HR & Compliance
Organizations get so busy with their daily operations, trying to increase revenues and dealing with competition that they often don’t focus on other issues. Compliance is one critical area which also has legal and financial consequences.
Compliance refers to the actions required on the part of the organization within the framework of law and regulation in managing its human resource – right from recruiting its employees to the close of the employment relationship – it includes paying wages, managing performance, providing adequate working conditions or dealing with discrimination or sexual harassment. It means doing the specific actions required on the part of the organization, not doing prohibited actions, maintaining registers and records and filing required forms and returns. Employee legislation includes the Factories Act, Goa Shops & Establishments Act, Employees Provident Fund & Miscellaneous Provisions Act, Employees State Insurance Act, Payment of Bonus Act, Payment of Gratuity Act, Contract Labour (Regulation & Abolition Act), Industrial Employment (Standing Orders) Act, Industrial Disputes Act and the Workmen’s Compensation Act.
Compliance management requires an organization to adopt a specialist approach, review its actions for legal risk, meet the detailed requirements of compliance and manage its data effectively.
How can an HR executive effectively manage an organisation’s HR compliance? An effective way is to develop strong systems to manage employee data and use detailed compliance checklists to ensure that the compliance action is carried out within the specified time frames, as required by law. Larger organizations use information systems to manage compliance, while some small units choose to outsource the compliance function.
The changing laws in the present context require the HR executive to be updated on the changes in legislation. The HR executive needs to develop ways to keep himself abreast of the changes in the law for proper compliance. Reading the notified changes and participating in study circles, discussion groups, workshops and seminars helps the HR executive become aware of the changes in legal requirements and to update his processes and actions accordingly. Effective compliance with the laws fosters an atmosphere of trust and can help the organization develop effective employee policies.
An HR Audit helps an organization to take stock of the effectiveness of its human resource policies and compliance. An HR Audit is the review of the company’s HR policies, practices and compliance management. This review enables the organization to revise and work on those areas which are not adequate or effective.
The challenge for HR is to develop strong compliance systems and competencies within the organization so that the risks of non-compliance are reduced.
Sarita D’Souza
sdsouza@marianinstitute.in
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