory environment of India is quite dynamic. There are multiple websites that focus on Compliance notifications. Central, State and local governments publish notifications, circulars, and gazettes on any given day. These often result in multiple changes due to various requirements such as forms, dates, calculations, and procedures among others which ultimately leads to critical changes to compliance obligations. Organisations require specific expertise and resources to remain compliant with the changing rules and regulations of labour laws, the absence of which could lead to many issues that hamper operations, finances and the overall credibility of a business. These compliance challenges are ever-changing as the company expands its footprint across India. Each state has their separate compliance laws and bylaws. This requires organisations to be consistently vigilant and keep track of the relevant rules. There are multiple changes at any given point in time.

Here is a list of the challenges faced by an organisation in due course of being compliant:

 

1. Lack of Resources in Companies

 

Most companies do not have the required bandwidth to look into compliance issues. Many companies have a minimal amount of people forming a compliance management team. Additionally, a company secretary is usually also tasked with the role of compliance management. This directs their focus from their core task of handling company law, resulting in inefficiency in both law and compliance aspects.

A small and disorganised team is inadequate to successfully assume control of the massive task that is compliance. Companies need dedicated resources and a focused approach to successfully be Compliant.

 

2. Lack of Labour Law Compliance expertise 

 

In India, medium and large enterprises have to deal with multiple acts, licences and registrations. Moreover, they also have to adhere to hundreds of compliances and have to keep track of innumerable filings in a given year. These are not just limited to the respective state where the industry is located. They even need to follow the labour law compliance standards bestowed by both, the central government and local government regulators.

Adhering to such a complicated process requires the right expertise, technology and someone who is well acquainted with the procedures. A typical medium or large enterprise can hardly manage to sustain itself in this competitive industry. Many companies end up flouting the compliance norms in one aspect or the other due to the lack of labour law consultants. They lack the process of knowledge to cope with the dynamic of labour laws. Moreover, a majority of enterprises don’t know or don’t possess detailed information on all acts and compliances that apply to their business. Also, business owners are mostly unaware or ignorant of the repercussions of non-compliance.

 

3. Unfamiliarity with laws

 

Usually, management is unaware of the contrasting compliances relating to their industry. Even members have a limited understanding of compliance requirements and their importance. The top management is unable to establish the right guidelines in the upper echelons.

This unfamiliarity within the members affects the entire organisation and hinders the overall efficiency of the organisation. Moreover, labour laws are constantly changing, it is difficult to

 

4. Redundancy and use of technology

 

The majority of companies in India operate a people-dependent and paper-based model, wherein they organise their compliance obligation on spreadsheets and use e-mails to follow up. This can cause loss of ownership and exceeding deadlines which lead to penalties and notices from the relevant authorities.

Crucial compliance documents can get misplaced or cannot be tracked. Physical copies of statutory registers, files and historical fines go missing. This leads to an environment of unnecessary stress and strain among the management. The absence of digitisation and sole dependence on paper and manual work pose a real threat to compliance.

 

5. Vigilance in matters of revision

 

One of the many compliance-related challenges that organisations face is that legal updates or any changes in compliance obligations are out of reach.

India has a highly erratic compliance ecosystem. Laws are ever-changing and there can be a multitude of changes in a given year. Most of the time, these updates result in a change in interest computation, structures, dates, penalties, forms and many other such aspects which require appropriate and timely changes and accurate filings, registration and return. These updates are generally listed in numerous government websites and other official channels.

With multiple departments and different announcements from each department, it is tough to keep track of all these changes manually. If you miss any of those updates, it can lead to adverse effects. Modern technology is the best way that a business can overcome this challenge and keeping track of updates is easier.

 

 

Find the right partner to overcome these challenges

 

Prompt Personnel is where you search for the best HR consultants in Mumbai, India.  a team of recruiters and labour law consultants to open avenues of growth & success for your organization. With over 3 decades of expertise in Labour Law services, and compliance capabilities in 28 states and 8 union territories, you can place your trust in us.

We offer Temporary Staffing, Permanent Staffing, Labour Law Compliance Management & Advisory, and all end-to-end HR outsourcing services.

FIND THE RIGHT HR PARTNER


Take advantage of our HR experts, team of recruiters and labor law consultants to open avenues of growth & success for your organization. We offer Temporary Staffing, Permanent Staffing, Labour Law Compliance Management & Advisory, and many more such services.


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