The end of year – ah the festive cheer, marketing strategies on full display and companies gearing up to enter a new year with full spirits. However, for the HR department, it means more than just performance reviews. This is your reminder to formulate a compliance checklist to ensure a smooth segue in 2024!
HR compliance is about ensuring that the policies and procedures of any organization are compliant to the labour laws of the local government in your country. Simply put, it’s like a deep cleaning orchestrated by the HR teams to ensure order, and that everything’s updated & functioning as per the legal standards. This may seem like it but it’s not just a formality, but we’ll discuss why it’s important a bit later.
What to include in the year-end HR checklist
1. Performance reviews and employee feedback
While this is one feature that typically happens atleast 3-4 times through the year, but an year-end review is vital since everyone is operating on an energy to start afresh. These conversations set the tone for expectations whilst collecting knowledge on who’s ready for new challenges. Remember to collect feedback to better the company for everyone because it’s certainly not just making lists for training & promotions.
2. Benefits Compliance
Companies operating in India or in other countries need to be compliant with various compensation and deduction laws, so as to assure employees that they are being paid fairly. Ofcourse, this varies basis industries but let’s visit some important aspects:
● Records – companies need to document payroll process including details such as wages, bonuses, payslips etc, all as per HR compliance. Some such components are;
o Employee Provident Fund (EPF) – Organizations with 20+ employees need to be registered under this fund. A part of employee’s salary is deducted towards this and deposited in this account.
o Employee State Insurance (ESI) – Companies with 10+ employees must register and deposit a percentage of their salary under the Employees’ State Insurance Act.
o Bonus & Gratuity – This means awarding eligible employees with annual bonus. Gratuity is for business owners who must provide gratuity payments to employees upon their retirement, termination, or death.
o Tax Compliance – Deposit income tax from the employees’ salaries as per the ITA & rules. Employers must extend a Form 16 along with other tax related documents. Organizations must comply with timely filing of tax returns as well.
● Benefits – This is more than just a routine check! This is basically the decision maker for any employee to consider joining the company – the ultimate bait. This isn’t a just a bonus point but a key part of how you value your employees. Leave entitlements, healthcare provision, maternity & paternity benefits, reimbursement policies all account for why an employee must be devoted towards their workplace.
● Leave Encashment and Updating on HRMS – This refers to the amount of money that an employee can encash in exchange of the balance of leaves not availed during the year. This can be submitted by choosing ‘Leave Type’ or by logging on HRMS – a software application translating to human resource management system, used to store all employee related information.
3. HR Budgets
As is mis-understood, this goes beyond employees’ salaries. The tools used for recruitment of top talent, recording processes, employee engagement plans, wellness initiatives, team-building activities, recognition drives – all comprise HR budgeting. Additionally, HR teams must account for inflation and ensure a smooth functioning even in such times. Therefore, HR professionals must undertake a meticulous approach in delivering these objectives.
Why is year-end HR compliance important?
● Workforce Management: Having this checklist ensures an order and encourages HR professionals to be thoroughly informed about the workforce’s performance and management requirements. Personal development scope, reviews, feedback – it’s not about ticking off the list, it’s about imbibing a culture of transparency.
● Company culture: Beyond adherence to laws, standards etc, the year end HR checklist is an assurance to your employees. It’s an assurance that all the talk around imbibing a culture – isn’t just talk but is practiced. It’s about showing how valuable employees & their welfare is to the company.
● Setting the tone: Simply put, it’s about demonstrating to the employees that company’s gearing up and is in perfect control to take their needs into consideration whilst considering theirs. This assessment is important to ensure that benefits are not only competitive but also compliant as per the regulations.
It’s a Wrap!
Ultimately, HR teams deserve a pat on the back not only for rounding up the year meticulously and stepping into 2024 ticking boxes – but also, building a foundation for a successful new year. By navigating challenges and ensuring a trust-worthy, compliant workplace with healthy relationships.