statutory compliance

7 reasons for Outsourcing Statutory Compliance in 2022

Introduction

The COVID-19 pandemic sweeping the world has affected all walks of life. Businesses have also felt the impact of the pandemic and have been forced to make drastic changes in their workforce. Work-from-home has become the new norm during the past two years. This has also forced governments to amend the statutory compliance rules and regulations in line with the changed conditions.

Payroll processing and keeping the business compliant with all the statutory rules and regulations has been an onerous task and businesses have looked at different options to maintain these. Outsourcing these operations to a genuine service provider is the ideal solution under these circumstances.

The current scenario has forced companies to find new ways to overcome issues pertaining to the workforce and this has put tremendous pressure on the HR team. Staff attrition rates are on the rise and it is becoming even more difficult to handle employee issues especially when your workforce is spread over different locations and in different states. In this article, we shall discuss 7 reasons for outsourcing your Statutory Compliance in 2022.

Reason-1: Keeping the company compliant, always!

This is one of the most important reasons to outsource statutory compliance tasks to an efficient and qualified service provider. Statutory rules and regulations are prone to frequent changes and companies must keep themselves abreast of these changes as and when they are made.

This is especially true during the pandemic and its aftermath. These changes have created a lot of headaches for companies that have maintained their Payroll and Statutory Compliance in-house. When you associate with an outsourcer you can rest assured of being fully compliant as they bring in their vast experience and knowledge of the field.

Reason-2: Save Time and Money

Outsourcing Statutory Compliance can save a lot of time and money. The service provider will maintain all the records and keep the company compliant, and this is irrespective of any changes that may have taken place in these rules and regulations. Handling these operations in-house would require an expert team and would, therefore, takes up more working hours and also pushes up the cost.

Outsourcing is, therefore, cost-effective and time-saving.

Reason-3: Creates better work atmosphere

Outsourcing your Statutory Compliance tasks to a service provider, assures you of getting the task completed without any errors. This is what the management and the employees need. The employees, therefore, do not have any issues with the management with regard to their contributions and deductions. This paves the way for greater cooperation between the management and employees. The workplace becomes more harmonious and this, in turn, would create greater growth.

Reason-4: Frees the HR team

Freeing the HR team from mundane work and allowing them to concentrate on core business activities is the ideal situation that any management would look for. By outsourcing Statutory Compliance to a service provider, you are doing just that. Statutory compliance is a very critical aspect that requires expert handling. The HR team would be hard-pressed to maintain these requirements and it would naturally take their time and effort to fulfill these tasks.

When you relieve them from these tasks, you are in effect freeing them to concentrate more on core business activities that would help to grow the business. This would surely help the company to reach its target much more smoothly.

Reason-5: Assists the Accounting Department

When you outsource to a service provider, your payroll and statutory compliance requirement function very efficiently. The data generation is accurate and effort-free. This accurate information is directly available to the accounting department so that accounts reconciliation can be performed without much complication and the need for additional data entry. All accounting entries get directly posted in the accounting modules as they are fully integrated with the payroll and statutory compliance modules. This will save a lot of time and effort.

Reason-6: Ensures regular filing of statutory reports and Tax filing

Outsourcing your statutory requirements assures you of regular filing of all the statutory forms within the stipulated period. This assures regular remittance of the contributions from the employees and employer within the scheduled period.   Similarly, the handling of Tax filings and payment of tax dues will be regularized. This would enable the company to avoid fines and penalties due to late or wrong filings

Reason-7: Provide a high level of Data Security and confidentiality

Outsourcing to a service provider will ensure greater security of vital data. There is a reduced risk of mismanagement of funds and identity theft.  With in-house maintenance of these tasks, there is a greater chance of tampering of employee data.  Outsourcing prevents this possibility.

Conclusion:

Outsourcing your Statutory Compliance requirements has tremendous benefits for the company. Simply put, you can avoid a lot of headaches by keeping the company compliant with all the rules and regulations. When experts handle these issues, you are assured of greater cooperation with the employees and lesser issues with the Government authorities.

GetifyHR has earned a reputation for excellent service and its efficient handling of all Statutory Compliance requirements. During the pandemic, she has stood steadfast with her clients spread across the country and enabled proper handling of all regulatory issues excellently.

The changes brought on due to the pandemic and the new Labour Reforms that are being implemented by the Government of India are creating problems for business. However, we have been able to provide our clients with the best support to overcome these difficulties. Today, GetifyHR ranks among the very best Payroll and Statutory Outsourcing companies in India.

 

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EPF & ESI – Companies that are eligible? How to Register? What documents are required?

Introduction:

The constitution of India ensures social-economic justice to the people and establishing of a Welfare State.  The inequalities in the society were slowly being dismantled by regulations brought in by the government.  One such regulation was to introduce a long-term savings scheme for employees, especially in the Private sector, that would support them in retirement or superannuation.  This regulation is the Employees Provident Fund & Miscellaneous Provisions Act, 1952.

With the view to provide further security to the employees in times of adversity like ill-health or accidents, the government introduced the Employees State Insurance (ESI) scheme in the year 1948. Both these acts have gone a very long way in supporting the employees in the organized sector when they are out of job and in times of adversity.

The EPF Act

EPF Act:  the EPF act ensures that all employees have to contribute a percentage of their basic salary to the EPF every month.  An equal is contributed by the employer towards the fund. The amount so contributed would earn interest and can be withdrawn under certain conditions.  The scheme is managed by the Employees Provident Fund Organization (EPFO).

Eligibility – for Employer

Any organization that has 20 or more employees is required to register with the EPFO and contribute towards EPF.  However, subject to certain conditions even organizations employing less than 20 employees are permitted to register and contribute to the fund.

Eligibility – for Employee

Any employee drawing a monthly salary of less than ₹15,000/- has to compulsorily become a member of the EPF.  If any employee drawing a monthly salary more than ₹15,000/- desires to become a member he may do so subject to getting the approval from the Asst. PF Commissioner and the Employer.

How to Register?

EPF Registration is mandatory for all organizations that meet the eligibility criteria of 20 or more employees.  The registration must be obtained within one month of the attaining the minimum strength.  Failure to register will attract penalties.

The registrations can be made offline or online through the official website of the Employees Provident Fund Organization.  Online registration is an early process when you have all the required documents/information readily available, the registration form can be downloaded from www.epfindia.gov.in.

The following information has to be furnished:

Name and address of the Organization

Details of Head Office and Branches if any

Date of Incorporation/Registration of Firm

Details of ownership:  Designation and address of Directors or Partners

PAN details

GST details

Contact details:  email ID and mobile number of authorised person

Name of contact person, Address, Date of Birth, Gender, PAN, Designation and date        of joining

In addition to these, details regarding the type of company have to be furnished.

For Proprietorship Firm

Registration of Firm with date of registration

Name of the Employer

PAN details

Identify proof

Address of the Proprietor (Official)

Address of the Proprietor (Residential)

Contact Number

For Co-operative Societies (Trusts/Societies)

Certificate of Incorporation

Memorandum of Association

Articles of Association

PAN

Address Proof

For Partnership Firm

Name and address

Identity proof of Partners

Certificate of Registration

Details of Partners

For Limited Liability Partnership firm (LLP)

Certificate of Incorporation

Identify proof of Directors

Details of all Directors

Address Proof and ID Proof of all Directors

Memorandum of Association

Article of Association

Other Businesses

If Factory, then the Factory license and date have to given

First Sale Bill

First Purchase Bill towards machinery

Bank name, account Number, IFSC, address

Salary details

Employee details

Number of employees employed, Gender, Type of work

Salary details

Documents Required for ESI Registration

  1. Company Pan Card (Scan Copy & Hard Copy)
  2. Partners/Directors Pan Card (Scan Copy & Hard Copy)
  3. Current Account Cancelled Cheque Leaf (Scan Copy & Hard Copy)
  4. Company Registration Copy (ROC / Partnership Deed)
  5. Partners Details (Name, DOB, Father Name, Partnership starting date)
  6. Employees Aadhaar Card Copy
  7. Employees Bank Passbook Copy
  8. Digital Signature of Authorized Signatory
  9. Specimen Signature
  10. EPF & ESI Application forms
  11. GST Registrations Copy
  12. Rental/Lease Agreement

Steps for Online Registration

Be prepared with all the required documents

Login to the EPF website @ epfindia.gov.in

Read the instructions thoroughly

Fill in the required information

A Digital Signature Certificate of the Authorised Signatory – Proprietor/Partner/Director

Verify their correctness and then submit the form online

Type in the CAPTCHA code and click on “GET PIN” option

Enter the PIN that you receive on your registered mobile or email ID

Click on the SUBMIT button

Download the PDF

Save and take a printout of the PDF

This has to be submitted to the EPF Office.

The ESI Act, 1948

The Employees State Insurance (ESI) scheme is a welfare scheme for the benefit of employees in the organized sector.  The scheme was introduced by the Government under the ESI Act, 1948 with the objective of providing social-economic protection to employees during adverse situations brought on by ill-health or accidents.  The funding for the scheme comes from the contribution from the employee and employer.  Under this scheme, the employer contributes 3.25% of the monthly salary + dearness allowance, whereas the employees contribute only 0.75% of the salary.  Any establishment employing more than 10 employees (20 in some states) have to register with the Employees State Insurance Corporation (ESIC), an autonomous body under the Ministry of Labour & Employment, Government of India.

Eligibility

Any organization that employs 10 or more (20 or more in some states) is required to register with the ESIC and contribute towards ESI.  The Act however applies for both the employer and the employee.  In case the wage of the employee is less than Rs:176/- per day then the employee is exempted from contributing to the fund.  All employees whose salary does not exceed Rs:21,000/- are eligible to be beneficiaries to the scheme.

The ESI Act covers the following establishments:

  • Shops, Road Transport organizations, Cinema Houses/Theatres, Newspaper Establishments, Non-seasonal Factories, Hospitals & Medical Institutions, Educational Institutions, Restaurants & Hotels. If any of these establishments employ 10 or more persons, they have to register with ESIC.

How to Register?

Registration can be manual or online.  However, now the ESIC registration is fully online.  The steps involved in online registration are given below:

Step 1:  Here you have to login to the ESIC portal @ www.esic.in.  Click on the “Employer Login” option on the home screen.  On the next page click on “Signup” button and fill in the details called for and then submit the form.

Step 2:  The employer will receive a confirmation mail to the email address and mobile number provided earlier at the time of sign-up.  This email will contain the username and password details for registering as an employer under the scheme.

Step 3 :  In this step you have to fill-up the Registration Form-1.  For this you have to login to the ESIC portal and click on the “Employer Login” option and enter the User name and password received in your email or mobile.  You will get redirected to the “New Employer Registration” option.  Click on the option and you will be asked to select the “Type of Unit” from the dropdown list and click on the “Submit” button.

The Employer Registration Form_1 will appear on the screen and all the details required have to be filled in.  The details include Employer details, establishment details, and employee details.  Once this is completed, click on the “Submit” button.

Step 4 :  In this step you have to make the Payment for Registration.  Once the Registration Form is submitted, the “Payment of Advance Contribution” page will be open.  Fill in the amount to be paid and select the payment mode.  Payment of advance contribution for 6 months is required to be remitted.

Step 5 :  This is where you will be sent a system generated “Registration Letter”.  This will contain a 17 digit Registration Number and is a valid proof of registration of the employer under the ESI Scheme.

Documents Required for ESI Registration

The following documents have to be scanned and uploaded

  1. Company Pan Card (Scan Copy & Hard Copy)
  2. Partners/Directors Pan Card (Scan Copy & Hard Copy)
  3. Current Account Cancelled Cheque Leaf (Scan Copy & Hard Copy)
  4. Company Registration Copy (ROC / Partnership Deed)
  5. Partners Details (Name, DOB, Father Name, Partnership starting date)
  6. Employees Aadhaar Card Copy
  7. Employees Bank Passbook Copy (If Gross is below 21 thousand)
  8. Digital Signature of Authorized Signatory
  9. Specimen Signature
  10. EPF & ESI Application forms
  11. GST Registrations Copy
  12. Rental/Lease Agreement

These two Acts have provided the employees and their dependents in the organized sector solace during times of adversity like ill-health and accidents and when they are in retirement.  They have been a great boon for such employees.