Hi! Everyone, I'm new here. I work in a private company having manpower around 500. It's a platform for medical students for preparing their entrance initially. Now it's expanding area. I'm working here as an payroll and statutory compliance executive. Prior to this, I was a teacher of mathematics. I don't have much knowledge about compliance. The knowledge I have till now is all given by the consultant hired by the company for the compliance. Earlier it was outsourced but now they hired an employee for compliance and payroll in-house.
Now the issue is both the consultant and the person appointed for compliance are having contradictory statements for almost all the compliance.
I need to present a presentation in a company for the observations made by the payroll and compliance manager on behalf of the payroll team.
Please guys help me in this matter. It will also enhance my knowledge and understanding about the compliances.
1. Our payroll manager says that we will not give statutory bonus rather, make a new pay head in gross salary bifurcation I. E. Statutory bonus. He want to make the bonus as a part of the salary. Please guide me if it is the right practice?
2. Our HR head is suggesting to stop paying overtime. Instead of paying it in monetary terms, s/he wants to give compensatory off.
As per my knowledge, if anyone does work more than statutory hours a day I. E. 9 hours, a company need to pay double wages for the extra hours an employee work and if s/he work on week offs, then the company need to pay normal wages plus compensatory off. Please suggest to me if we can stop paying overtime in terms of money and give compensatory off instead is a legal practice? Please also tell me what is the maximum overtime hours allowed in Chandigarh? In my company, we want to pay overtime to two departments only but normal wages for the extra hours they worked. So, the manager suggested changing the overtime head to other allowance or productivity bonus. Is it feasible? As still they are not fully abiding by overtime policy laid by government I. E. Double the wages.
3. If an employee is on maternity leave, will she be eligible for leave encashment? And can we give leave encashment at the time of full and final or we have to pay it annually?
4. Do we calculate ESI contribution on Referral bonus?
5. What all registers we need to maintain to comply with statutory compliance?
6. In the maternity benefit act, it is mention, in an establishment which have 50 or more employees shall have a facility of creche. Is it female employees or the total number of employees? Is it mandatory to have a creche facility?
What will be the consequences if the above said is not abide by law.
I will be glad if while answering you guys mentions laws and sections as well.
From India, Ludhiana
4Now the issue is both the consultant and the person appointed for compliance are having contradictory statements for almost all the compliance.
I need to present a presentation in a company for the observations made by the payroll and compliance manager on behalf of the payroll team.
Please guys help me in this matter. It will also enhance my knowledge and understanding about the compliances.
1. Our payroll manager says that we will not give statutory bonus rather, make a new pay head in gross salary bifurcation I. E. Statutory bonus. He want to make the bonus as a part of the salary. Please guide me if it is the right practice?
2. Our HR head is suggesting to stop paying overtime. Instead of paying it in monetary terms, s/he wants to give compensatory off.
As per my knowledge, if anyone does work more than statutory hours a day I. E. 9 hours, a company need to pay double wages for the extra hours an employee work and if s/he work on week offs, then the company need to pay normal wages plus compensatory off. Please suggest to me if we can stop paying overtime in terms of money and give compensatory off instead is a legal practice? Please also tell me what is the maximum overtime hours allowed in Chandigarh? In my company, we want to pay overtime to two departments only but normal wages for the extra hours they worked. So, the manager suggested changing the overtime head to other allowance or productivity bonus. Is it feasible? As still they are not fully abiding by overtime policy laid by government I. E. Double the wages.
3. If an employee is on maternity leave, will she be eligible for leave encashment? And can we give leave encashment at the time of full and final or we have to pay it annually?
4. Do we calculate ESI contribution on Referral bonus?
5. What all registers we need to maintain to comply with statutory compliance?
6. In the maternity benefit act, it is mention, in an establishment which have 50 or more employees shall have a facility of creche. Is it female employees or the total number of employees? Is it mandatory to have a creche facility?
What will be the consequences if the above said is not abide by law.
I will be glad if while answering you guys mentions laws and sections as well.
From India, Ludhiana
Your queries are answered at seriatim below:
1. Statutory bonus cannot be made a part of regular salary, first of all bonus is payable not in the current financial year but in the succeeding year depending on the surplus earned in the previous year. The amount has to be paid by November of the succeeding year. So technically there cannot be a spread over for 12 months.
2. Compensatory off against OT done is against statute, Section 59 of the Factories Act 1948 is breached if you are in the manufacturing sector. So it will have serious legal implications although this practice exists clandestinely. So long as it does not get the attention of legal authorities it will work fine. Here also you cannot limit OT @ double wages to certain sections and exclude certain other areas from the liability as all the workers are entitled to it. If caught you will not have any valid defence.
3. An employee on maternity leave will be eligible for leave encashment. Yes , you are required to give leave encashment at the time of full and final settlement, but there is no statutory necessity to pay it during service period. Many PSU/Govt organisations allow encashment of earned/privilege leave once a year.
4. ESI contribution is not required on Refferal bonus as it is not a regular payment and it is only paid once in a while
5. It will depend on the nature of your core activity and coverage under various statutes
6. In Maternity Benefit Act, an establishment which have 50 or more employees in all shall mandatorily have the facility of creche.
7. The penal provisions under the respective statutes, will have both imprisonment and fine as well as both if the law is not complied.
From India, Mumbai
1. Statutory bonus cannot be made a part of regular salary, first of all bonus is payable not in the current financial year but in the succeeding year depending on the surplus earned in the previous year. The amount has to be paid by November of the succeeding year. So technically there cannot be a spread over for 12 months.
2. Compensatory off against OT done is against statute, Section 59 of the Factories Act 1948 is breached if you are in the manufacturing sector. So it will have serious legal implications although this practice exists clandestinely. So long as it does not get the attention of legal authorities it will work fine. Here also you cannot limit OT @ double wages to certain sections and exclude certain other areas from the liability as all the workers are entitled to it. If caught you will not have any valid defence.
3. An employee on maternity leave will be eligible for leave encashment. Yes , you are required to give leave encashment at the time of full and final settlement, but there is no statutory necessity to pay it during service period. Many PSU/Govt organisations allow encashment of earned/privilege leave once a year.
4. ESI contribution is not required on Refferal bonus as it is not a regular payment and it is only paid once in a while
5. It will depend on the nature of your core activity and coverage under various statutes
6. In Maternity Benefit Act, an establishment which have 50 or more employees in all shall mandatorily have the facility of creche.
7. The penal provisions under the respective statutes, will have both imprisonment and fine as well as both if the law is not complied.
From India, Mumbai
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Statutory Compliance of a Industrial or Commercial Unit.xls
Statutory-compl iance.pdf
Statutory Compliance.zip