Updated Statutory Compliance Checklist for 2023

Protecting your organization against legal issues is as important as focusing on its growth. You can have a world-class workplace, innovative ideas, well-designed strategies, and a top-notch team, but if you are not adhering to the regulatory laws, all this might collapse in the blink of an eye.

As an organization, you need to adhere to statutory compliances and ensure that your employees are treated fairly. You will need to have a look at the updated statutory compliance checklist for 2023 to safeguard your organization against legal issues.

To avoid unnecessary legal troubles it is important to take care of small things such as paying your employees timely and accurately, offering them the benefits they deserve, and filing taxes on time. However, with so much going on in the organizations, sometimes it becomes difficult to adhere to these laws, even if it’s not the intent.

So what you can do to avoid such situations and stay statutory compliant? No idea? Worry not, today we will discuss in detail the statutory compliance in India and the updated statutory compliance checklist for 2023 so that things don’t slip through the cracks.

Statutory Compliance: The Basics 

Nothing is free of cost, especially the hard work, consistency, and dedication. These are the three big words you expect to see in your employees’ behavior.

History has been legit proof that money always complicates relations. Especially when it becomes a matter of concern for you and your employees. Therefore, it becomes crucial to devise the best course of action.

Today, companies are doing whatever it takes to ensure that their payroll is adequately compliant through a proper audit. After all, there’s no firm who wants “business war” just to screw a hole in its own pockets. Especially with the demands of unreasonable wage coming from employees who were earlier in sync with the business. 

WARNING: Even if it wasn’t an intended attempt of your business to break laws, you might still fall prey to legal troubles, especially when incapacitated with proper protection. 

Good News is that this protection comes in the form of statutory compliance in India which helps the companies to steer ahead of the risk of non-compliance. 

Organizations can simply opt for an efficient payroll software to avoid the risk of non-compliance organizations.  Payroll management makes your HR professionals stay updated on the regulatory changes and prevents any legal troubles. The software itself is compliant with all laws and regulations so manual errors are close to nothing. Moreover, every employee is accounted for properly and the payrolls are processed within hours, making pay-days a success!

risks of non compliance


Risks of Non-Compliance

With the increasing disease of non-compliance spreading like a wildfire, it becomes necessary for the companies to bank upon statutory compliance in HR. Now the year has changed, so it is important to keep an eye on the regulatory changes. Therefore, we recommend you use the following compliance checklist to make new HR policies or make changes to the existing ones. 

Updated Statutory Compliance Checklist for 2023

      • The Employees Provident Funds and Miscellaneous Provision Act – 1952 (EPF)

      • Shops and Commercial Establishments Act (S&E)

      • The Employees State Insurance Corporation Act – 1948 (ESIC)

      • The Labour Welfare Fund Act (LWF) 1965

      • The Professional Tax Act (PT) 1975

      • The Minimum Wages Act-1948

      • The Child Labour (Prohibition & Regulation Act), 1986

      • The Payment of Wages Act-1936

      • The Maternity Benefit Act-1961

      • The Contract Labour (Regulation & Abolition) Act – 1970 (CLRA)

      • The Payment of Bonus Act-1965

      • The Industrial Establishment (N&FH) ACT 1963

      • The Payment of Gratuity Act-1972

      • The Employment Exchange (Compulsory Notification of Vacancies) ACT-1959

      • The Equal Remuneration Act-1976

      • The Apprentice ACT, 1961

      • The Industrial Employment (Standing Orders) ACT 1946 – Model Standing Order Only

      • Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) ACT, 2013

      • The Industrial Disputes ACT 1947

      • The Employees Compensation ACT-1923

      • The Interstate Migrant Workmen (Regulation of Employment and Conditions of Services) ACT, 1979

      • The Trade Unions Act, 1926

    Statutory Compliance Checklist for 2023 in India

    It is the first and foremost responsibility of every organization to keep tabs on the above statutory compliance checklist for 2023. Some of the basic set of rules and laws that require equal consideration are as follows

    Minimum Wages

    The minimum wage act, as mentioned above, speaks up for the minimum amount of money that any worker deserves to ensure that the optimal requirements of the former are met. This wages act takes the best possible care of money and also provides adequate medical help, education, and other relief to the person.

    Get to know the state-wise minimum wages.

    Tax Deducted at Source – TDS

    Every employer deducts the TDS of employees as legally directed via guidelines of the act. Although a lot of employees don’t come under the tax bracket, as the organization’s key responsibility, HR ought to deduct TDS wherever applicable.

    Employee State Insurance and Provident Fund 

    Any employee who draws a salary of INR 21,000 is expected to pay ESIC deduction on a monthly basis. The HR department, on the other hand, deducts this amount and pays it to the ESIC so that the employees are able to access health benefits.


    If any employee completes 5 years of work anniversary in a particular organization, the company extends gratuity in return. The gratuity amount should be paid by the employer for which the employer normally creates provisions out of its own cost.

    If you’ve completed 5 years with your organization then you too are eligible for the gratuity amount. Calculate your gratuity with Zimyo Gratuity Calculator.

    benefits under the ESIC Act


    ESIC Benefits


    Importance of Statutory Compliance  

    A company will succeed at safeguarding itself from a variety of serious legal troubles if it is statutorily compliant. This will also eschew sustainable growth. This is because when employees are fairly treated, they continue to deliver quality work.

    Some of the benefits of a statutory compliance checklist for the private limited companies are as follows:

    1. Drive maximum business opportunities

    Compliance management systems stand as the ultimate support your business can bank upon to access higher ROI. With this, the company manages to win higher bargaining positions during negotiations.  And thus, it can seal the deal in the form of lucrative business contracts

    MORAL OF THE STORY: Therefore, the companies who are staying a step ahead with an advanced compliance regime are reaping amazing benefits in terms of greater opportunities and better prospects for the business.

    2. Raise the employee retention bar

    If a company has got itself covered with statutory compliance in the HR department, the employees have 100% assurance that they are working in a professional, fair, and safe working environment. This, therefore, gives them the idea that it is going to take the best possible care of the interests involved. 

    Statutory compliance in the HR department further reinforces the company’s ability to carve an “employee-friendly” environment, and the company can undo any law issues regarding labor or employment. 

    A company ought to fully comply with its labor and employment law requirements to gain the trust of its employees who are looking forward to working with a company that genuinely cares about their overall welfare and well-being. 

    This will make the dream work environment happen for real, thereby increasing enthusiasm and satisfaction among employees. Such employees are very likely to stay with the company for a longer period, thereby taking the rate of employee retention a notch high.

    Compliance with necessary statutory requirements will help a company shut out the chances for inevitable consequences of non-compliances. These risks might include complicated lawsuits, work stoppages, revocation, or suspension of licenses.

    Furthermore, it can result in disqualification of its officers or directors, payment of penalties, imprisonment of officers or directors, and even complete shutdown maintain a considerable distance.

    4. Significant improvement in business operations

    A company that complies with all the applicable statutory compliance requirements can utilize the resources and time on its core business activities and R&D. This can direct it towards the path of improved business operations. Moreover, with secure business operations, the company achieves tremendous growth, getting closer to becoming BIG.

    5. Brand loyalty

    Doing so will further extend assurance to the key investors and stakeholders of a company that the latter considers statutory compliance as one of its #1 in the list of priorities. This also ensures that the company has efficient compliance management programs and tools for carrying-off compliance with essential statutory requirements. 

    The proper agreement represents a company’s awareness and expertise in staying afloat with relevant regulatory mandates along with its sincere commitment to keep with high ethical standards. 

    It brings a company’s intention to proceed fairly and transparently into the limelight. As a result, the employees, vendors, and customers- each and every active member begins finding the company trustworthy and reliable. This eventually strengthens brand equity and loyalty among its important stakeholders.

    Statutory Compliances In HR


    Statutory Compliances in HR

    Statutory Compliance Checklist for 2023:  What should the employees know

    When a company gives a thumbs up to statutory compliance in HR, its employees as the most important members get treated, exactly the way they deserve. Are you curious to know what sort of benefits statutory compliance brings?  

    Go through the following benefits of statutory compliance in HR centered for employees:

    1. The Payment of Bonus Act (1965)

    Employers roll out bonuses to their employees under the Payment of Bonus Act. Mostly, businesses comprising approx. 20 or more employees offer the bonus which is calculated on the basis of the profits incurred by the establishment and the employee’s salary. 

    For example: If a working professional draws ₹21,000 or less per salary on a monthly basis, they are deemed eligible for the bonus payment in the ongoing financial year. 

    The minimum rate of paying a bonus is calculated 8.33% while the maximum rate is 20%. If any employee is caught red-handed in any misconduct or fraud, they can become ineligible to access bonus payments.

    2. PF (Provident Funds)

    Provident Funds and HR compliance are important and complement each other. Provident Fund is a straightforward explanatory term used for the money saved throughout the working years of an employee.

    The provision of the Provident Fund ensures employees access to some amount of income when they retires from the job. If the employee, unfortunately, meets early death, the PF is then passed on to his/her family members.

    3. TDS (Tax Deducted at Source)

    When an employee receives a payment, his/her TDS gets deducted under the Income Tax Act. Employers are responsible to deduct TDS as per salary of employees. Deducted TDS required to deposit on a monthly basis with the income tax department. Further on a quarterly basis, TDS return is also required to be filed by the employer. Employers issue TDS certificates (i.e. Form 16A & B) to employees.

     The following  Elements Also Impact the TDS deductions:

    • Medical allowance
    • Education
    • Investments
    • Travel leave

    4. Professional Tax

    The State Government levies a professional tax on every working professional who earns a living through any medium. This tax, as well as its calculation, can vary from state to state. Furthermore, on the basis of the state-declared slab, the professional tax is subtracted. 

    However, there are a few states and union territories that do not charge any professional tax on working people. The annual professional tax gets divided into 12 equal installments which are required to be paid on a monthly basis. However, in the month of February, the professional tax is seen to be higher than in the rest of the months.

    New Tax Regime 2023

    ₹7 Lakh 33,800 0 33,800
    ₹8 Lakh 46,000 35,000 11,600
    ₹9 Lakh 62,400 45,000 17,400
    ₹10 Lakh 78,000 60,000 18,000
    ₹12 Lakh 1,19,600 90,000 26,900
    ₹15 Lakh 1,95,000 1,50,000 45,000

    Wrapping Up

    Companies who pay sincere attention to the importance and relevance of statutory compliance in HR will be able to gain maximum ROI and boost the bottom line. How it can do so? The answer is simple – by offering protection against non-compliant issues. So, in case you have not made your firm fully compliant – follow the above statutory compliance checklist for 2023 and protect your business!

    It is definitely going to be a total WIN-WIN, for you, your employees, and your business. Thus, helping your business steer ahead of the competition and boosting growth that inspires others who aspire the same.

    PS: If statutory compliance looks like rocket science, extremely difficult to understand, then scroll above and go through the statutory compliance checklist for 2023. This is surely going to work in your favor.

    Calculate taxes and stay compliant!

    From timely remunerations to tax deductions and law compliances, Zimyo Payroll handles it all.
    Zimyo Favicon
    Zimyo Editorial Team

    Meet our fantastic editorial team, tirelessly crafting high-quality content. With a passion for HR and a commitment to excellence, they ensure you stay informed and empowered. Our HR content providers specialize in delivering expert insights and industry trends. And don’t forget, we offer top-notch HR & Payroll Software to streamline your operations. Stay connected for valuable HR knowledge!

    Lets stay in touch!

    Shift to Modern HRMS, built for Next-gen Workforce

    More Insights!