Payroll is an integral part of all organizations. The payroll department is not only responsible for employees’ salary compensation, but it also plays a vital role in protecting the company’s reputation by ensuring compliance with various legislations.
When we talk about regulations and laws made by the government, our thoughts are directed towards the Indian Labor Laws and Acts. Previously laborers had to face severe discriminations like no right to work choice, unfair and inhuman working conditions, no job security, unfair wages, elongated work hours (OT) with meager wages, child labor and no redressal of their grievances. Thus the government had come up with numerous labor laws to safeguard laborers from those discriminations. One such revolutionary law is fair practice of payroll, where laborers are given fair minimum wages under Minimum Wages Act of 1948.
Payroll affects every aspect of the organization, from the reputation of the company right down to the morale of its employees.
Broadly speaking there are 2 key benefits of being compliant with payroll management:
1. Employee morale:
A critical aspect of payroll is its impact on the morale of the employees. Organizations should strive to retain their existing talents by raising their morale. Employees need to feel assured that they can be paid on a consistent and timely basis and also assuring of other benefits like PF, ESIC, insurance if applicable under law. A late and inaccurate payroll might cause employees to question the financial stability of the organization. This might compromise on the work climate within the organization, resulting in underperformance and ignorant behavior towards the organization. Thus being payroll compliant will help elevate employee’s morale and consequently increase their productivity.
2. Organizations Reputation:
In addition to the financial obligations that an organization has towards its employees, the organization has to ensure that its payroll activities adhere to the country’s tax obligations and comply with employment legislations. The efficiency of meeting tax obligations on time and upholding of legislative laws which can further establish the organization’s reputation as a stable employer. With this value-added branding, it will ultimately attract and retain the right pool of talent to the organizations.
The benefits reaped by being compliant with the law is big, but being negligent and not adhering to payroll laws can land organizations on bigger troubles.
Risk of Non-Compliance:
Companies that do not conform to the rules and regulations put forth by the authorities, run the risk of non-compliance and this may have heavy implications on the bottom line of the business.
Some risks of non-compliance are outlined below:
- Penal actions and financial losses to the organization.
- Loss of reputation and business integrity.
- Customer loyalty is heavily impacted.
So are you an HR who is still on a hunt of how to manage your payroll activities complying with the laws and still want to keep your core duties of employee engagement on a high level???
Payroll and statutory compliance management service is the answer to your search!
Get more insights on the invaluable benefits of Outsourcing Payroll and Statutory Compliance management by clicking the above link and stay tuned for more edifying topics on payroll and compliance.