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Which Payroll Processes are the most time consuming and how to streamline them?

Payroll is the process by which the net pay of an employee and includes the benefits that you provide to each employee or group of employees and the deductions that must be made depending upon the salary. This is a complex process that requires a high degree of accuracy to avoid problems that may affect the growth of the organization.

Streamlining this process and ensuring accurate and timely payment of salary is vital as any inaccuracies will negatively impact the morale of the employees and affect productivity. Adhering to the various laws and regulations such as labour laws, EPF and other statutory compliance requirements is critical. Non-compliance with these rules and regulations can lead to serious legal issues that may lead to financial consequences.

The onus is on the management to see that the employees are happy and the company is fully compliant of all the statutory rules and regulations. To achieve this you will need a perfectly working Payroll system that can generate accurate payslips and maintain all employee related records up-to-date and accurate. In this article we delve into the most time consuming process in the Payroll and on how the entire process could be streamlined for ensuring smooth functioning.

Steps to process Payroll
Which Payroll Processes Are the Most Time-Consuming
How to Streamline Them?
How GetifyHR Helps You??

1. Steps to process Payroll

The entire Payroll Process can be dived into 3 stages, namely, Pre-Payroll stage, Actual Payroll processing stage and Post-Payroll stage.

1.1 Stage I – Pre-Payroll stage

1.1.1 Choosing the right Payroll system

Choosing the right Payroll system is critical for the smooth working of the process. Payroll process is a complex process that requires utmost care and effort to function smoothly. There are three basic payroll systems that you can choose from and they are:

Manual Payroll
Payroll using in-house Software
Outsourcing Payroll

Manual Payroll: Manual Payroll is processing the payroll manually either on paper or on a spreadsheet. This is a time consuming process and requires dedicated effort. The possibility of manual errors is high.

Payroll Processing using specialized Software: Fully customized Payroll Software are now available that offer everything from basic payroll operations to highly complex operations that include time tracking and even human resource services.

Outsourcing Payroll: Here the entire payroll process is outsourced to an external agency that performs the entire operations with the use of high end technology. The entire gamut of payroll processing right from inputting data to handling the rather complex statutory compliance requirement is handled by the outsourcer.

These three Payroll systems have their own pros and cons and a thorough study based on your requirement has to be undertaken before you make the choice. Factors like the number of employees, work hours, employee benefits, and the complexity of the Statutory Compliance requirements for your state have to be fully studied before deciding on the type of system you prefer.

1.1.2 Create a Payroll Policy that suits your workplace.

Take time to review the existing labour laws, working hours and overtime laws, and other details pertaining to employment. The payroll policy should also include the schedule for Pay dates, the mode of payment of salaries, the deduction & withholding and the benefits payable to the employees. A comprehensive study of all aspects should be made before finalising the payroll policy.

1.1.3 Gather Employee information.

Ensure that all the details pertaining to each employee is collected. Information regarding each employee’s personal details, social security details, tax filing records and details pertaining to employee health insurance, retirement savings etc have to be collated. The disbursement of salary whether by cash, cheque or direct deposit have to be defined and accurately maintained.

1.1.4 Handling Employee Updates

All the changes that have taken place during the salary period have to be updated. This would include the salary revisions, changes in deductions and tax structure and also include details of all new joining.

1.1.5 Input Validation

Once all the inputs have been received, you have to validate the data and ensure that no active employee is left out and conversely no inactive employee records are included for salary payment.

1.1.6 Tracking attendance work hours

If you are manually performing the payroll process, the paper time cards would be available and you have to add up hours, check for errors and update the data to your payroll records. Those using a Payroll processor have to verify and approve the time sheets that are available and update the system.

1.1.7 Handling Employee Leave

For manual operations, the Leave details of all employees would be available on paper and these have to be updated. For those using a Payroll software the details would be already existing in the system.

1.1.8 Processing Employee Benefits

These have to be calculated manually and the data has to be updated before you start the actual payroll generation. The employee benefit details will be available in the system for those using Payroll software. These records have to be updated before running the actual Payroll process.

1.2 Stage II – The Actual Payroll Process

Once all the updates have been made and the data validated, then you can go ahead with the actual Payroll process. On completion of the payroll process the Payslips are generated that gives the Net Pay after deduction of relevant taxes and other statutory deductions. The Payslips can be distributed to the employees along with their salary dues in the method adopted by the company.

1.3 Stage III – Post-Payroll Process

The Post-Payroll process is the final stage in the Payroll process and has the following sub-stages:

1.3.1 Salary Disbursement or Payout

This stage involves the disbursement of salaries to t he employees either by cash, cheque or direct deposit as the case may be. The company has to ensure that sufficient funds are available in the Bank Account to meet the payments. The Bank has to be informed about the payment and a statement has to be issued providing details such as Employee ID, Bank A/c. No. and the amount of salary etc. For those using a Payroll Software that has the Employees Self Service (ESS) module, the payslips can be published and the employee can login to their account and access the payslips.

1.3.2 Statutory Compliance

During this process all the statutory deductions like EPF, ESI, TDS, PT etc that have been deducted during the Payroll process are remitted to the respective government accounts. Payment dues are made via challan and the frequency will be according to the type of dues. Once these payments have been made the returns/reports are generated and filed with the authorities.

1.3.3 Accounting the Payroll

Salaries make up a significant part of the expenses incurred in a business. These expenses have to be properly accounted for and reconciled so that the company maintains accurate and complete financial records and ensure full compliance with all statutory and tax regulations. Keep track of all the expenses related to Payroll including salaries, overtime wages, bonuses and benefits. This will enable the management to get an accurate overview of the total payroll cost and help with budgeting and financial planning.

2. Which Payroll processes are the most time consuming?

The Payroll process in its entirety is a highly complex activity that has to be performed with great care and expertise. All the activities involved in payroll are complex processes that only vary in the degree of complexity. However, among these activities the most time consuming and complex processes are the following.

2.1 Tracking Attendance work hours

2.2 Payroll Adjustments

2.3 Processing Employee Benefits

2.4 Manual Payroll Calculations and Salary Revisions

2.5. Tax Collections and Statutory Compliance

2.1 Tracking Attendance work hours

Tracking Attendance work hours is one of the most time consuming tasks in Payroll processing. Calculating employee hours, overtime, deductions and taxes is a difficult task when handled manually. Accurately tracking employee hours is a challenging task, more so for remote or part-time employees. The process is not only tedious, but is also prone to errors. This can lead to discrepancies in the pay slips that will result in employee dissatisfaction leading to disharmony in the workplace. Where the employee strength is very low, tracking work hours will be effective but when the workforce strength is high it is prone to errors.

2.2 Payroll adjustments

Payroll adjustments refer to any change in the employees’ regular pay. The changes can be a temporary or permanent increase or decrease of an employee’s pay. Either way, it is important to perform this process accurately for wages and hour compliance. This is a complex process as any change in employment status, change in salary or wages, overtime wages, change in wage work hours and change in benefits and allowances will have its effect on the entire payroll process. Any change would naturally reflect in the compliance requirements and therefore, it is vital that these are handled carefully to avoid non-compliance with the statutory requirements.

2.3 Processing Employee Benefits

The benefits to Employees include providing health insurance and other key benefits. Normally the HR department is entrusted with the job of administering this process. A typical employee benefit administrator is entrusted the task of developing a benefit program, coordinating with the benefit provider, facilitating the enrolment of employees into the program and assessing the eligibility of employees for the benefits.

The most common types of employees’ benefits include

Health Insurance Coverage
Retirement Plans – 401(K)
Disability Insurance
Paid time Off
Parental Leave
Wellness Programs

This is complex process that requires efficient handling through a dedicated team.

2.4 Manual Payroll Calculation and Salary Revision

Manual Payroll Calculations are based on the frequency of payment and their hourly wage. In an employee is working your company for Rs:250/- per hour on a frequency of biweekly payment, then he will get 40 hours/week x 2 weeks = 80 hours x 250 = 20,000/- as gross payment. If the employee has worked overtime, it is paid at 1.5 times the workers regular pay rate. Supposing he has worked for 10 hours overtime per week then the calculation would be 10 hours x 2 weeks = 20 hours x 375 = 7,500/- (gross overtime wage).

The Payroll calculation of a salaried employee is paid for each working period. Since the salary is fixed it is easier to manually process the salary. Salary revision is the process of reviewing and changing the compensation and benefits package of employees within the organization. The process involves adjusting employees salaries based on various factors such as performance, market trend, cost of living and company budget.

These changes should be informed to the employees and the relevant changes must be made in the payroll calculations during the scheduled pay period. The process has to be performed with utmost care and accuracy as any mistake would be reflected in the payslip generated. Any mistake in the process would dampen the morale of the employees and pave the way for disharmony in the workplace.

2.5 Tax Calculation and Statutory Compliance

Tax calculations and Statutory Compliance are two vital factors that have to be carefully handled while processing the payroll. The Tax and Compliance calculations include:

Income Tax – TDS
EPF and ESIC, LWF & Payment of Gratuity
Labour Laws

Income Tax – TDS

Tax Deducted at Source (TDS) is one of the most important statutory regulations that every business has to adhere to. The purpose of the regulation is to collect Tax from the source of an individual’s income and these include salaries, interest and commission.

Individual Assessees were given the option of following the Old Tax Regime or the New Tax regime (23-24). However, in the budget announcements for the year 24-25, a New Tax Regime has been introduced that has made some changes from the earlier New Tax Regime 23-24.

The relevant Tax slabs for all the three tax regimes, Old Tax Regime, New Tax Regime 23-24 and New Tax Regime 24-25 (AY 25-26) are detailed below:

Old Tax Regime for Individuals

Taxable Income	Incometax Rate
Upto ₹ 2,50,000	NIL
₹ 2,50,001 to ₹ 5,00,000	5% above ₹ 2,50,000
₹ 5,00,001 to ₹ 10,00,000	₹ 12,500 + 20% above ₹ 5,00,000
Above ₹ 10,00,000	₹ 1,12,500 +30% above ₹ 10,00,000

New Tax Regime FY 23-24

Taxable Income	New Tax Slab Rate – FY 23-24 (AY 24-25)
Upto ₹ 3,00,000	NIL
₹ 3,00,001 to ₹ 6,00,000	5% on income exceeding ₹ 3,00,000
₹ 6,00,001 to ₹ 7,00,000	₹ 15,000 + 10% on income exceeding ₹ 6,00,000
₹ 7,00,001 to ₹ 9,00,000	₹ 25,000 + 10% on income exceeding ₹ 7,00,000
₹ 9,00,001 to ₹ 10,00,000	₹ 45,000 + 10% on income exceeding₹ 9,00,000
₹ 10,00,001 to ₹ 12,00,000	₹ 50,000 + 15% on income exceeding ₹ 10,00,000
₹ 12,00,001 to ₹ 15,00,000	₹ 90,000 + 20% on income exceeding ₹ 12,00,000
Above₹ 15,00,000	₹ 1,50,000 + 30% on income exceeding ₹ 15,00,000

New Tax Regime FY 24-25 (AY 25-26)

Taxable Income	New Tax Slab Rate – FY 24-25 (AY 25-26)
Upto ₹ 3,00,000	NIL
₹ 3,00,001 to ₹ 6,00,000	5% on income exceeding ₹ 3,00,000
₹ 6,00,001 to ₹ 7,00,000	₹ 15,000 + 10% on income exceeding ₹ 6,00,000
₹ 7,00,001 to ₹ 9,00,000	₹ 20,000 + 10% on income exceeding ₹ 7,00,000
₹ 9,00,001 to ₹ 10,00,000	₹ 20,000 + 10% on income exceeding ₹ 9,00,000
₹ 10,00,001 to ₹ 12,00,000	₹ 50,000 + 15% on income exceeding ₹ 10,00,000
₹ 12,00,001 to ₹ 15,00,000	₹ 80,000 + 20% on income exceeding ₹ 12,00,000
Above₹ 15,00,000	₹ 1,40,000 + 30% on income exceeding ₹ 15,00,000

EPF and ESIC

The Employee Provident Fund is a social security scheme administered by the Employees Provident Fund Organization. EPF is a contribution towards the welfare of the employee and requires both the employer and employee to contribute a certain percentage of the Basic pay + DA. As per the Act, both the employer and employee have to contribute 12% of Basic Pay + DA towards EPF. Every organization that 20 or more employee has to comply with the EPF regulation.

Employees’ State Insurance (ESI) is a social security measure administered by the Employees’ State Insurance Corporation (ESIC). ESI helps employees to overcome unforeseen circumstances including medical expenses, maternity leave or disability due to mishaps at the workplace. ESI is mandatory for establishments employing 10 or more employees and for employees whose earning is less than ₹ 21,000 per month.

Every eligible establishment has to remit the contributions towards EPF and ESI to the concerned department along with the required returns within the stipulated time frame.

Labour Welfare Fund

Labour Welfare Fund was enforced to provide the employees a means to improve their working conditions, for social security and to raise their standard of living. The Labour Welfare Board of each state determines the amount and frequency of contribution and these differ from state to state.

Payment of Gratuity Act

The Payment of Gratuity Act, 1972 stipulated that the employer has to pay Gratuity to their employees for the services rendered by him during the period of employment. Any employee who has completed a minimum of 5 years of service in an organization is eligible to receive Gratuity.

Labour Laws

An array of Labour Laws have to be adhered to by all companies and these include The Payment of Wages Act, 1936, The Minimum Wages Act, 1948, The Payment of Bonus Act, 1965, and The Maternity Act, 1961.

The Payment of Wages Act, 1936

The Payment of Wages Act ensures prompt payment of wages with the accepted time frame. The preferred payment mode is by cash or cheque. Bank transfers can be made only after consent from the employee. These rules may vary from state to state.

The Minimum Wages Act, 1948

The Minimum Wages Act was enacted to prevent the exploitation of employees by fixing a minimum wage rate. The minimum rate may vary from state to state and depends on certain common factors like cost of living, wage period (hourly, weekly or monthly) and job type.

The Payment of Bonus Act, 1965

The Payment of Bonus Act provides payment of Bonus to employees in an organization that employs more than 20 people. The Bonus is calculated on a percentage of the employee salary and would depend on the profits made by the organization. Employees who have completed 30 working days and have earned ₹ 21,000 or less (Basic + DA excluding other allowances) are eligible to receive Bonus.

Maternity Benefit Act, 1961

The Maternity Benefit Act was enacted to provide protection to women employees during the maternity period. Any women employee who has worked 80 days within a 12 month period is eligible to receive maternity benefit. The employee can avail maternity leave for 26 weeks. Prenatal leave can be availed for up to 8 weeks. The payment during this leave period is based on the average daily wage applicable during the period of absence.

How to Streamline the Payroll Process?

Streamlining the entire process will depend on the payroll system that you choose. As mentioned earlier, the three payroll systems are Manual Payroll, Payroll using in-house Software and Outsourcing Payroll.

Manual System can be efficient when the workforce is limited and is manageable by a small team that has sound Accounting knowledge. They may or may not use Spreadsheets for their calculations. However, there is a great probability of errors creeping into this process and the final outcome may not be always accurate. These errors may have some effect on the entire workforce and may pave the way for disharmony. As mentioned above when the workforce is limited this system may be beneficial, whereas, if the workforce is large and the attendance tracking is done manually, there is the possibility of discrepancies creeping in that may lead disenchantment with the management. This will negatively affect the growth of the organization.

Payroll using In-house software is an efficient way to handle your payroll. You may opt for either Ready-made software which has its limitations or go in for customized software that will be able to handle all your requirements. A fully customized Payroll Management software will be able to capture work hours accurately and automatically record the working hours, define time offs, breaks and overtime. All the other complex tasks can be performed with ease and a great degree of accuracy.

Once the Payslip is generated, all the related reports/returns can also be viewed and printed. The relevant payment of salaries to employees and the remittance of dues to the concerned authorities can be made along with the required returns. Once the payroll activities are fulfilled, it is only a matter of generating the Payslips and all the required reports/returns are available at the press of a button.

Most of the current software is fully automated and integrated. This will eliminate the need for manual intervention and simplifies data input and validation of output. The entire payroll process is streamline to maximize efficiency.

However, the drawback is that errors may happen at the time of data entry which may have its effect on the final outcome. Also any change in the Statutory Compliance rules and regulations does not get automatically updated. This requires manual intervention and the onus is, therefore, on the HR team to keep this aspect fully updated.

The most efficient system is to outsource the entire Payroll processing to a professional Payroll outsourcer. This may be costly, but over a period of time the accurate performance would far outweigh the cost incurred. The main advantage of payroll outsourcing is that it eases the compliance burden and provides peace of mind. At best payroll outsourcing removes the burden of maintaining an in-house processing team and gives you the convenience and sophistication of a professional payroll management system that is error-free.

By outsourcing, all core payroll tasks are handled with ease and all payments are made on time and accurately. The biggest advantage is that you are 100% compliant with all the statutory rules and regulations.

How GetifyHR can help you?

GetifyHR is one of the leading outsourcers of Payroll Processing in the region. Based out of Coimbatore, Tamilnadu, we have been providing highly professional service to a large number of clients across Indi. We provide a high-end cloud-based, seamlessly integrated package that streamlines Payroll Processing, HR Management, Attendance & Leave Management, and Statutory Compliance rules and regulations. An association with GetifyHR will help you to achieve tangible benefits by ensuring cost and time savings, thereby improving productivity and the performance at all service levels.

By outsourcing to GetifyHR, you will be able to generate Payslips at the scheduled time without any hitch. The payslips will be available to the employer and the relevant payments can be released to the employees once it is endorsed by the management. At the same times all the statutory dues to the concerned departments can be remitted along with the relevant returns. On completion of the process, the following reports will be prepared and accessible to the employer.

Payroll summary
Allowances and Deductions Reports
Attendance reports of all employees
Employee Leave report
Employee Overtime report
All statutory reports relating to EPF, ESI, TDS and Professional Tax.

All management reports will be generated and these will be made available to the clients as and when required.

In addition to this we offer a full-fledged Employee Service Portal. The Portal enables the employees to apply for leave, view the Payslips, declare investment details that reflect TDS exemption, keep track of all the circulars and notices issued by the management, view contribution and deduction details. View expenses/reimbursement claim details etc. A Mobile App is also available that helps employees to view certain details from their mobile phones.

All these and more facilities are available to the clients. Being a modular package, you can choose to start with regular modules and add on other modules as you grow in confidence with the performance of the package. GetifyHR assures its clients the very best of services at all times.

Budget 2025 and the Effect on Salaried Employees

The Hon. Finance Minister Smt. Nirmala Sitharaman presented her 8th Union Budget in Parliament on 1^st February 2025. This Budget has been widely welcomed by all sections of society and hailed for its forward-looking and growth-oriented proposals. A special highlight is the tax reliefs for Middle-class taxpayers, especially salaried employees.

In this article, we will analyze the benefits that salaried employees will get through the proposed changes.

Budget 2025 has increased the nil-tax threshold to ₹ 12.75 lakhs for salaried employees and individuals with a higher standard deduction of ₹ 75,000 in the New Regime made in Budget 2024 from the earlier ₹ 50,000. However, for those who opt for the Old Regime the standard deduction remains at ₹ 50,000. The tax exemptions from the previous ₹ 7 lakhs to ₹ 12.75 lakhs is a major jump and has been hailed as the biggest jump in the past 4 decades. The budget also provides TDS relief to senior citizens and other depositors making fixed deposits more attractive.

Major changes in Income Tax slabs and rates in Budget 2025

Considering the Old Tax Regime and the New Tax Regime, no changes have been proposed in the latest budget proposal. Instead, the Finance Ministry has adjusted the slabs, rates, and rebates in the New Regime (25-26) to make income up to ₹ 12 lakhs tax-free, which was ₹ 7 lakhs in the FY 24-25.

Old Income tax regime: (Existing and applicable for FY 22-23)

Old Income tax slab	Income tax rates
Income slab of 2.5 lakh	Nil
Income slab of 2.5 to 5.0 lakh	5%
Income slab of 5.0 to 10.0 lakh	20%
Income slab of 10.0 lakh and above	30%

New Income tax regime (Existing and applicable for FY 22-23)

New Income tax slab ( Previous)	Income tax rates
Income slab of 2.5 lakhs	Nil
Income slab of 2.5 to 5.0 lakhs	5%
Income slab of 5.0 to 7.5 lakhs	10%
Income slab of 7.5 to 10.0 lakhs	15%
Income slab of 10.0 to 12.5 lakhs	20%
Income slab of 12.5 to 15.0 lakhs	25%
Income slab of 15.0 lakhs and above	30%

New Income tax regime (Revised in Budget 2023)(For FY 23-24)

New Income tax slab (Revised)	Income tax rates
Income slab of 3.0 lakhs	Nil
Income slab of 3.0 to 6.0 lakhs	5%
Income slab of 6.0 to 9.0 lakhs	10%
Income slab of 9.0 to 12.0 lakhs	15%
Income slab of 12.0 to 15.0 lakhs	20%
Income slab of 15.0 lakhs and above	30%

The IT slab under the New Regime (24-25) are detailed below:

New Income Tax Slabs	Income Tax rates
Income slab of 3.0 lakhs	Nil
Income slab of 3.0 to 7.0 lakhs	5%
Income slab of 7.0 to 10.0 lakhs	10%
Income slab of 10.0 to 12.0 lakhs	15%
Income slab of 12.0 to 15.0 lakhs	20%
Income slab of 15.0 lakhs and above	30%

The Revised slabs under the New Regime (25-26) are detailed below:

Total Income	Income tax Rates
Up to ₹ 4,00,000	Nil
4,00,001 to 8,00,000	5%
8,00,001 to 12,00,000	10%
12,00,001 to 16,00,000	15%
16,00,001 to 20,00,000	20%
20,00,001 to 24,00,000	25%
Above 24,00,000	30%

The Income slabs proposed under the New Tax Regime in Budget 2025 are a great boon to salaried employees as it helps them to save Income tax up to a maximum of ₹1,14,000. These savings are based on the premise that an individual claims only the standard rebate of ₹ 75,000 under the new tax regime. However, a salaried employee can save more tax if he claims a deduction on his employer’s contribution towards the National Pension Scheme (NPS).

The savings under the proposed New Income tax regime are detailed below:

Total Taxable Income	Tax Payable as per the current Tax rates 2024-25	Tax payable as per the New Tax rates 2025-26	Income tax saved through Budget 2025
12,75,000	83,200	0	83,200
15,00,000	1,30,000	97,500	32,500
16,00,000	1,54,000	1,13,100	40,300
20,00,000	2,78,200	1,92,400	85,800
24,75,000	4,26,400	3,12,000	1,14,000
25,00,000	4,34,200	3,19,800	1,14,000

Comparison of tax payable (New Regime) for the FY 24-25 (AY 25-26) and FY 25-26 (AY 26-27)

Tax Payable FY 24-25 (AY 25-26)

Tax Payable FY 25-26 (AY 26-27)

Total Taxable Income	Tax Rates	Tax Payable	Total Taxable Income	Tax Rates	Tax Payable
Up to 3,00,000	0%	₹ 0	Up to 4,00,000	0 %	₹ 0
3,00,001 to 7,00,000	5%	₹ 20,000	4,00,001 to 8,00,000	5%	₹ 20,000
7,00,01 to 10,00,000	10%	₹ 30,000	8,00,001 to 12,00,000	10%	₹ 20,000
10,00,001 to 12,00,000	15%	₹ 30,000	12,00,001 to 16,00,000	15%	₹ 60,000
12,00,001 to 15,00,000	20%	₹ 60,000	16,00,001 to 20,00,000	20%	₹ 80,000
15,00,001 to 25,00,000	30%	₹ 1,50,000

The proposed amendments in Budget 2025 may significantly boost the number of taxpayers who opt for the new tax regime. The middle-class income groups stand to gain the most, with the tax-free limit now raised up to ₹ 12.75 lakhs for salaried individuals and individuals, and the revised slabs reducing the overall taxable liability. Statistics show that 72% of taxpayers had opted for the New Tax Regime (23-24) up from 66% in the previous year. This trend is likely to continue due to the benefits the proposed amendments provide. However, taxpayers who benefit from deductions such as HRA, Home loans, and investments may still prefer the Old Tax Regime.

The proposed changes in Income Tax rates and rebates would put more spendable income in the hands of taxpayers which would hopefully encourage tax filing compliance. The flip side is that it could possibly discourage investment in savings schemes.

Conclusion

The proposed amendments in the Union Budget 2025 will greatly benefit the middle-class taxpayer, especially the salaried employee, and leave more disposable income in the hands of individuals thus enabling higher spending and investments.

Experts believe that the much-needed tax relief was necessary for boosting consumer demand, especially as it allows more disposable income in the hands of middle-class taxpayers. The proposed changes are bound to empower the taxpayer and promote greater financial inclusivity. GetifyHR has been at the forefront of supporting the needs of our clients in fulfilling their Income Tax needs and is fully equipped to handle the proposed changes. We are there to assist all our clients in seamlessly handling the statutory compliance requirements and keep the company fully compliant.

Statutory Compliance Checklist for Starting a Business in India

India is emerging as one of the fastest-growing economies globally and is projected to become the 3rd largest economy after the USA and China in the next few years. The Corporate sector has a major role to play in this growth and this can be achieved only when they adhere fully to all the statutory rules and regulations. Therefore, it is important that any startup, whether big or small, has to fully comply with these laws. In this article we have compiled a detailed statutory compliance checklist that will safeguard the business. We hope this would be a Start-up guidance for being fully compliant of all statutory requirements.

What are Statutory Compliance and the Risks of Non-compliance!

Statutory Compliance is a framework established by the Government to regulate the operations of a business and entails meeting legal, financial, and regulatory requirements. This includes how a business treats its employees, handles its finances and HR policies. Every company regardless of its size or industry has to ensure fair treatment of the employees, safe working conditions, and regular payment of salaries, taxes, and other benefits.

Statutory compliance is a legal framework and any non-compliance will attract legal proceeding that includes fines, legal issues and damage to reputation. Complying with these compliance deadlines ensures that you are:

Avoiding Legal pitfalls: Non-compliance or late filing can lead to fines, penalties, or more severe legal ramifications.
Streamlining Operational Efficiency: Regular compliance will ensure smooth operational efficiency and avoids last minute rushes that can disrupt the business processes.
Upholding Company Reputation: Being recognized as a compliant organization boosts stakeholder confidence and maintains business goodwill in the industry.

Companies in India, including start-ups must ensure compliance in 4 key areas.

1. Industrial Relations

The provisions with regard to the payment of salaries and other benefits to employees top the list as they have to be strictly adhered to. To this effect, the provisions under the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, the Maternity Benefit Act, 1961, the Equal Remuneration Act, 1976, need to be strictly implemented. In addition to these, the Social Security contributions through the Employees Provident Fund and Miscellaneous Provisions (Amendment) 1992, The Employees State Insurance Act,1948, the Labour Welfare Fund and Payment of Gratuity Rules, 1976 have to be given due importance.

2. Labour Laws

The provisions of the Labour Laws lays out the working conditions of the employees like fixed working hours, overtime, maintenance of workplace safety standards, and prevention of discrimination on the basis of race, colour, gender or sexual orientation.

3. Tax Compliance

Tax compliance is the willingness of a taxpayer to abide by the applicable tax laws, file tax returns and pay the tax dues within the stipulated period. Tax compliance is, therefore, crucial for all businesses and being fully compliant will ultimately facilitate business growth. The types of tax compliance includes the Central taxes such as the Income Tax Act (IT), Goods & Service Tax (GST)and Customs Act and the State Government taxes like Professional Tax, Stamp Duty & Registration Fees Act, Road Tax & Motor Vehicle Act and Excise Duty. The relevant registrations like PAN, TAN, and GST are mandatory. The relevant Income Tax Returns, audits, GST Returns need to be filed along with the tax dues within the stipulated time.

4. Additional Compliance

In addition to these there are compliance laws that pertain to environmental clearance, data privacy regulation and IP protection.

The Risks of Non-Compliance

Non-compliance of the Statutory Rules and Regulations can bring about potential harm to the entire working of the company. The risks stemming from non-compliance are far-reaching and can seriously affect the company’s credibility, performance, and overall growth. We envisage the following risks of non-compliance:

1. Imposition of Fines and Penalties

Non-compliance can lead to the imposition of hefty fines and penalties by the concerned authorities. This will negatively impact the working of the company.

2. Loss of Productivity and Revenue

The workplace is thrown into disharmony due to non-compliance especially if the social security schemes have not been complied with. This disharmony leads to a loss of productivity and revenue.

3. Damages the Brand Image and Business Integrity

Non-compliance damages the Brand Image and Business Integrity of the company and this will negatively impact the company’s standing and growth.

4. Loss of Customer Loyalty

Customer Loyalty is negatively impacted by non-compliance leading to loss in business volume.

5. Government sanctions and license suspension

Non-compliance when serious and repeated many times will bring about sanctions and ultimately may lead to license suspensions by the government authorities.

Statutory Compliance Checklist

This Statutory Compliance Checklist has been designed keeping in mind the 4 key areas that companies need to be compliant with.

1. Industrial Relations

Complying fully with the rules and regulations enshrined in the Acts pertaining to Industrial relations will ensure fair working conditions, smooth resolution of disputes, and prevention of discrimination in the workplace. These rules and regulations are meant to strengthen the interests of the employees and employers and pave the way for a fair and harmonious work environment.

1.1 Minimum Wages Act, 1948

The calls to pay Minimum wages to employees had been an oft-repeated demand much before India gained Independence, and this call fructified after Independence when the Minimum Wages Act was passed in the year 1948. The Act ensures the payment of minimum wages to employees and this figure is decided at the national, state or district levels. The minimum slab may be arrived at based on the occupation and cost of living of the region where the business operates.

The Act prevents the exploitation of employees and ensures that they receive fair remuneration for their work.

1.2 Payment of Wages Act, 1936

The Act was enacted in the year 1936 to ensure that the employees receive their wages on time and in full. The Act regulates the payment of wages and lays conditions on the timing, mode of payment and deductions from wages that are allowed. Depending on the number of employees, the wages have to be paid before the 7th or 10thday after the end of the wage period. Unauthorised deductions are prohibited and it limits deductions for fines, damages or advances to specified percentage of the wages.

1.3 Payment of Bonus Act, 1965

Any company having 20 or more employees is subject to pay an annual bonus under the Payment of Bonus Act, 1965. Under this Act, eligible employees are entitled a minimum bonus of 8.33% of their annual wages or ₹ 100/-, whichever is higher. There is a maximum cap of 20% bonus payable.

1.4 The Maternity Benefit Act, 1961

The Maternity Benefit Act, 1961 has been passed to protect the health and well being of pregnant women and new mothers in the workforce. Under the Act, eligible women employees are entitled to maternity leave of 26 weeks of which 8 weeks of leave can be availed before the expected date of delivery. Employers have to pay full wages during the maternity leave period, thus ensuring that pregnant employees can avail leave without facing any financial hardships.

1.5 EPF and ESI

The Employees Provident Fund & Miscellaneous Provisions (Amendment) Act, 1992 was enacted to implement social welfare and employee security measures. The Act requires the Employee to contribute 12% of the Basic salary + DA towards the Fund with an equal amount being contributed by the employer. These contributions accumulate during the service period and can be withdrawn at retirement, resignation, or in case of any emergencies. The Employer is entrusted with the job of maintaining these records and remitting the contribution amounts to the department every month without fail.

In addition to this, the Employees State Insurance Act, 1948 offers social security benefits to employees in case of sickness, maternity, disablement, or death due to occupational hazard. Both the employee and employer contributes towards this fund at 0.75% and 3.25% of wages respectively. These contributions fund the Employees State Insurance Corporation (ESIC) and provide medical and cash benefits to insured employees and their families.

Employers have to strictly adhere to the rules and regulations, and any non-compliance will entail payment of penalty of up to ₹ 10,000/- and may also have to face imprisonment of up to 3 years.

2. Labour Laws

The labour laws are meant to safeguard employees from discrimination and exploitation on the grounds of gender. They enable all employees regardless of gender to be equally remunerated.

2.1 Equal Remuneration Act, 1976

This Act was passed to encourage gender equality as it prohibits paying women lower wages when compared to men for the same work. The purpose of this Act is to prevent discrimination against women and to economically empower them.

2.2 Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Act was enacted to prevent sexual harassment of women in the workplace and address them with diligence and in a fair manner. Any company that employees 10 or more employees has to form an Internal Complain Committee (ICC) to investigate sexual harassment complaints and is empowered to give verbal or written warning, transfer, suspend or terminate the accused if found guilty.

Not forming the ICC is non-compliance that would result in a fine of up to ₹ 50,000/- and additional fines will be imposed for additional non-compliance. The aggrieved employee can approach courts for legal action against the accused.

2.3 Health and Safety at the Workplace

This statutory compliance operates under the Factories Act and 12 other similar acts pertaining to Industrial Safety and Health. The Occupational Safety, Health and Working Conditions Code, one of the Codes under the New Labour Laws subsumed these13 Acts. The New Labour Laws were passed by parliament and notified by the Government, but is yet to be implemented.

The safety guidelines apply to all factories, mines, constructions sites and offices. The law and its rules ensure the prevention of occupational accidents, injuries and diseases. Non-compliance can lead to fines and legal action, leading to imprisonment for negligence as an employer.

2.4 Payment of Gratuity Act, 1976

Any company or start-up with 10 or more employees is governed by this Act. The Act envisages the payment of Gratuity to employees who have completed 5 years of service with the company. Contravention of the Gratuity Act can result in a fine of ₹ 20,000/- or imprisonment up to 2 years or both.

3. Tax Compliances

The Government needs to mobilize significant amounts of tax to finance infrastructure development programs. Both the Central and State Governments impose taxes on companies that are required to comply with each of these tax laws. We can classify taxes in India into two types, namely Direct and Indirect Taxes.

3.1 Direct Taxes

Direct Tax is the Tax that a company or individual pays directly to the respective governments. Some of the Direct Taxes in India are:

Income Tax or Corporate Tax
Capital Gains Tax
Security Transaction Tax
Dividend Distribution Tax
Gift Tax
Wealth Tax

These taxes are levied based on the respective tax legislation. The Income Tax Act of 1961 requires corporate or start-ups to ensure that Tax Deducted at Source (TDS) is deducted according to taxable income of the assessee. Under the TDS rule, every payment made to an assessee is subject to a TDS deduction. Employees have to deduct TDS from the employees’ wages and remit it to the department. The employees can then file a TDS return to claim a refund of the deducted TDS.

3.2 Indirect Taxes

Indirect Taxes are levied on the consumption of goods and services. The amount of taxes has no direct linkage with personal income or business profit. The following are the Indirect Taxes levied in India.

Goods and Services Tax (GST)
Service Tax
Excise Tax
Entertainment Tax

For being compliant with the Indirect Tax laws, companies need to follow the underlying tax legislations. Voluntarily disclose taxable activities, remit the tax payments within the stipulated time limits, and perform tax audits and documentation.

GST is the most important Indirect Tax legislated by the government. The new GST rules were passed under the 10th Constitution Amendment Act of 2016. All companies are required to comply with the rules under these amendments. Service Tax, Excise Duty, Customs Duty, Entry Tax, Entertainment Tax, etc., are all consolidated under one single indirect tax, the Goods and Service Tax (GST). Though the implementation of GST is complex it is essential to know the category of GST applicable to one’s line of business and comply with the rules.

3.3 Tax Liabilities for Investors

Start ups that receive funds from Investors are subject to taxation as these investments are deemed as “Income from other sources”. This is taxed at corporate rates under sections 56(2) and 68 of the IT Act. Angel Tax i.e., tax levied on investments into a Company through sale of shares above market value have seen changes that makes it taxable now for foreign investments also.

3.4 Tax Liabilities of Foreign Companies in India

Foreign companies that set up units in India are also liable to pay taxes as the IT Act of 1961 and GST rules. The following table gives details of the Taxes and Compliance requirements of Foreign Companies in India.

Types of Tax	Compliance Requirement
Direct Taxes – IT & TDS	Filing of IT Returns, TDS
Indirect Taxes – GST	GST Dues and Returns
Investor Tax	Taxes on Investments received
Foreign Company Taxes	Pay taxes as applicable to Foreign Companies in India

4. Additional Compliance

These include the laws pertaining to Environmental clearance, Data Privacy, and IP Protection.

4.1 Environmental Clearance

The regulations fall under various Acts including the Factories Act, 1948, Environment Protection Act, 1986, Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981, Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2016 and the Companies Act, 2013. Non-compliance with any of these rules will attract heavy fines, license suspension, and even closure of the unit.

4.2 Data Privacy

Companies must put in place measures to protect the data privacy of employees and customers. The Data Protection Act of 2013 and the IT Act of 2000 spells out the rules to this effect. Preventing unauthorized access, utilization, and unwanted disclosures can damage the reputation of the company and attract fines and legal proceedings.

4.3 IP Protection

The Patents Act, 1970, the Trademark Act of 1999,the Designs Act of 2000, and the Copyright Act of 1957 provide the rules for IP protection. These regulations safeguard inventions, trademarks, and designs and prevent plagiarism. Non-compliance leads to prosecution.

Ways to combat Non-compliance with all Statutory Compliance rules and regulations.

We recommend 3 ways to be compliant of all the Statutory Compliance rules and regulations.

1. Stay Updated and Audit Regularly.

Stay updated on all changes that take place in the rules and regulations. Conduct regular Audits to check your compliance performance. Your updated compliance trends and reports will help you to ascertain your readiness to be compliant always.

2. Prepare a “What to do List”.

Draw a list of the due dates applicable to all the Statutory Compliance rules and regulations and track the performance. Conduct team meetings to review the process to confirm the completion of your operation to stay compliant. Such a plan will help to optimize costs, save time, and prevent negative results.

3. Hire Professionals

You can get the assistance of Professionals who will be able to keep you updated on all the changes and maintain full compliance. This may pose to be an additional expense for start-ups; you cannot ignore the fact that being non-compliant would be more expensive.

Conclusion

Navigating the Statutory Compliance rules and regulations can be a very challenging task given the complexities of the compliance laws. Outsourcing this critical task to an external agency is the ideal solution for start-ups. GetifyHR is one of t he leading outsourcers of Payroll Processing and Statutory Compliance and an association with us would ensure greater accuracy and full adherence to all the compliance requirements. By outsourcing Payroll Services, businesses can reduce the risks associated with non-compliance and continue to focus on their core business activities.

GetifyHR offers a comprehensive solution for Payroll Processing and Statutory Compliance. With years of experience in handling this process, we ensure that start-ups can navigate through this complex set of rules and regulations with ease. Companies can handle their core business activities with greater focus and peace of mind, once they are confident that a tried and tested expert partner is efficiently handling their payroll and statutory obligations.

Comprehensive Guide to Understanding Notice Period

In the ever-changing world of work, the notice period is essential to facilitating seamless job changes. It facilitates the transition from an employee’s leaving to their replacement’s onboarding, assisting in the preservation of operational continuity. This thorough study explores the technical aspects of notice periods, with special attention to regulations, employee transitions, and notice period significance in India.

Understanding Notice Periods

A notice period is a set amount of time that an employee has to work out before leaving an organization. It’s a contractual requirement meant to provide the employer enough time to find a successor and maintain uninterrupted business operations.

An employee must serve out a notice period following their resignation from their position in order to formally quit the company. It is a common provision in employment contracts and differs among businesses, sectors, and nations. Notice periods are intended to give both the employer and the employee the time to make the necessary preparations for a seamless transfer.

Notice Period in India

In India, labor laws, corporate policy, and employment contracts all regulate notice periods. Depending on the industry norms and the seniority of the role, the notice period in India may last anywhere from a few days to several months. Junior employees usually have a notice term of thirty days, whereas senior executives typically have a notice period of sixty to ninety days.

Legal Framework:

Notice periods are somewhat regulated by the Indian labor law system, which includes the Industrial Disputes Act, 1947, and the Shops and Establishments Act. For example, a workman (non-managerial employee) who has been hired by the recruiter for a minimum of one year is entitled to one month’s notice before termination under the Industrial Disputes Act, or pay in lieu of notice. Notice periods in India, however, are mostly dictated by the terms specified in the employment contract for managerial and executive responsibilities.

Notice Period Policies

Duration and Structure:

Fixed Notice Periods: The majority of Indian businesses have a set notice time, which is typically outlined in the employment contract. This could be the same at every level or different depending on jobs and seniority.
Probationary Periods: Since this stage is seen as a trial term, the notice time is often shorter during probation, ranging from immediate to one week.
Tailored Notice Periods: Organizations may occasionally bargain for a notice period that is determined by certain agreements with employees.

Buyout Option:

The buyout option pays the company for the portion of the notice period that is not used by employees who leave before it finishes. Usually, the compensation sum is equal to the wage for the unsettled notice period. With this option, workers can move on to new possibilities with flexibility and know that their employer will be paid for their abrupt resignation.

Garden Leave:

Some businesses offer “garden leave,” which allows workers to serve their notice term away from the office. This keeps outgoing staff members from gaining access to private data or stealing clients and coworkers. As per the notice period policies, employees continue to get their pay and benefits throughout this time.

Immediate Termination:

Employers are entitled to instantly terminate an employee’s employment without any notice in circumstances of gross misconduct or contract violations. To prevent legal issues, these acts must be justified and documented.

Employee Transitions

Handover Process:

To guarantee a seamless employee transition, a clearly established handover procedure is essential. It entails the leaving employee giving their expertise, duties, and continuing tasks to a new hiring or a selected coworker. Sessions for exchanging expertise and thorough documentation are crucial parts of this process.

Knowledge Transfer:

Transferring knowledge effectively is essential to reducing interruptions. Employees who are leaving should record their work procedures, important contacts, and any unresolved matters. Frequent encounters with the successor can help to impart implicit knowledge that might not be recorded..

Exit Interviews:

Exit interviews offers insightful information about the factors that led to an employee’s leaving. Organizations can use this input to pinpoint areas for development and make adjustments to promote staff retention.

Successor Training:

In the event that a successor has been chosen, giving them sufficient training during the notice period guarantees that they are equipped to assume the position. Both organizational culture and technical factors should be included in this training.

Effects of Notice Periods on Workers

Notice period in India has a big influence on a worker’s career change and job hunt. An employee’s capacity to quickly investigate other options may be hampered by a prolonged notice period. In the event that the departing employee cannot find employment quickly after quitting, it could potentially result in financial difficulties. Conversely, a shortened notice period could make it more difficult for the employer to maintain business continuity.

Instigation on Morale and Productivity of Employees

Reduced Morale: Workers who are keen to explore new prospects may experience a decline in morale as a result of prolonged notice period policies. Job satisfaction and productivity may suffer as a result.

Decreased Engagement: Workers with extended notice periods may become disengaged from their jobs and concentrate more on looking for new employment than on their existing duties.

Higher Turnover: Employees who feel trapped by lengthy notice periods are more inclined to quit suddenly and before using up the entire notice period, which raises the turnover rate.

Sway on Business Operations and Employers:

Trouble Finding New Employees: Extended notice periods may complicate the process for businesses in finding qualified replacements promptly, which could cause disruptions to business operations.

Increased Costs: During the notice period, employers may have to pay more for overtime, temporary workers, or outsourcing in order to fill open positions.

Intellectual Property Loss: Prolonged notice periods in India raise the possibility that departing employees will take important information or knowledge with them, which might be detrimental to the company.

Effect on the Job Market:

Whole Talent Acquisition Difficulties: Prolonged notice periods can impede the free flow of talent in the employment market, making it more challenging for businesses to quickly fill open positions.

Decreased Employee Mobility: Strict notice period regulations/ requirements may restrict an employee’s ability to move about, which may hinder their capacity to learn new skills and pursue new career prospects.

Economic Impact: By impeding the effective use of human resources, extended notice periods may be a factor in the economic downturn.

Conclusion

Understanding the intricacies of notice periods is essential for recruiters to manage employee transitions effectively. In India, notice periods are influenced by a combination of contractual agreements and labor laws. The best Compliance and Payroll Service Provider, GetifyHR, will provide the help you need if you require any clarification understanding notice periods. Our services provide error-free payroll processing, maintain compliance, and enhance employee satisfaction. By implementing well-defined notice period policies, facilitating smooth handovers, and maintaining clear communication, recruiters can ensure seamless transitions that benefit both the organization and the employees. As the employment landscape continues to evolve, GetifyHR ensures that its clients always stay informed about best practices and legal requirements surrounding the notice periods in India.

The Ultimate Employee Onboarding to Offboarding Checklist

Any firm that wants to successfully navigate the trip from first interest to final farewell must have an efficient employee lifecycle. A well-organized onboarding procedure gives new hires a feeling of community, opens doors, and positions them for success. On the other hand, a smooth offboarding procedure guarantees a happy exit and upholds the reputation of your business. With an emphasis on onboarding, offboarding, training, and employee well-being, this extensive resource covers best practices for managing the employee lifecycle.

This extensive blog post is your go-to resource for information on managing the employment lifetime. We’ll go into best practices for onboarding and offboarding employees, as well as the significance of training and employee well-being throughout the process.

Employee Onboarding: A Hearty Welcome Awaits

Onboarding new hires involve more than just paperwork. Making a good first impression and putting new personnel on the right track for long-term success are keys.

Here is a thorough check list to guarantee a smooth employee onboarding procedure:

Before Participating:

Extending an Offer and Taking the Position: Provide a formal offer letter that details the start date, benefits package, salary range, and position. Send out a welcome bundle containing information for the first day, company gifts, and required paperwork.
Prior to Embarking Tasks: Assign assignments like finishing background checks and getting acquainted with the company’s regulations.

Employee Onboarding Checklist

Employee Information
Academic Certificates
Previous Employment Certificates
Income Tax Papers (IT Statement) of previous employment and inform the employees to add their previous employment while declaring their investments
Signing NDA (Non Disclosure Agreements)
Sharing Appointment Letters
Induction of job role
Sharing HR Policies, Company Policies, Code of Conduct, etc

To ensure compliance and seamless onboarding, gather the following documents:

Employee Information

Full name, birth date, address, phone number, email address, emergency contact details, and social security number or similar.

Goal: Keeping correct personnel records, guaranteeing efficient communication, and handling emergencies all depend on this data.

Academic Certificates:

Attain certified copies of transcripts, degrees, diplomas, and any pertinent professional certificates.

Goal: Confirming an employee’s educational background helps to uphold the caliber and reputation of your staff by ensuring they meet the requirements for their role.

Previous Employment Certificates:

Experience certificates, letters of recommendation, and any other records attesting to prior employment history.

Goal: By verifying a candidate’s professional development, work history, and abilities, these records help employers decide whether or not they are qualified for the position for which they are applying.

Income Tax Papers (IT Statement) of Prior Employment: Copies of the most recent IT statements, Form 16, and any other pertinent tax records from prior employers.

Goal: Accurate tax compliance and calculation depend on these documents. Tell staff members that in order to guarantee correct tax deduction and benefits, they should submit information about their prior job when declaring their investments.

Signing Non-Disclosure Agreements (NDAs):

Signed NDAs that specify the conditions under which information will remain confidential.

Goal: NDAs are essential for safeguarding confidential business data and intellectual property. Ensuring that all new recruits sign these agreements contributes to the protection of trade secrets and confidential company information.

Exchange of Appointment Letters:

An official letter outlining the position, duties, pay scale, perks, start date, and any other relevant employment conditions.

Goal: By defining the terms of work, appointment letters act as a formal agreement between the employer and employee. By doing this, miscommunication is reduced and it is made sure that everyone is aware of the terms and circumstances of the job.

Job position Induction:

Details to Provide: A thorough induction program that covers the main duties, performance standards, and an outline of the position as well as preliminary training plans.

Goal: New hires need inductions to help them get adjusted to their responsibilities. A comprehensive employee onboarding process facilitates comprehension of job responsibilities, helps individuals align with organizational objectives, and expedites productivity and team cohesion.

Disseminating Company Policies, code of conduct, and HR Policies:

Information to Provide: Detailed documentation detailing the company’s ethics, code of conduct, health and safety regulations, HR policies, and any other pertinent procedural documents.

Goal: By making these materials available, employers may make sure that new hires are aware of the behavioral norms and operational requirements of the business. This helps workers understand their rights and duties and fosters a consistent and fair work environment.

By diligently collecting and sharing these documents, you can ensure a smooth and efficient employee onboarding process that sets the foundation for a successful and compliant employment relationship.

First Day:

Greetings of Welcome: Give a hearty welcome to the new hire and introduce them to important team members. Give a brief summary of the goals, core principles, and organizational structure of the business.

Workstation Configuration: Ensure that the new hire’s desk is equipped with all the devices and tools they require.
Introduction of the Manager: Call a meeting to go over objectives and goals with the direct manager.

Offboarding Employees: A Compassionate Farewell

Employee offboarding is just as important as onboarding, despite the fact that it is occasionally overlooked. A well-run offboarding procedure guarantees a seamless transition, upholds goodwill, and protects the company’s resources and expertise.

Predominant Offboarding Checklist includes:

Knowledge Transfer
Revocation of Data and Access
Return of Business Assets
Conducting an exit interview
Final Pay & Benefits
Communication of Farewell

A polite and professional employee offboarding process can be ensured by adhering to the following guidelines:

Knowledge Transfer:

To ensure that ongoing projects continue smoothly, make it easier for the departing employee’s replacement or other team members to acquire the knowledge they need. This includes sharing important contacts, recording procedures, and providing an update on the state of ongoing projects.

Purpose: Ensuring a comprehensive knowledge transfer keeps important institutional knowledge safe, maintains productivity, and helps avoid work disruptions. To make sure nothing is lost, make sure the replacement has received and comprehended the knowledge transfer.

Revocation of Data and Access:

Specifics: Cut off users’ access to email accounts, databases, and other systems used by the organization. Get login credentials for all company software and apps, as well as disable logins.

Goal: Removing access stops illegal use of business resources and guards against any security breaches of important data. It’s essential for preserving security and safeguarding confidential information.

Return of Business Assets:

Information: Collect all items that were given to the employee by the company, including laptops, cell phones, access cards, badges, keys, and any other supplies or equipment.

Goal: Ensuring the return of company property keeps inventories under control and guards against the loss of priceless equipment. It also guarantees that the leaving employee does not have any proprietary materials with them.

Conducting a Farewell Interview:

Specifics: To get input on the employee’s experience, the reasons behind their departure, and suggestions for enhancements, conduct an exit interview. Talk about the problems they had, how satisfied they were overall, and any suggestions they had for the business.

Goal: By revealing information on employee churn, exit interviews aid in pinpointing problem areas and can draw attention to matters that may require attention in order to improve staff retention.

Furthermore, if the worker is willing to reevaluate their leave, talk to them about their alternatives for a resignation withdrawal.

Final Pay & Benefits:

Specifics: Make sure that the outgoing employee’s last salary and related benefits are appropriately computed and disbursed on schedule.

Goal: Complying with legal requirements and keeping good relations with the departing employee are two benefits of making timely and precise final payments. It exhibits professionalism and gratitude for the employee’s input.

Farewell Communication:

Details: Let the team know that the worker is leaving, and make sure to thank them in public for their efforts. To show your appreciation and wish them luck in their future pursuits, organize a farewell party or send an email to the entire staff.

Goal: Expressing gratitude to the departing employee, fostering a courteous and upbeat work atmosphere, and helping

Additional Offboarding Considerations

Offer of Reemployment: Consider offering reemployment opportunities under specific conditions.
Assistance with Statutory Benefits: Help employees secure their statutory benefits to ensure a smooth transition.

Q&A:

Addressing Concerns about Employee Onboarding to Offboarding

What is the ideal duration for the onboarding process?

The duration varies based on role complexity, organizational culture, and industry. However, a well-structured onboarding process can range from a few weeks to several months.

What inventive ways can you involve new hires in the onboarding process?

Incorporate social events, team lunches, and mentoring programs to build connections and enhance company spirit. Gamify training modules to make learning more engaging.

What are some offboarding-related legal considerations?

Ensure compliance with local labor laws, including notification requirements, final pay calculations, and data privacy regulations.

Is keeping in touch with past employees advantageous?

Absolutely! A robust alumni network can provide future job opportunities, brand advocacy, and referrals.

How might technology make the onboarding and offboarding of employees more efficient?

HR software solutions can automate processes like completing paperwork, delivering training, and managing exit interviews.

How GetifyHR Can Assist With the Onboarding and Offboarding Process for its Clients

GetifyHR offers comprehensive payroll outsourcing services integrated with HR solutions to manage the complete employee payroll lifecycle—from joining to relieving. Our services include processing payroll, managing attendance and leave, and handling statutory compliance. By automating onboarding workflows.

Through the management of exit interviews, coordination of knowledge transfer, and tracking of returned company assets from a single platform, GetifyHR expedites the offboarding process. Through the use of questionnaires and pulse checks to collect employee input and improve the work experience, our performance management and feedback solutions assist in goal-setting, progress monitoring, and ongoing feedback provision. Furthermore, in order to pinpoint areas for development and optimize HR procedures, we produce informative reports on employee onboarding, offboarding, and performance data.

Conclusion

From employee onboarding to offboarding, a clearly defined employee lifecycle fosters a productive and engaging work environment. Investing in a structured onboarding process, supporting employee training and well-being, and ensuring a seamless offboarding experience can help businesses develop a loyal, effective, and high-performing workforce. Remember, a satisfied employee is a productive employee!

Are you prepared to streamline your employees onboarding and offboarding process? Speak with GetifyHR today to discover how our HR solutions can assist you.

Budget 2024: New Employment-linked Incentives for Employees and Employers in new Budget

In the Union Budget presented on July 23, 2024 Ms. Nirmala Sitharaman stated, “As part of the Prime Minister’s package, our government will implement the following three schemes for employment-linked incentive: enrollment in the EPF, focus on recognition of first-time employees, and support to employees and employers’ scheme.”

First-time employees who enroll in the EPFO are expected to profit from these three employee-linked incentive schemes:

Scheme A (one month’s salary for freshers)
Scheme B (job creation in manufacturing)
Scheme C (assistance to employers)

Bird’s Eye View:

Scheme A: one month’s salary for freshers

Those who are First-time Employment will receive a subsidy of up to ₹15,000, or one month’s salaries, under this policy. It pertains to all industries and individuals who are just starting their career with organization registered under EPFO and make less than ₹1 lakh a month. Hon’ble FM Ms.Nirmala Sitharaman declared that the employee will receive the subsidy in three installments (Direct Benefit Transfer).

Before collecting the second installment, the employee must complete a required online course in financial literacy in order to be eligible for this. Employer reimbursement of the subsidy is required if the first-time employee’s job ends within a year of hiring. The duration of this program is two years.

Here is a detailed analysis of each scheme, including its main features and advantages.

Phenomenal Advantages:

Financial Assistance: New hires will be given a subsidy equal to one month’s salary, up to ₹15,000, which will be paid out in three installments as Direct Benefit Transfer.

Inclusivity: Relevant to new workers entering the workforce with organization registered under EPFO who make less than ₹1 lakh per month, across all industries.

Financial Literacy: To encourage financial understanding, employees must successfully finish a required online course in financial literacy before becoming eligible for the second installment.

Employment Retention Incentive: To encourage longer-term employment, employers are required to return the subsidy if the employment job ends within a year.

Breakthrough: Meant to make it easier for new hires to adjust to the workplace during their first few months.

Scheme B: Manufacturing Sector Job Creation

Employers-both corporate and non-corporate that have made EPFO contributions for the past three years are eligible. It can be used in the manufacturing industry for significant first-time employee hiring. The employer is required to hire a minimum of 50 or 25% of the baseline in prior non-EPFO enrolled workers.

Employer Incentive: Designed to encourage long-term EPFO membership, this incentive is applicable to companies that have contributed to the organization for three years.

Targeting significant recruiting in the manufacturing industry, the law requires firms to add at least fifty new employees, or 25% of their current workforce, whichever is higher.

Economic Growth: The program seeks to promote industrial growth and economic development by concentrating on the manufacturing sector.

Insight: Manufacturing employers who have contributed to the EPFO for at least three years will be qualified. Nonetheless, if the number of EPFO employees from the prior year is less than 50, the company must hire at least 25% of the baseline.

Employees having a monthly salary of up to Rs. 1 lakh who are EPFO-registered direct payroll (in-sourced) would be eligible.

The four-year subsidy will be split evenly between the company and the employee. It will be computed as follows: 24% of the wage or salary for the first and second years, 16% for the third, and 4% for the Fourth.

In addition to the subsidy specified under Scheme A, the employer will receive this one as well. However, should the employee’s employment end within a year, the company will be required to reimburse the subsidy amount.

Breakthrough: Scheme B is a focused strategy to support the manufacturing industry by providing incentives for large-scale labor growth.

Scheme C: Assistance to Employers in Boosting Employment

This program is applicable to employers who sustain the higher level of employment and add at least two employees (for companies with fewer than fifty employees) or five employees (for companies with fifty or more employees) above the baseline (the number of EPFO employees from the prior year). It also applies to employees whose monthly salary does not exceed ₹1,00,000.

New hires under this section do not necessarily have to be members of EPFO. Under this, the government would pay the company back for the additional employees hired the year before, up to ₹3,000 per month, for the EPFO employer contribution. This will last for two years. It does not apply to employees who are covered by Scheme B.

Baseline Increase: Encourages employers to hire more people than the baseline from the prior year.

Financial Compensation: The government would pay back the EPFO employer contribution for a maximum of ₹3,000 per month for two years for each new employee hired.

Wide Applicability: This program is available to a greater variety of workers because it does not require new employees to be EPFO members.

Suitable for Varying Business Sizes: Customized cutoff points for both big and small employers guarantee that companies of all sizes can profit.

Emphasis on High-Salary Jobs: Applied to workers earning up to ₹1 lakh per month, this initiative aims to improve workforce quality by focusing on higher-paying positions.

Insight:

Scheme C- will be eligible if they add at least two employees (for those with less than fifty employees) or five employees (for those with fifty or more employees) above the baseline.

The government will repay employer contributions to EPFO up to Rs. 3,000 per month for a period of two years. On the other hand, payment for the prior quarter will be made on a quarterly basis if a company creates more than 1000 jobs.

Employees who make less than Rs. 1 lakh per month, regardless of whether they are new to EPFO, will be eligible under this scheme.

Enhancement: The goal of Scheme C is to promote long-term job growth by giving financial assistance to companies that hire more people.

Conclusion:

Union Budget 2024 is known to be brimming with Employment-Linked Incentive Schemes altogether. If you are in need of any clarification in this regard, GetifyHR, the paramount Compliance and Payroll Service Provider will lend the needed assistance. Our services preserve compliance, improve employee happiness, and guarantee flawless payroll management.

The Role of Human Resources in Corporate Structure in India

The process of improving the effectiveness and efficiency of an organization by synchronizing the people, processes, and culture with the goals and strategies is known as Organizational Development. The role of Human Resources in Organizational Development is focused on the people in the organization. This would include chalking out the policies and procedures for selecting, supporting, and developing manpower within the organization.

The key elements to achieve this task include needs assessment, recruitment and retaining talent, training and development, employee engagement, compensation and benefits, performance management, risk management, and compliance. The points shared in this article are HR policies in India that every organization has to follow.

1. Needs assessment

Assessing the manpower needs of the organization is a vital task entrusted to the Human Resources team. This involves identifying the skills, knowledge, and capabilities required by employees to meet the activities of the organization. The HR is entrusted with the job of identifying gaps in the performance of the employees based on the analysis of the current state of the organization.

2. Talent Acquisition

Talent acquisition is the prime function of any HR department. Identifying the workforce capabilities and analyzing whether the performance matches the goals of the organization is vital for the growth of the company. HR managers have to ensure that the employee levels match the demand and create strategies for employee retention.

The HR department has to perform the entire task of recruiting the right candidate for the job needs. Right from screening the applications and resumes to interviewing, and shortlisting the candidates, the HR team has to be on its toes to acquire the right talent. Performing background checks, onboarding the new employees, and explaining the compensation, and company policy is an important aspect of this task.

Importantly, HR is responsible for retaining talent which can happen only when there is mutual trust, respectful treatment, satisfactory compensation, job security and opportunities for growth. The HR is responsible for giving this assurance.

3. Employee Engagement

In their eagerness to achieve growth, the management may fail to engage properly with the employees. The onus is on the HR team to set up two-way communication and engagement between employees and senior management. This is the only way to build trust and maintain a vibrant company culture that unites everyone around shared goals and values. The HR has to create a positive work environment, and for this, they have to encourage open communication, listen to employee concerns, and foster harmonious relationships between employees and the management.

The HR can build better rapport with the employees and create trust between the top management and the employees by engaging in the following activities:

Getting regular feedback and listening to the concerns of employees.
Recognizing individual or group achievements.
Sharing successes and failures.
Communicating new company policies, decisions, and strategic goals.
Mediating conflict and reducing tensions between employees.
Organizing company-wide get-togethers.

4. Training and Development

Training and Development is a vital aspect to maintain healthy relationships between the management and employees. It is the process that helps in enhancing and enabling the capabilities of employees to build on their strengths and confidence for them to deliver more effectively. Training and Development offer ample opportunities for employees to learn new skills and further improve existing relent. This can have a positive effect on employee morale and enhance productivity, increase growth opportunities, and reduce turnover rates. When the employees feel that their organization is investing in their growth they are more likely to enhance their performance and adhere closely to the company culture.

5. Compensation and Benefits

Designing, implementing and administering the organization’s Compensation and Benefits to the employees based on the nature of work is an important aspect that is handled by HR. The process includes determining the appropriate salary levels, calculating bonuses, designing incentive plans, and selecting and managing health insurance plans and other benefits for employees.

6. Compliance Issues

Statutory Compliance is a vital aspect of any business, and being compliant with all these rules and regulations is a must if the organization has to grow. It is, therefore, important that these rules and regulations formulated by the government are strictly complied with by the company. The development and implementation of policies and procedures will depend on these rules and regulations, especially those related to labour and employment.

7. Performance Management

Performance Management is a process undertaken by the HR to help employees grow and advance within the organization. They achieve this task through the use of assessment tools, coaching, and counseling, and by providing regular feedback on performance. The employees are set performance goals and their progress is tracked and evaluated. Performance management programs help to ensure that the employees are meeting the performance standards expected of them.

8. Policy Development

Every organization should have a set of policies and procedures that govern employee behaviour and align it with the company culture. Policy development is the process through which such policies and procedures are planned and implemented. These could include policies related to areas such as human resources, workplace safety, data security, ethics, and compliance with applicable rules and regulations.

9. Creating a Safe and Inclusive Work Environment.

Providing a safe and inclusive work environment to the employees is the responsibility of the HR. They have to plan and implement policies that promote diversity and inclusion and ensure that there is no discrimination on any grounds in the organization. They should also ensure full compliance with the health and safety regulations. The main purpose here is to foster a culture of respect and equality, where every employee feels valued and included. The onus is on the HR to improve workplace ethics.

10. Succession Planning

As the name implies, this process involves identifying and developing the leaders of the future within the organization. Succession Planning involves implementing programs to groom employees with high potential for leadership roles to ensure that capable and qualified persons are posted to key positions. This process involves analyzing the current and future requirements of the organization and developing strategies to attract fresh talent and retain & develop existing talent.

11. Strategic Planning

Achieving the goals and objectives of an organization depends on the strategic planning undertaken by the management. Strategic planning involves creating and implementing HR strategies that are in tune with the organization’s broader objectives. In the context of HR, activities such as recruitment, compensation and benefits, employee engagement and development, etc., are some of the areas included in the process.

12. Risk Management

HR’s role in Risk Management is limited to identifying and mitigating potential risks arising through a wide range of issues related to the workforce, namely employee turnover, performance, and compliance. The HR department has to be on its toes to identify higher employee turnover, slack in performance, and legal issues arising out of non-compliance. These potential risks could negatively impact the growth of the organization and, therefore, the role of the HR in identifying and taking corrective measures is high.

Conclusion

The Corporate structure in India provides opportunities for people to make their choice by the number of people involved in the business, the funds to be infused, the size of the business, plans for expansion, and whether they are looking for borrowings from financial institutions and the general public. Individuals or groups of people can opt for any of the structures to start their business. However, due to the complexity involved in starting and administering a business, it is advisable to consult a lawyer, an auditor, or a professional before making the choice. GetifyHR, one of the premier Payroll and HR Management Outsourcing companies in India is well qualified to assist people in making the right choice.

The Human Resources department has a huge role to play in the growth of an organization that has a large workforce. Companies with a very small number of employees normally make use of their managers to handle the employees as there is no need for a separate HR department. In companies that have a large workforce, HR’s role and importance cannot be gauged by just the points that we have raised in the earlier paragraphs. The HR’s role is invaluable and any attempt to downplay this importance may have a negative impact.

GetifyHR, an expert in the field of HR Management issues especially in handling Statutory Compliance requirements has been at the forefront in guiding clients to be fully compliant with all rules and regulations. Our expertise has been widely appreciated by our clients across India. We are fully equipped with a professional team of experts to guide prospective clients to make the right choice of corporate structure and to support their HR teams in handling the employees.

Corporate Structure in India

India today is the fifth largest economy and is poised to be the third largest economy in the next few years. This economic growth provides huge opportunities for entrepreneurs and businesses. This is a land that has a large number of highly skilled workforce with abundant resources and boasts of having the largest youth workforce in the world.

This is the best impetus to start a business, however, starting a business in India is a daunting ask, especially if you are unfamiliar with the various corporate structures available. Whatever the Corporate Structure one chooses, a well-defined code of conduct has to be chalked out if one desires to achieve success in this competitive business world. In this article, we will discuss the various corporate structures available in India and delve into the role of HR in this fast-paced growth phase where proper planning and execution is the key to success.

Corporate Structure in India

1. Sole Proprietorship

The Sole Proprietorship is the simplest and most common business structure in India. This is a corporate structure where one single individual owns, manages and controls the organization.
In a Sole Proprietorship firm the single owner enjoys the entire profit and on the other hand, has to bear the risks or losses of the firm.
The sole proprietor invests the entire capital of the business and may raise additional funds through borrowings.
From the legal angle, the sole proprietor and the business are the same.
Sole proprietorship firms have fewer legal formalities.
This business structure is suitable for businesses that are involved in the manufacturing of goods that require manual skills like tailoring, jewellery making, etc.

This business structure is suitable for small businesses and localized in markets that are limited and where the customer gives importance to personal attention. The liability of the firm is borne entirely by the sole proprietor.

2. Partnership Firm

A Partnership Firm is a business entered into by two or more individuals who are governed by a ‘Partnership Deed’ that outlines the rights and obligations of each partner. The Partnership is registered under the Partnership Act, of 1932.

To start a Partnership Firm, a minimum of 2 individuals are required.
The Partners share the profits in the ratio as agreed to in the Partnership Deed.
The Partners have unlimited liability.
The law considers the partners and the Firm as a single entity.
Raising funds for the firm is easier wxhen compared with sole proprietorship.

This type of corporate structure is suitable for businesses like retail and wholesale trade, manufacturing units, professional services, etc.

3. Limited Liability Partnership (LLP)

Limited Liability Partnership (LLP) is a firm incorporated under the Limited Liability Partnership Act, of 2008. Unlike as in a Partnership firm, partners in a LLP are not subject to unlimited liabilities caused by the business. The responsibility of Partners towards losses or debts is limited to the investment made by each partner, and the partners are considered as separate legal entities. The individual partners are protected from the liabilities created by the misconduct of one of the partners.

There is no condition on the minimum amount of Capital Investment to start a LLP.
There is no limitation on the number of partners in a LLP. Normally there have to be 2 or more partners to start an LLP.
Starting an LLP is easier when compared to a private company as there are fewer legal requirements.
The cost of registering an LLP is very low when compared to that of a private company.
The compliance requirements of a LLP are much less. LLPs are required to submit any two statements, i.e., the Annual Return and Statement of Accounts.

The number of LLPs in India is on the rise and in the FY 2023-24 58,990 companies were incorporated compared to 36,249 incorporated in FY 2022-23.

4. Private Limited Company

A Private Limited Company is a privately owned firm that may issue shares and have shareholders. The company is registered under the Companies Act, of 2013 and is not permitted to trade shares in public exchanges. The liability of the shareholder is limited to the number of shares held by each shareholder. A minimum of 2 shareholders are required to start a Private Limited company and there is a cap of 200 shareholders. 2 directors are required to administer such a company.

The Private Limited Company is a separate legal entity and has the right to sue and be sued under its name.
Private Limited Companies enjoy greater borrowing capacity than LLP firms as it has more options in taking on debts. Banks and other Financial Institutions prefer to lend to Private Limited companies rather than to LLP’s or Partnership concerns.
A Private Limited Company remains unaffected by the death or resignation of any member.
The Company has complete ownership of its properties and the shareholders cannot lay claim to ownership.
Any person can be associated with the Private Limited Company as a Director, Shareholder, or Employee at the same time.

The Private Limited Company is required to have and maintain paid-up capital of ₹ 1 lakh as prescribed by the Ministry of Company Affairs (MCA). This amount may vary as per the guidelines of the MCA.

5. Public Limited Company

A Public Limited Company is a business entity registered under the provisions of the Companies Act, 2013, that can issue shares to the public and have unlimited shareholders. This type of corporate structure is best suited for entrepreneurs who are planning large-scale business operations.

A Public Limited Company enjoys all the privileges of a corporate entity with limited liability. It is mandatory for a Public Limited Company to get listed with the stock exchange to raise capital from the general public. This type of corporate structure has to comply with stricter legal restrictions than a Private Limited Company.

The liability of the shareholder is limited to the shares they own. As a separate legal entity, the Public Limited Company has the right to sue and be sued without involving any shareholder.
The stocks of the Company can be acquired by anyone either privately through an Initial Public Offering (IPO) or trading on the stock market.
The minimum Authorised Share Capital of a Public Limited Company is ₹5 Lakhs.
A minimum of 7 shareholders are required to incorporate a Public Limited Company.
A minimum of 3 Directors are required to start a Public Limited Company.
Proper Memorandum of Association (MOA) and Articles of Association (AOA) have to be submitted along with Form DIR-12.
The death of any member or shareholder does not affect the life span of the Public Limited Company.
A Public Limited Company can raise the required Capital through the stock market by using debentures and bonds.

Public Limited companies are subject to strict regulations and have to comply with various rules and regulations. They are required to publish their complete financial statement annually.

6. One-Person Company

A One-Person Company is a corporate entity that has only one person as a member. This is a recent addition to the corporate structure with the view to facilitate individuals to own and manage companies alone. In this corporate structure, the shares of the company are owned by one person and it is mandatory to have a nominee for the sole person for registering this type of business.

Only the owner is responsible to make business decisions and administer the company. This is in variance to the long processes and measures that a few other companies adopt.
One-person company is eligible to receive all benefits under the Micro, Small, and Medium Enterprises Development Act, 2006.
One-person company is a small or medium business entity and any delay in payment; they are entitled to receive interest @ thrice the bank rate.
The corporate structure allows the owner to take higher business risks without any depletion n personal assets.

One-Person Company has to be registered under the Companies Act, 2013.

7. Section 8 Company

Also called as a Non-profit Company, a Section 8 Company can be incorporated under the provision of the Companies Act, 2013 with the status of a Limited Company. The company cannot use the word Limited or Private Limited in its name.

The objective of the Section 8 Company is to promote commerce, arts and science, education, sports, religion, social welfare, research, charity, environment protection, or any other such objectives. The company shall utilize its profits or other income to promote the above objectives and is prohibited from paying any dividends to its members.

A Section 8 Company can be registered by an individual or by an association of individuals.
The objectives of the company should be to promote commerce, arts and science, education, sports, religion, social welfare, research, charity, environment protection, or any other such activities.
The company has to invest all the profits or any other income only in the objectives mentioned above.
The company is not allowed to pay dividends to its members.
Being considered a charitable institution, section 8 companies enjoy the benefits of 80G of the IT Act.
They are exempted from paying stamp Duty on the Memorandum of Articles and Articles of Association.
A Section 8 Company can be set up without the requirement of having minimum paid-up share capital as in other corporate structures incorporated under the Companies Act, 2013.
This type of company is registered with limited liability.
They possess a disinct legal status, therefore, its existence is independent of its members.
The continuity of a Section 8 Company is not affected by any change in its membership.
The Section 8 Company has better credibility than other types of corporate structures as they function under a flexible and transparent constitutional framework.

A Section 8 Company has to strictly follow the norms formulated by the Central Government and failure to do so may lead to closure of the company.

8. Joint Venture Company

A Joint Venture is an agreement between two or more parties or companies to cooperate and administer business or achieve a commercial objective. Both parties contribute towards capital mutually and share the profits/losses based on the agreed ratio.

There are two types of Joint Venture companies in India.

1. Equity-based Joint Venture

In this type, the parties agree to establish a new legal entity through a mutual consent agreement. Both parties share the profit/loss and take part in the management of the Venture.

2. Contractual Joint Venture

In this type of Joint Venture, the parties agree to work jointly without creating a separate legal entity. Both parties work together to achieve common goals without creating a new entity. In this type of Joint Venture, neither of the parties will share ownership of the business at the same time may leverage some level of operational control. Both parties are bound by the governing agreement to share the profit/loss. In most cases, it is a foreign company that would get into such an agreement with an Indian Company.

A Joint Venture is formed by the contribution of 2 or more parties or companies to achieve an objective.
The parties sign an agreement to contribute mutually to accomplish a particular objective.
The Joint Venture does not require a particular name as they are shared by two or more parties or companies.
The Joint Venture agreement is temporary and ends when the project is completed and the desired goal is achieved.
The Profit or loss is shared in the ratio as agreed to and where no such ratio has been agreed they are shared equally.
The Co-venturers are free to continue their own business unless agreed otherwise during the life of the Joint venture.

A joint venture is a symbiotic business contract between two or more companies for enhancing marketing, positioning, and client acquisition. Joint Ventures have stood the test of time and have been used across sectors, particularly in high-technology, high capital or high-skill sectors. They are prevalent in sectors like oil and gas, insurance, banking, asset management, infrastructure, and more recently in the defense sector.

Joint Venture Companies are incorporated under the Companies Act, of 2013 and are also regulated by the Competition Act, of 2002, the Foreign Trade Act, of 1992, the Foreign Exchange Management Act, and also come under the purview of SEBI and RBI regulations.

9. Non-Governmental Organizations (NGOs)

Non-Governmental Organizations (NGOs) are entities that are formed to pursue goals and aspirations that relate to the public, social, or political good of the nation or world. They are a not-for-profit organization that focuses on activities to relieve suffering, promote the interests of the poor, environmental protection, provide basic social resources, and undertake community development.

NGOs are registered under the Societies Registration Act of 1860 and have a legal status. They do not form part of the government.

NGOs have a specific purpose or cause that they support.
They are voluntary groups created by like-minded people who wish to serve society.
NGOs are autonomous bodies and enjoy little or no governmental interference.
Private donations and
NGOs have a huge role in nation-building, providing aid, and philanthropy.

Funding for the NGOs is from contributions received from various sources and also includes membership dues to government grants. The organization works to influence public policy and advocacy.

The following Associations can sign up as a NGO in India.

A Trust can register as an NGO as per the Indian Trusts Act, of 1982 if it has one or more trustees.
A society of people can sign up as an NGO under the Societies Registration Act, of 1860, if its objective is to serve society.
Any company, club, or association run by professionals can sign up as an NGO by registering under the Companies Act, 2013.
Any Charitable Trust can sign up as an NGO under the Charitable Endowment Act, of 1920.
Any statutory body that gives membership to persons on their stature and standing in society.
Any group, association, or society that works for the upliftment of society.

We have given(GetifyHR) a brief overview of the different corporate structures available in India. Choosing the structure that is suitable for one’s line of business and expertise requires the advice of a qualified lawyer, auditor, or a professional.

Five Powerful Ways to Honor and Commend Employee Achievements

Recognizing employees goes beyond just a kind gesture; it is a calculated tactic to improve productivity, retention, and employee engagement. Employees who participate in effective recognition programs will feel valued and appreciated, which will change the workplace.

This blog post will discuss five efficient ways to acknowledge and recognize staff accomplishments, offer a check list focused by GetifyHR for its valuable clients and putting these strategies into practice for employee retention and the like. It also highlights an interesting Q&A section which predominantly throws light on various Employee Engagement Programs in the current scenario.

1. An explanation of Personalized Recognition

Recognizing each employee in a way that speaks to them directly is known as personalized recognition. This strategy can take several forms, such as a public acknowledgement catered to their preferences or a personalized gift or handwritten message. GetifyHR, ensures that their clients proffers each employee a personalized award shows and make them realize that they are valued by the company for more than simply their job.

What is the significance of ‘personalized recognition?’

Individualized acknowledgment demonstrates to staff members how much you respect them. Employee satisfaction and loyalty increase as a result of the employer and employee’s personal bond being strengthened.

How can we comprehend the choices of workers for acknowledgment?

In the current situation, ‘Employee Engagement’ turns out to be very vital. Hence, GetifyHR aid its clients to conduct surveys, one-on-one meetings, or informal conversations as a part of Employee Engagement. This will pave way to learn their preferred methods of recognition.

What kinds of gifts can be personalized?

Examples include custom stationery, a favorite book, tickets to a concert, or a gift card to a preferred restaurant.

2. Let’s examine the main benefits of individualized appreciation in the workplace here.

Employees who receive personalized acknowledgment feel appreciated for the special contributions they have made, which strengthens their emotional bond with the company and their job. Employees are more likely to remain motivated and engaged when they see that their unique efforts are acknowledged and valued.

GetifyHR believes that ‘Personalized Appreciations’ are more motivating and meaningful since it takes into account an employee’s unique actions and contributions. Employees are more inclined to keep pushing for greatness when they know that their efforts—both distinctive and hard—are given due importance by their employers.

Personalized acknowledgment has the potential to boost output. Employees are more likely to continue delivering excellent work when they feel valued for each unique effort. High productivity, proper leave management and a culture of constant improvement are fostered by this positive reinforcement. GetifyHR always ensure that their clients lay hands on ‘Personalized Acknowledgement’ and also supports them duly for its assurance..

Employees and the company have a stronger emotional bond when they receive personalized acknowledgment. Employee retention rates and the related expenses of recruiting and on boarding new hires are lower when compared to offering the needed appreciation and acknowledgement for their distinctive contributions.

Overall job happiness is greatly enhanced by personalized recognition. Recognition that highlights an employee’s individual accomplishments and contributions makes them feel better about their jobs and the company, which buoys up retention rates.

‘Incentives are very vital’, as per GetifyHR. Organizations can incentivize and reward individuals who make significant contributions to important projects..

Employers can honor innovative contributions by giving staff members the chance to pitch in their ideas to leadership teams, showcasing original solutions in business communications, or granting innovation awards. GetifyHR always stresses its clients on providing ample opportunities to employees to voice out their thoughts/ideas.

Individualized acknowledgment promotes a respectful, appreciative, and upbeat atmosphere. Personalized acknowledgment on a regular basis fosters a welcoming and inclusive work environment where everyone feels appreciated.

3. Incentives Based on Performance

Justification

Employees are rewarded with performance-based incentives according to their accomplishments and contributions. These incentives might take the form of cash rewards like bonuses or non-cash benefits like additional vacation time or chances for career advancement. Employees can be inspired to pursue greatness by organizations when benefits are linked to performance.

How can we make sure that incentives based on success are equitable?

Clearly convey the transparent criteria to all staff in order to achieve fairness. Review and modify the criteria on a regular basis to take into account evolving personnel roles and business environments.

What kind of non-monetary performance-based rewards are there?

Some examples include opportunities to attend industry conferences or seminars, additional vacation days, flexible work schedules, and professional development courses.

What is the effect on employee motivation of performance-based incentives?

Employees are encouraged to work hard and achieve excellence by offering concrete benefits through performance-based incentives, which incentivize them to do their best work.

Performance-Based Incentives’ Impact

Employees receive prizes based on their productivity, excellent leave management, performance, or accomplishment of predetermined goals when they receive performance-based incentives. These incentives can come in many different ways, including non-monetary benefits like additional vacation time or public recognition, as well as monetary rewards like commissions, bonuses, or other awards.

Putting performance-based incentives into place can have a number of important outcomes.

Programs for Employee of the Month:

‘Employee of the Month’ programs are designed to recognize and honor exceptional staff members on a monthly basis. Employees who receive this kind of acknowledgment are inspired to pursue greatness and are encouraged to have a healthy competitive spirit. Recognizing top performers on a regular basis can help the organization establish a standard of excellence.

What needs to be a part of an Employee of the Month initiative?

To inspire others, an Employee of the Month program ought to have transparent selection standards, an equitable nomination procedure, significant awards, and public recognition of the recipient’s accomplishments. GetifyHR strictly stresses its clients to abide by these parameters for their business’ growth.

What are some ways to guarantee a fair selection process?

To lessen prejudice, make sure the selection process involves several reviewers and that the criteria are transparent.
For programs that honor ‘employees of the month’, what are some noteworthy awards?
Gift cards, additional time off, public acknowledgment, or a designated parking space, which has become the need of the hour are examples of meaningful benefits..

4. An explanation of ‘Peer Recognition’ programs

Through peer recognition programs, staff members can honor and recognize one another. This strengthens team dynamics and creates a supportive work atmosphere. Workers can highlight the collaborative work within the team by nominating peers for recognition.

What are the benefits of peer recognition programs for the workplace?

Peer recognition initiatives promote an atmosphere of appreciation and respect for one another. Employee engagement can grow in leaps and bounds. They foster a culture of mutual recognition and support among staff members, thereby enhancing team dynamics and morale.

How can we put in place a peer recognition system that works well?

Provide an easily navigable site so that staff members can suggest colleagues and provide input. Highlight and honor these accomplishments on a regular basis.

How can we effectively promote peer recognition?

Promote the program through internal communications, provide training on giving constructive feedback, and create a culture that values mutual respect.

5. Description of Career Development Opportunities

Recognizing someone with chances for career advancement can be a very motivational gesture. This entails offering instruction, mentoring schemes, and career-growth prospects. Workers may become more engaged and devoted if they perceive these possibilities as investments in their future.

What role do opportunities for career growth play as a vehicle for recognition?

Opportunities for career development acknowledge employees’ potential and make investments in their advancement. This improves workers’ abilities and contributions to the company in addition to motivating them.

What kind of possibilities for career advancement can we provide?

Provide mentorship programs, employee self on boarding techniques, boarding leadership development courses, training courses, and chances for career progression or rotation.

How can we determine the need for development among employees?

To understand employees’ goals and opportunities for development, GetifyHR supports its clients to conduct regular performance reviews and career conversations. The acquired data can be utilized to customize development initiatives.

Conclusion

It is crucial to acknowledge and reward employee accomplishments in order to promote a happy and effective work environment. Employees might feel appreciated and inspired to give their best work when they work in an atmosphere that offers career development possibilities, individualized recognition, performance-based incentives, Employee of the Month programs, and peer recognition programs. Individual contributions are acknowledged through personalized acknowledgment, which raises employee engagement and morale. High performers are rewarded with performance-based incentives, which increase productivity.

Programs for Employee of the Month offer recognition to the public, but peer appreciation creates a positive work environment. Giving employees the chance to advance professionally demonstrates a commitment to their development. To successfully apply these techniques, make use of the checklists that are supplied, and consult the Q&A sections for answers to frequently asked problems and concerns. One of the main factors influencing employee engagement and organizational performance is a well-designed recognition program.

Comprehending the POSH Act 2013: An All-Inclusive Manual for Occupational Safety

Maintaining workplace safety is essential to creating a respectful, upbeat, and productive atmosphere. The Prevention of Sexual Harassment (POSH) Act is a crucial piece of legislation in India that aims to protect workers’ safety and dignity—especially that of women—in the workplace. This in-depth manual seeks to clarify the main points of the POSH Act and its role in improving workplace safety.

Overview of the POSH Act

2013 saw the enactment of the POSH Act, also known as the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act. It aims to shield female employees from sexual harassment at work and to offer a complaint resolution process. The Supreme Court of India’s 1997 Vishaka Guidelines, which emphasized the necessity of law to stop sexual harassment in the workplace, served as the foundation for the Act.

Important Clauses of the POSH Act

1. Sexual Harassment Definition

Sexual harassment is defined by the POSH Act as a broad range of unwanted acts or behavior (directly or indirectly), including advances and physical contact, requests or demands for sexual favors, sexually suggestive comments, the display of pornography, and any other unwanted physical, verbal, or nonverbal behavior of a sexual nature.

2. The Act’s Scope

The POSH Act applies to both the organized and unorganized sectors and protects all women, regardless of age or job position, whether they work directly or indirectly. It comprises regular workers, contract workers, ad hoc workers, trainees, interns, and even those who drop by the office.

3. Committee for Internal Complaints (ICC)

It is required for each organization with more than ten employees to set up an Internal Complaints Committee (ICC) in each branch or office. This provision guarantees a formal, structured procedure for handling complaints about harassment and discrimination in the workplace. The ICC is in charge of receiving employee complaints, looking into them thoroughly, and suggesting suitable measures to be taken against violators. This committee is essential to preserving organizational integrity, guaranteeing adherence to legal and ethical requirements, and preserving a respectful and safe work environment..

4. The LCC or Local Complaints Committee

The Act requires the District Officer to form a Local Complaints Committee (LCC) for workplaces with less than 10 employees or when the complaint is directed towards the employer. This guarantees that the POSH Act applies to every workplace.

5. Know the Difference

It’s critical to understand the differences between the International Criminal Court (ICC) and the Internal Complaints Committee (ICC). The latter is an international court that hears cases against defendants for crimes like crimes against humanity, war crimes, and genocide. It is situated in The Hague, Netherlands. The International Criminal Court has worldwide jurisdiction and resolves serious international crimes, in contrast to the organizational ICC, which deals with internal workplace disputes. Despite the fact that they both use the abbreviation “ICC” and engage in investigative procedures, their responsibilities, purviews, and functions differ significantly.

6. The Process of Complaint and Redress

A detailed procedure for submitting complaints is outlined in the POSH Act and it must to be completed in writing within three months of the incident. The employer or District Officer must receive the report from the ICC within 90 days of the investigation’s conclusion, and they have 60 days to implement the recommendations.

7. Secrecy

The POSH Act places a strong emphasis on maintaining secrecy throughout the complaint process, from filing to inquiry to suggestion implementation, in order to safeguard the complainant’s privacy and dignity.

Interesting Insights into POSH:

The Act, which went into force on December 9, 2013, aims to shield women against sexual harassment at work and offers procedures for filing complaints and seeking remedies if such an instance occurs. Employers’ obligations in this regard are outlined in the POSH Act, which includes disclosing complaint data in yearly reports.

Furthermore, the Securities and Exchange Board of India required all listed businesses to provide information on sexual harassment allegations in their annual reports starting in 2018.

The requirement for data pertaining to the Act’s execution to be disclosed is a useful addition to the legislation. It can facilitate efficient monitoring of the effectiveness of the law and act as a significant accountability mechanism.

Nevertheless, almost ten years later, there is still no publicly accessible database that compiles information from various employers and businesses. Finding trends and patterns across the sector is tough since the data is still dispersed over different business reports and frequently presented in unintuitive ways.

Stunning Statistics:

Together, the focal companies reported 161 cases in FY 2013–14, the first year the POSH Act went into effect. In a year, this figure shot up to 465.

The figures increased in every year that followed until the first year of the COVID-19 epidemic, FY 2020–21. Across the 300 companies, 586 incidents were reported overall, down from 961 cases in the previous year.

In FY 2021–2022, this number gradually rose to 767; the next year, it surged by 51.2% to 1,160. About 109 accusations of sexual harassment were settled against these companies in FY 2013–14. In FY 2014–15, this increased to 406.

But the number of instances that have been settled has generally lagged behind the number of complaints over time. In FY 2016–17, 2.1% fewer complaints were addressed than the previous year, despite a 12.9% increase in the number of reported instances.

In a similar vein, after FY 2020–21, the first year of the pandemic, the number of complaints increased dramatically, but the number of instances that were successfully resolved fell short.

Advantages of the POSH Law

POSH Act’s implementation offers the following advantages:

Establishes a Safe Work Environment:

It promotes a courteous and safe work environment, which is critical for both the health of employees and the organization’s general output.

Promotes Reporting:

The Act promotes victims’ coming forward without fear of reprisal by offering a transparent process for remedy.

Increases Awareness:

Consistent training and sensitization initiatives required by the Act increase knowledge of what sexual harassment is and how to stop these kinds of situations.

Assures Accountability:

The Act makes businesses responsible for maintaining a secure workplace and handling grievances in a timely and efficient manner.

GetifyHR and Safety at Work

We at GetifyHR recognize the value of a polite and safe work environment. Being a top supplier of payroll outsourcing services, we guarantee quick and accurate payroll processing in addition to providing complete compliance management solutions, which include POSH Act compliance. Our knowledgeable staff helps businesses establish Internal Complaints Committees, provide training programs, and make sure the Act’s legal requirements are met.

Organizations that engage with GetifyHR may concentrate on their main business operations while we handle their payroll and compliance requirements, guaranteeing a secure and law-abiding environment.

In summary

One important piece of law that attempts to give women a safe and respectable place to work is the POSH Act. Comprehending and executing the POSH Act’s provisions is not only legally required but also an ethical duty for all establishments. Establishing a respectful and safe culture can help firms increase employee happiness, lower attrition, and boost overall productivity.

GetifyHR is dedicated to assisting businesses diligently in their efforts to establish a secure and legal workplace. With our proficiency in compliance and payroll outsourcing services, we assist companies in managing the intricacies of labor regulations and guarantee POSH Act compliance. By working together, we can create a workplace where everyone is valued, respected, and feels safe.