HR Compliance Checklist 2024: Everything You Need to Know

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HR Compliance Checklist
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Every organization operates under a set of rules and regulations by various local, state and federal authorities. The following compliance is essential to ensure that the organisation don’t face any legal complication.


Being compliant with the laws also adds to the credibility and repetition of the company. In addition to that, it’s good for employee well-being and productivity. There are multiple compliance need to be followed and it is best to use the HR compliance checklist to ensure that.


Since an organization has to be compliant with multiple regulations you might unknowingly act against some regulations that the company is unaware of. That is where the HR compliance checklist comes to the rescue. It keeps your company as well as your employees safe and ensures that everyone gets fair treatment.


What is HR Compliance?

HR compliance is ensuring that the policies and procedures are aligned with the concerned laws and regulations. Under HR compliance you need to align your HR policies such as leaves, recruitment, wages and workplace safety with concerning laws by federal state and local governments. That helps in promoting employee well-being and providing a fair and healthy workplace.


In this blog, let’s discuss the HR compliance checklist in detail to mitigate the possible risks.


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Benefits of Following an HR Compliance Checklist

The basic idea of an HR compliance checklist is to ensure that your company won’t find itself in any legal trouble or face heavy fines. It ensures that the company can keep on operating seamlessly without worrying about statutory compliance. In addition to that a firm rips many benefits, some of these are listed below.


➔ Build Trust

Organizations that stay compliant with the laws and regulations build an image as responsible entities which is a great trust-building factor for everyone. An HR compliance checklist ensures that all your employees and vendors get fair treatment which builds employer loyalty.


When the compliance checklist is through with the labour laws and regulations regarding employment that works as another factor to be a trustworthy employer. The payroll compliance checklist is followed meticulously which takes away employees’ worries about various deductions made.


This also leads to transparency and open communication which is another factor for building trust.


➔ Employee Retention

Following the HR compliance checklist creates a safe and healthy work environment for everyone. That makes sure that your company experiences a higher retention rate as well as succeeds in attracting top talent from the industry.


Always keeping up with the compliance in the HR policies and procedures ensure that the workforce experiences fair treatment and is secure to communicate their ideas as well as issues.


➔ Avoid Penalties

Following an HR compliance checklist will help the companies to design all the policies and procedures according to compliance.


As compliance you need to follow the payroll process, employee handbook, sexual harassment or fair labour standards act will be already incorporated in the system. Hence there won’t be any violation that might lead to penalties or legal action.


➔ Business Growth

Following statutory compliance can be helpful to build employee trust and also helps to improve the image as a trusted brand in the market. That means more business from the customers and better negotiation power with the vendors.


In addition to that in the long run your company to improve its business operations significantly. Saving a lot of productive time that can be invested in strategic actions and achieving better efficiency.


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Components in the Compliance

Listed below are some essential compliance that every company need to follow. These are designed to ensure a healthy and productive work environment for everyone.


1. Occupational Safety and Health

The Occupational Safety and Health Code 2019 deals with the working conditions of the employees and is applicable to establishments with more than 10 employees. The concerned establishments are required to register with the appointed officer of the central government.


Under this code multiple guidelines to ensure employee safety working under potentially hazardous conditions such as chemical, physical or biological elements which can be harmful. Complying with these rules and regulations helps the company make sure that the employees are safe at the workplace and do not face any accidents.


You can also add all the safety policies and procedures in the employee handbook to keep all employees informed about the same. Develop policies that address workplace safety, accident prevention, emergency procedures, and the provision of personal protective equipment. In addition to that conduct regular safety inspections, risk assessments, and training programs to ensure employee well-being.


2. Recruitment

Hiring or recruitment compliance is about following fair recruitment in the company. It’s also about compliance with the governing laws to make sure everyone gets equal opportunities.


Under the Equal Employment Opportunity Act, the company need to be carrying their hiring and recruitment process according to the required qualification and suitability for the job. It is to make sure that no discrimination happens based on religion, age, gender, disability or other factors.


Job advertisements should be clear and free of discriminatory remarks. The same goes for the application and screening process, you should be following a fair process that focuses on the job requirements. Organizations also need to keep a record of the hiring process which can be also used for audits in future.


3. Compensation and Benefits Compliance

Companies operating in India need to be compliant with various compensation and deductions laws, governing different aspects of employee salary. HR compliance is necessary for your business so that employees can be assured that they are being fairly compensated for their time and effort.


Every employer needs to keep compliance with regulations such as minimum wage laws which are subject to change from state to state. These rates are often revised for different industries and you need to be aware of the latest update for HR compliance.


Here is an overview that can help your organization to make sure your payroll is always in compliance with the laws.


• Processing Records

Companies need to maintain documentation for the payroll process according to the concerned HR compliance. This includes details such as wages, overtime, bonuses, payslips and much more. Some of the payroll-related components that you need to make sure to be compliant with the regulations are listed below.


• Employee Provident Fund (EPF)

It’s an essential part of an HR compliance checklist. Organizations that have more than 20 employees are mandated to register under the Employees’ Provident Fund. HR compliance needs you to deduct and contribute a portion of the employee’s salary.


• Employee State Insurance (ESI)

Employers with 10 or more employees must register deduct and contribute a percentage of the employee’s salary under the Employees’ State Insurance Act.


• Bonus and Gratuity

Comply with the Payment of Bonus Act, which mandates the payment of an annual bonus to eligible employees. If you are a business you also need to comply with the Payment of Gratuity Act, which requires employers to provide gratuity payments to eligible employees upon termination, retirement, or death.


• Tax Deductions and Compliance

Deduct and deposit income tax from employee salaries as per the Income Tax Act and rules. Employers should also issue Form 16 and other required tax-related documents to employees. Comply with tax withholding and reporting requirements, including timely filing of tax returns.


• Benefits

Here employers need compliance with regulations related to employee benefits such as leave entitlements, medical allowances, and reimbursement policies. Also compliance with maternity benefits including paid leave and other maternity-related benefits.


It is crucial for organizations operating in India to understand and comply with the specific laws and regulations governing compensation and benefits. By doing so, organizations can ensure fair remuneration, fulfil their legal obligations, maintain employee satisfaction, and mitigate the risk of legal disputes and penalties.


4. Workplace Policies and Procedures

This compliance refers to the adherence to legal requirements and internal policies that govern the conduct, behaviour, and practices within an organization. It involves establishing and implementing policies that align with applicable laws, regulations, and industry standards to promote a safe, inclusive, and productive work environment. Here’s an overview of workplace policies and procedures compliance:

  • Identify and develop policies that address key areas, such as anti-discrimination, anti-harassment, code of conduct, data protection, health and safety, and ethical practices.
  • Policies should be tailored to the organization’s industry, size, and specific needs.
  • Communicate policies clearly to all employees, ensuring they understand the expectations and consequences of non-compliance.
  • Ensure anti-discrimination and equal employment opportunities in recruitment, promotion, training, and other employment practices.
  • There should be anti-harassment policies that define and prohibit harassment, including sexual harassment, bullying, and any form of unwelcome behaviour.
  • Establish policies and procedures to protect sensitive employee and customer data in compliance with relevant data protection laws, such as the Personal Data Protection Bill in India. Implement measures to secure data, including proper access controls, data storage, and confidentiality agreements.
  • Define a code of conduct that outlines expected behaviour, ethical standards, and business practices for employees. Address conflicts of interest, bribery, corruption, confidentiality, and other ethical considerations specific to the organization’s industry and operations.
  • Develop policies regarding the appropriate use of technology, the internet, and social media platforms by employees. Clarify guidelines on confidentiality, intellectual property, online behaviour, and the protection of the organization’s reputation.


By ensuring compliance with workplace policies and procedures, organizations can promote a positive work environment, mitigate legal risks, protect employee rights, and maintain a strong employer brand. It is essential to regularly review and update policies, communicate them effectively, and provide ongoing training to employees to ensure awareness.


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HR Compliance Checklist for Important Acts in India

If you are running a business in India you must comply with the following Acts to be safe from any legal action as well as ensure employee welfare.


1. The Minimum Wages Act, 1948

You have to pay your employees according to the minimum wage fixed by the government to ensure that it covers their basic needs.


2. The Equal Remuneration Act, 1976

To be in compliance with equal remuneration, make sure that men and women get equal remuneration who are providing work of equal value. You can’t discriminate on the basis of gender and ensure fair wages.


3. The Maternity Benefit Act, 1961

You must be conscious of women employees by providing maternity benefits, including paid leave, medical allowances, and job protection during pregnancy and childbirth. Companies can provide maternity leave of up to 26 weeks for eligible employees.


4. The Employees’ Provident Funds Act, 1952

It requires employers and employees to contribute a portion of wages to the provident fund, which accumulates over time and provides retirement benefits.


5. The Employees’ State Insurance Act, 1948

Provides social security coverage for employees in factories and establishments with a specified number of workers. The act mandates contributions from employers and employees towards a fund that provides medical, disability, maternity, and other benefits.


6. The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013

The act addresses the issue of sexual harassment in the workplace and establishes guidelines for the prevention, prohibition, and redressal of such incidents. Requires employers to implement a policy against sexual harassment, set up internal complaint committees, and conduct awareness programs.


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Wrapping Up

It’s important for employers to understand and comply with these employment laws to ensure legal compliance, protect employee rights, and maintain a harmonious work environment.


Note that this is not an exhaustive list, and there are other employment laws and regulations that may apply depending on the industry and location of the business.

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