Tick these off your ‘to-do’ list before 31st December
December is a popular month of reflection. We sit back to reflect upon what went well and what could have gone better in the year nearly gone by. Equally, all of us brim with hope and excitement to usher in the New Year, round the corner and what all it will bring.
Well, let’s get down to business then to close off the year in style. There are a couple of tasks that need to be mandatorily completed by the 31st of this month.
Topping this list is the activity to ensure all employees have availed their paid leaves before this year ends or alternatively have them update their leave balance appropriately in the Time & Attendance portal. An all-employee communication must be sent by Payroll or by the HR function to remind all employees of the same. This exercise will help Payroll to determine if the unavailed leave balance should be carried forward to next year or to allow employees to encash them or allow it to lapse, depending on Company’s HR policy. Paid leave is equivalent to cash outflow for the Company and hence it is important for this exercise to be completed.
Subsequently, Payroll should keep the systems prepared to be able to allot the next year’s leave quota to all employees on the 1st of January along with any leave balances being carried forward by the employees.
The other equally important statutory compliance activity this month is the deduction and remittance of Labor Welfare Fund (LWF). Each state has prescribed its own amount of deduction to be made from employees and employer’s contribution, as well as returns to be filed.
Many organisations begin their proof of investment submission exercise in the month of January so as to provide ample time to employees to submit their documents and claims for tax exemption. Large or medium-sized organisations prefer to execute this early in anticipation of huge volumes of documents and data. It is therefore the right time to put your systems to active test to ascertain that they withstand both stress and volume. So do check to ascertain that all features are not only working fine but are also seamlessly aligned to the latest rules & regulations. As a best in class practice, prepare an employee communication to clearly define the list of acceptable documents and supporting that will be required as proofs of investment. It will also be a good idea to include a step-by-step guide on how to use the features of the portal, so as to help first users, newest joiners or those unfamiliar with the process.
If your organisation is reporting into a US or European-based parent company, chances are bright, that you will have a (calendar) year-end schedule to prepare and submit by this December end or by early January. Begin your reconciliations of payroll accounts right away and ensure you have your schedules ready to avoid pressures on both reporting and this month’s payroll process.
Have a fully compliant great year-end then.
Wish all of you the best for a great new year.