A Dissertation Report

On

UNDERSTANDING HUMAN RESOURCE COMPLIANCE IN AN

INDUSTRY

DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF

REQUIREMENT FOR THE DEGREE
OF
MASTER OF BUSINESS ADMINISTRATION

PREPARED BY:

SURESH PRASAD

Roll no.PG/VUOAP02/MBA-IVS/035
VU registration no:00875 of the year 2020-2022
Major specialization: Human Resource
Name of Institute: EIILM, Kolkata

UNDER THE GUIDANCE

OF
Dr Anupriyo Mallick
(FACULTY of HR, EIILM)

Submitted to

EIILM, Kolkata (VIDYASAGAR UNIVERSITY)

May, 2022
 DECLARATION

I do hereby declare that this dissertation entitled “Understanding Human Resource

Compliance In an Industry” has been done by me and all the information provided is correct
and true to my knowledge.

This dissertation is submitted by me for the partial fulfillment of the award of degree in “Master
of Business Administration”.

The dissertation is exclusively prepared by me and has not been submitted to any other
institutions or published anywhere before.

DATE: 05.05.2022 SURESH PRASAD

PLACE: KOLKATA MBA, 4th SEMESTER

EIILM, KOLKATA
 ACKNOWLEDGEMENT

I express my sincere gratitude to Dr., Faculty, and EIILM who has sincerely provided me with
critical suggestions and valuable insights which enabled me to complete this project and bring
out this report in the best way possible.

I would take this opportunity to thank Dr. R. P. Banerjee (Director, EIILM), my supervisor
Prof. Anupriyo Mallick and other faculty members for their cooperation and support.

I am also thankful to my colleagues for their motivation and to all those persons who directly or
indirectly helped me during developing this dissertation.

Signature: SURESH PRASAD

Name: SURESH PRASAD

Date:05.05.2022
 TABLE OF CONTENT
Particulars Page. no

 Chapter-1: Introduction 5-18

What is HR Compliance 5-6
Types of HR Compliance 7-9
Human Resource Compliance Check List 10-12
Statutory Compliance 13-15
Need for Statutory Compliance 16
Risk of Non-compliance 17-18

 Chapter-2: Objective of the study 19

 Chapter-3: Analysis 20-23

Analysis of Britannia Industries 20
Analysis of Nestle 21
Analysis of HUL 22-23

 Chapter-4: Methodology 24

 Chapter-5: Findings 25-26

 Chapter-6: Conclusion 27

 Chapter-7:Bibliography 28
Books & Journals 28
Websites 28
Chapter:1 Introduction

What is HR compliance ?

HR compliance is a process of defining policies and procedures to ensure your employment and work
practices demonstrate a thorough understanding of applicable laws and regulations while also being
aware of the company’s larger human capital resources objectives.

Companies of all sizes space increasing complexity as the number of employment laws and
regulations are on the rise and the risk of penalties for non-compliance has perhaps never been greater
when developing HR policies and procedures business owners should know for example that

 An employer must follow employment laws including applicable federal state and local
regulations
 a business may be subject in audit from and enforcing agencies that may levy fines and
penalties for non-compliance.

 Not knowing or understanding your compliance obligation is not an acceptable legal defence.
government pension

 A lawsuit settlement can bankrupt a company

“Regardless of a business size or scale timely and proactive compliance with federal state and local
employment collations is critical with the frequency and scope of audit by government agencies
increasing organization must compile with ever changing the regulatory mandates or deal with
adverse consequences that may result for from non-compliance”.

5
HR Compliance In An Industry

6
Types of compliance

1.Statutory Compliance

Saturday compliance entails compliance with legislations set up by a local state of federal government
all employers are legally mandated to follow statutory compliance without which they are liable to
face criminal charges

2. Regulatory Compliance

Regulatory compliance put sometimes overlap with a statutory compliance number the difference is
that a specific regulatory body sets it.

3. Contractual Compliance

Contractual compliance involves adherence to the contractual agreement form when you employer
worker from payroll employees to the hourly workforce from interns to a white-collar freelance
consultant every employment model is governed by a contract.
The agreement could include clauses for a notice. A severance package employee stock options are
tenure base bonus and lots more if if an employee doesn't abide by a contract, it could be opened to a
civil lawsuit.

4. Union Law Compliance

The national labour relations act mentions provision for employee’s union or group of workers
engaged in a similar industry often in a specific region working together to protect employees right.
by adding to union law companies can ensure that their employees are satisfied and there is no feeling
of discontentment among the workforces.

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5.HR Technology Compliance

The growing use of HR technology makes it critical to pay special attention to their checklist item
typical HR technology compliance is included in the service level agreement between a company and
its HR tech vendor.

6.Internal compliance
Internal compliance is the outlining and enforcement of internal policies which often reflect statutory
and regulatory laws .

7. Training compliance

Some industries or regions require employees to be mandatorily trained in specific areas. Companies
usually leverage employee training tracking software to ensure that they meet the required compliance
regulations.

8. International labour law

International labour law is a body of rules covering my rid of regulations among the rights and duties
of employees in government its head by it is headed by the international labour organization ILO
coordinating with other agencies standard said by international law often inspire regional regulations
specifically they are conventions fundamental conventions cover an individual’s right to work the
rights of child elimination of all forms of discrimination against women and the life important Li
these international laws apply if your country is a member state of the ILO.

8
9.Country Specific HR Compliance

A country for compliance regulation for instance retirement age in the minimum age to start work
also vary from country-to-country global companies must take this details into account when
formulating policy guidelines country specific guidelines will help you about non-compliance address
in substation penalties.

10.Workplace Compliance
Workplace compliance refers to an internal body of rules governing employee’s behaviour in the
workplace often this relates to statutory and regulatory norms making sure that they are proactively
followed mandatory workers the mandatory volume of cop mandatory breaks policies around working
from home the appropriate dress codes non-discriminatory behaviour and the like fall under
workforce workplace compliance.

9
Human Resource Compliance Checklist

To avoid noncompliance following checklist should be maintained in an industry.

Hiring Procedures
Hiring procedures, a should include a proper process that includes offer letters new hire paperwork
and contracts.

It should include all documents provided upon hiring with an emphasis on which deals with
discrimination against employees for race religion sex colour or national origin.

Recruiting and Interviewing

The checklist also includes details on recruiting and interviewing process of new employees along
with information on the current job application and the job description this is a requirement for both
large and small business.

Procedures and Policies

Employees engaged in an industry must obey all the rules and regulations of the factory. employees
need employee needs to obey the Standing Order as displaced in the entry and exit of the premises.

The primary concerns to be addressed should include the following:

 Performance appraisals and feedback

 Managing and handling difficult employees

 Counselling, dismissing and helping employees

 Training all employees in diversity and harassment

10
Compliance Check List

The purpose of management training isn’t to just help managers- the management is expected to
provide the training they received to employees under them.

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Safety and Health Policy
Industry aims to prevent occupational injuries and ill health through the following actions

 Integrate safety into all business processes proactively evaluate risk of occupational injury or
illness and implement actions to mitigate the risk.

 Design, adapt, operate and maintain technology plants and other facilities within the
designated safety criteria throughout their working life

 Develop introduce and maintain safety and health management system across the company to
meet concern standard as well as statutory requirement for safety and health verify compliance
with the standards for regular auditing.

Management at all levels jointly with employees is responsible and will be held accountable for
companies’ environment performance.

The aims are as follows:

 Ensure safety of its product and operation for the environment by using standard of
environment safety which are scientifically sustainable and commonly acceptable
 Develop introduce and maintain governmental management system across the company to
meet the company standard as well as statutory requirement for employment verify
compliance with this standard for regular auditing.

 Access environmental impact of solids activities and say continue improvement objectives and
targets and review this periodically to ensure that these are being met at the individual unit and
corporate level.

12
Statutory Compliance is in Indian Payroll Management System

What is Statutory Compliance ?

Statutory compliance in HR refers to the legal framework within which organization must operate
while dealing with their employees

even country has several hundreds of federal and state labour laws that companies need to align with
this list is for ever been added to.

What is the need for Statutory compliance ?

Adhering to surgery compliance is necessary for all big and small companies in the world to keep
their business say from the legal trouble a deep knowledge of strategy compliance requires to
minimise the risk associated with the compliance of study requirements.

In today's competitive and legal business world it is very challenging for employees to manage
statutory compliances without a good payroll management software each country has various kinds of
compliance requirements.

The Statutory Compliance is required for Indian payroll

The common site requirements that company have to follow for their payroll management in India
are:

Statutory Requirements for Minimum Wages

This act provides for fixing minimum rates of wages for skilled pain skill semiskilled and multi skill
labels it not only guarantees money for bare minimum survival requirements of workers but also takes
care of education medical requirements and some level of comfort of workers.

The minimum wage act being a state subject the statutory compliance of a centralised payroll
management is to cater for the payment of minimum wages to an organization workers spread out
across different states.

13
TDS Deduction

Each employer is responsible to deduct tax for employee income which is referred to as tax deducted
at sources. The salary components that impart TDs deduction rhrs special lines leave travel allowance
children education allowance medical allowance investments.

The new tax regime a reduces tax liability from an employee they need to declare investments is
eliminated employees need not to submit investment proofs.

Statutory Compliances for ESIC and PF deduction

ESI maintained by ESIC is applicable to employees earning Rs 21,000 or less per month to provide
the cash on medical benefits to them and their families

Provident Fund

It is a compulsory contributed fund for the future of employees after their retirement or for their
dependence in case of the early death

Professional Taxes

Professional tax for employment tax is a state-based apps it is one of the statutory deductions from the
gross income before computing the tax.

Gratuity
Gratuity is the amount given to the employee by an employer when they leave the job after
completing 5 years in the service gratuity is calculated as (Basic +DA)/ 26 *No of service *15.

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EDLI (Employees Deposit Linked Insurance Scheme)
The EDLI provides assure assurance benefit to employees along with PF benefit it is applicable to the
employees with the basic salary below 15,000 per month.

The employees do not contribute anything towards EDLI as per the latest rules and employer is
responsible to contribute 0.5% of the basic salary or a maximum of ₹75 per employee per month
rupees with the basic salary of an employees about 15,000 per month the maximum capping to avail
the benefit is ₹6,00,000

15

Advantages of Statutory Compliance

The advantage of statutory compliance for employees.

Ensures fair treatment of employees.

Ensures they are paid fairly for the work they've done, and their
company complies with a minimum wage rate.

Prevents employees from working for long hours are in human condition.

The advantage of statutory compliance to the organization:

 Avoid penalty or science because of their timely payments.

 Protects the organization from unreasonable wager benefit demands from trade unions.

 Prevents legal troubles as the company is fully compliant.

 Mitigates rests and increases awareness about compliance.

 With compliance in place there is a low risk of an adverse incident.

16

Risk of Non-compliance.
  If a company does not conform to rules and regulations it will risk:

 Panel options and financial losses to the organization. loss of reputation and business integrity.

 Customer loyalty will be impacted severely.

17

Payment of Wages Act 1936

The Payment of Wages are 1936 regulates the payment of wages to direct and indirect employees the
app warrants payments of wages on time and without any direction except those authorised under the
act according to this add payment should be made before 7th of every month where the number of
workers are less than 1000 and on the 10th day if greater than 1000.

Minimum Wages Act 1948

Minimum wages rates in India fixed under the minimum wages act 1948 and is determined both by
the central government and the provincial government minimum wages rates may be established for
any region occupation sector and declared at the national state sectoral and occupational levels the
minimum wages determined by considering cost of living.

The Payment of Bonus Act 1965

The payment of bonus act provides an annual bonus to the employees in the certain establishment
including factories and establishments employing 20 or more person under this app the bonus is
calculated by employee salary and profit of the establishing.

employees drawing 21,000 per month or less enough completed 30 day working days in that financial
year are eligible for the bonus payment.

Payment of Gratuity Act 1972

The payment of gratuity act applies to every shopper establishment in which 10 or more persons are
employed or were employed on any day of the preceding month.

Labour Welfare Fund act 1965

Labour welfare refers to all the facilities for labours to improve their working conditions provide
Social Security and raise their standard of living several state legislatures have enacted a nap
exclusively for seeking focusing on the welfare of the workers known as the Labour Welfare Fund
Act.

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Chapter:2
 Objective of the Study

 To learn the HR Compliance of an Industry.

 To understand the rules and regulation as set up in the Standing Order.
 To understand the checklist necessary for the HR compliances.
 To file the returns and to renew the license of the organisation on time to avoid
non-compliance.
 Social security and its impact on employee working in the organisation.

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Chapter:3
 Analysis

Britannia Industries Limited.

Respecting and upholding human rights and values is deeply ingrained in Britannia culture ways of
walking and value system over the years these plays a fundamental role in internal external interaction
with employees candidates extended workforce consumers partners and other stakeholders the
community environment around them.

Internal Approach
As a organization they are committed to inquire into address and take appropriate action against
anyone who is found guilty of such acceptable behaviour through various internal committees
including those statutory in nature as well as the preventive measures against this action of behaviour.

Governance and Oversight

This policy resonates with the current policies practices and value system Britannia the same is
governed by the management committee to ensure compliance communication and regular amends as
may be required they are code of business conduct COBC specifies mechanism for escalation ranging
from reporting to the direct manager principle manager or the compliance officer they also have a
whistle blower policy with the line of escalation to their Ethics Committee particular to sexual
harassment all complaints are reviewed by the internal complaints committee ICC the management
committee reserves the right to revise the policy it may also establish further rules and procedures
from time to time to give effect to this policy and to ensure compliance with the UN guiding
principles and applicable labour regulations.

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Nestle- Good Food Good Life

They are committed to a strong compliance culture as reflected in the Nestle corporate business
principles they insured their companies managed in the line with principles through internal reporting
in external audit employees suppliers and stakeholders are engaged to report practice or actions
believed to be inappropriate or illegal and we investigate all our plans with him fertility provided
prohibiting retaliation breaches are immediately stopped and appropriate response measures
implemented,

All their employees are expected to be aware of non-compliant or illegal activities occurring in their
work environment especially those related to their code of business conduct they've set up the Hello
name and tales and tell us and the Tell us portal for their employees and stakeholder to raise any
grievances they face.

Nestle Integrity Reporting System

The Nestle integrated reporting system enables are employees to report via phone or an online form
any non-compliant behaviour they observe, or the system also helps employees seek advisor
information on near practices in has been communicated to all natural employees using various modes
of communication including local intranet magazines leaflets in videos.

Tell us
Tell us is a communication channel manage external externally but run by Nestle to support the
reporting of compliance and non-compliance issues against the national Nestle corporate business
principles or applicable laws by external stakeholders as well this portal can also be used by
customers to raise compliance issues and regularity they face while dealing with their products.

They continuously carry out consumer service to understand consumer feedback product satisfaction
and presence while measuring consumer response and satisfaction regularly through the companies
continuous and periodic tracking studies in 216 this survey was conducted with more than 35,000
consumers for random sampling approach currently, they do not have any pending consumer
complaints.

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Hindustan Unilever Limited (HUL)

Unilever purpose is to make sustainable living commonplace. Therefore, their purpose as HR is to be

Catalyst of Change for better Business and a Better World.

Contractual compliance is related to our interactions with builders and 3rd parties.
They are undergoing the correct using the right legal language in contract and monitoring contractual
obligation with 3rd parties.
Call 3rd parties and suppliers must go through the 3rd party risk management procedure and privacy
risk assessment before a contract is signed to ensure the data risks are captured.

 All contract with 3rd parties where personal data is processed should reflect wherever we are a
data controller data processor or a joint data collector all contracts should contain the
appropriate data protection terms.

 Ensure that all contracts with 3rd parties covered by required security requirements.

 Ensure that all contacts with 3rd parties cover the required security requirements.
 Identify all international transfers and apply relevant safeguards.
 All contract owners should review supplier contracts on a yearly basis.

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Uni-Voice:
It is a special platform to figure out the problems occur while performing any work in the workplace.
The motive of this platform is to raise voice of the employees to higher unit. And to take action of the
problem immediately when the concern is raised.

Grievance Point:
It is also a special type of platform to raise concern regarding their compensation/unfair means/
COBP (Code of Business Principle), POSH.

CAD Audit:

This audit defines the annual work engaged in an organization, where all the process was abide by all
the rules and regulations as governed by the law. This audit defines the growth and performance of
the industry in all aspect. Employers in turn try to avoid the non-compliance to happen in the sector.

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Chapter:4
Methodology

For the purpose of this dissertation, the researcher adopted data from various secondary sources
like journals, published articles, reports, newspaper clippings. Based on the information the
researcher studied the various aspects and made a comparative assessment on the identified
parameters which was drawn from different literature review.

The parameters helped the researchers to develop a conceptual understanding about the topic
under study. Based on that a comparative analysis on “Understanding HR Compliance in an
Industry” has been done”.

Since all the companies, irrespective of their ownership and projects undertaken, compete in the
same global market, it is deemed appropriate to analyze one of the leading companies. The data
comprises from three companies Britannia Industries Limited, Nestle and Hindustan Unilever
Limited. The basic motive behind choosing these organizations is increasing global presence in
varying aspects of technology solution.

24
Chapter:5

FINDING
After doing the thorough study of the literature, we can conclude that HR Compliance plays a vital role in the
success of any organization and in a broader perspective we can say that if we want to maintain the standards
set by law and the rules governing the business in the company following things must be done.

 Compliance is part of the organisation’s duties to its commodity and stakeholders.

 Without a compliance function, trust cannot be built to others.

 If there is not compliance function, we invite reputational damage.

 Every employer and employees associated in an organisation must follow the rules and
regulations of the organisation .

 HR compliance can serve as a driver of change and innovation.

 Compliance will reduce unforced error.

 Periodic audit should be done to enhance the work culture systematic.

 For an industry to run smoothly and to run a business , organisation should abide by rule
and regulation as under the law.

 PACE(Process and Control Excellence) Audit-It defines the control management that can
uplift to process the growth of the industry.

 The statutory compliance and industry should follow are as follows:

 Provident Fund

25
 ESIC Benefit

 Professional Tax

 Gratuity Payment

 Statutory Bonus Payment

 Half-Yearly return of Labour Welfare Fund

 Quarterly Return to Sub-regional Employment Exchange.

 Return should be filed, and licence need to be renewed/amended on time.

 Area Audit, 5S Audit(Sort, Set in order, Shine, Standardize, Sustain) etc should be done to
improve the KPI.

 Returns :Half Yearly Return Form-XXIV ,Annual Return Form-XXV, Bonus Return Form-
C &D, Labour Welfare Fund Form-D

 Annual Return under West Bengal Factories Rule (Form 22 )and Form IV under Payment
of Wages Act.

 Annual Return Form -XXVI under Factories Rule.

 Annual Return under Minimum Wages Rules Form III.

 Annual Return Form “L” , “M” and “N” under Maternity Benefit Act,
 Annual Return under Sexual Harassment of Women at Workplace(Prevention, Prohibition,
Redressal), Act 2013

 No adherence to law or regulations will face criminal charges.

 26

Chapter:6

Conclusion

And HR compliance audit also provides a platform for a business to have a look in the mirror moment
and figure out if its operational procedures have had a good bad or social impact on the reputation of
our business audits also has its in visualising and qualifying defects effects of company procedure to
discover previously unseen gaps of weakness to make a pathway for answer to absolve the man main
issue.

The purpose of an HR audit is to determine if your organizations policies are current and if they
compile with federal and state laws governing the workplace.

1. Monitor employees record keeping process for attendance.

2. Review organisations recruitment and selection process to ensure that they are not
discriminatory and that they compile with Equal Employment Opportunity policies.
3. Examine workplace safety measures and risk management practices ensure your workplace
safety logs and reporting processes are in compliance with both federal and state regulations.
4. Evaluate training and employee development opportunities to reveal any disparities in
training method or accessibility by employees.
5. Compile compensation and benefits information in so ensure your organizations privacy
officer is qualified to handle confidential records containing employees medical information
and that the official understands how to apply standards under the health insurance portability
and accountability Act.
6. Grievance Handling is the essential task in the organisation to ensure the trust among the
employees.
7. Returns and license of the organization should be mandatory to avoid non compliance.
Employees should keep in track to file the returns on time to avoid non-compliance.

27
 Chapter:7 Bibliography

Books & Journals:

 Dr S.S. Khanka (2016), Human Resource Management: Text and cases, S.

Chand, New Delhi.

 Industrial Law-P. L Malik

 Labour and Industrial Law- H.L Kumar

 HRD and Law Referencer.

 Labour Law Reporter, Journal, Advocate Gaurav Kumar.

Websites:

 https://www.techfunnel.com/hr-tech/hr-compliance-audit/
 http://britannia.co.in/

 https://www.nestle.in/
 https://www.vskills.in/certification/blog/what-is-the-role-of-hr-compliance/

 https://www.corporatecomplianceinsights.com/hr-function-compliance-role/

 https://venngage.com/blog/hr-compliance-checklist/
 https://hbr.org/2018/03/the-new-rules-of-talent-management
 https://www.hul.co.in/our-company /introduction-to-hul/
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