Table of Contents

• 1. What Is an HR Statutory Compliance Checklist?
• 2. 1. Provident Fund (PF) Compliance – EPF & MP Act, 1952
• 3. 2. Employee State Insurance (ESI) – ESI Act, 1948
• 4. 3. Professional Tax (PT)
• 5. 4. Income Tax (TDS on Salaries) – Income Tax Act, 1961
• 6. 5. Gratuity – Payment of Gratuity Act, 1972
• 7. 6. Bonus – Payment of Bonus Act, 1965
• 8. 7. Shops & Establishments Act (State-Specific)
• 9. 8. Maternity Benefit Act, 1961
• 10. 9. Equal Remuneration & POSH Act Compliance
• 11. 10. Contract Labour (Regulation & Abolition) Act, 1970
• 12. 11. Factories Act, 1948 (For Manufacturing Units)

What Is an HR Statutory Compliance Checklist?

An HR statutory compliance checklist is a documented framework of all labour, tax, and workplace laws applicable to an organisation. It ensures registrations are obtained, deductions are accurate, contributions are deposited on time, and returns are filed correctly.

Statutory compliance differs from internal HR policy compliance because it is legally enforceable.

Statutory Compliance Includes:

• PF, ESI contributions

• TDS deduction and filing

• Bonus and Gratuity payments

• Shops & Establishment adherence

• POSH and workplace laws

Ownership Structure Typically Includes:

• HR: Documentation and registers

• Payroll: Calculation and return filing

• Finance: Payments and reconciliations

• Directors: Legal accountability

Clear allocation of responsibility reduces risk exposure.

CORE ACT-WISE CHECKLIST

1. Provident Fund (PF) Compliance – EPF & MP Act, 1952

PF is one of the most strictly enforced labour compliances. It generally applies to establishments employing 20 or more persons. Both employer and employee contribute 12% of eligible wages.

Contributions must be deposited by the 15th of the following month along with ECR filing.

PF Compliance Checklist:

• EPFO registration

• UAN generation for employees

• Monthly ECR filing

• Timely challan payment

• Exit updates for separated staff

• Payroll vs ECR reconciliation

Penalties for Delay:

• 12% interest per annum

• Damages up to 25%

• Possible prosecution

2. Employee State Insurance (ESI) – ESI Act, 1948

ESI provides social security benefits including medical coverage. It typically applies to establishments with 10 or more employees (state-dependent). Employer contributes 3.25% and employee contributes 0.75% of wages.

ESI Compliance Requirements:

• ESIC registration

• Employee insurance number generation

• Monthly contribution deposit

• Half-yearly return filing

Risks of Non-Compliance:

• Interest and damages

• Employee benefit disputes

• Inspection notices

3. Professional Tax (PT)

Professional Tax is governed by state laws, meaning rules vary across India. Multi-state employers must manage separate registrations and filings.

PT Compliance Essentials:

• State-wise registration

• Slab-based salary deduction

• Timely payment

• Periodic return filing

• Renewal where applicable

Common errors include outdated slab usage and missed state-specific filings.

4. Income Tax (TDS on Salaries) – Income Tax Act, 1961

Employers must deduct tax at source based on employee income declarations and tax regime selection. Quarterly returns must be filed through Form 24Q, and Form 16 must be issued annually.

TDS Compliance Steps:

• Monthly deduction calculation

• Timely challan deposit

• Quarterly Form 24Q filing

• PAN validation

• Form 16 issuance by 15 June

Late Filing Consequences:

• ₹200 per day under Section 234E

• Interest under Section 201(1A)

5. Gratuity – Payment of Gratuity Act, 1972

Gratuity becomes payable after five years of continuous service. It is calculated using a statutory formula and must be paid within 30 days of becoming due.

Employer Responsibilities:

• Maintain service records

• Calculate gratuity accurately

• Process payment within timeline

• Maintain nomination records

6. Bonus – Payment of Bonus Act, 1965

Applicable to establishments employing 20 or more persons. Eligible employees must receive between 8.33% and 20% of wages as bonus, subject to statutory limits.

Bonus Compliance Checklist:

• Verify eligibility threshold

• Apply correct wage ceiling

• Calculate minimum and maximum payout

• Pay within 8 months from FY end

7. Shops & Establishments Act (State-Specific)

This Act governs working conditions, leave policies, and employee registers. Requirements vary by state.

Key Compliance Areas:

• Registration certificate

• Renewal (if required)

• Working hour compliance

• Leave records maintenance

• Display of mandatory notices

Digital inspections are becoming common in many states.

8. Maternity Benefit Act, 1961

The Act mandates 26 weeks of paid maternity leave and job protection.

Employer Obligations:

• Provide paid leave

• Avoid termination during maternity

• Maintain statutory records

• Provide creche facility (50+ employees)

9. Equal Remuneration & POSH Act Compliance

Equal remuneration ensures no wage discrimination for similar roles. The POSH Act mandates formation of an Internal Complaints Committee in organisations with 10 or more employees.

POSH Mandatory Requirements:

• ICC constitution

• Annual POSH report

• Employee awareness training

• Complaint documentation

Non-compliance may lead to financial penalties and reputational damage.

10. Contract Labour (Regulation & Abolition) Act, 1970

Applies when 20 or more contract workers are engaged. The principal employer must ensure contractor compliance.

Principal Employer Duties:

• Registration certificate

• Verify contractor license

• Monitor wage payments

• Maintain statutory registers

Liability can extend to the principal employer in case of contractor default.

11. Factories Act, 1948 (For Manufacturing Units)

Manufacturing units meeting threshold criteria must comply with licensing and safety standards.

Factories Act Requirements:

• Factory license

• Safety and welfare measures

• Health and sanitation compliance

• Inspection readiness documentation