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 For a company, statutory non-compliance can only result in legal proceedings that can have serious implications such as fines, imprisonment, cancellation of licence and so on. By complying, not only can a company avoid all the legal hassles, but also witness spike in employee productivity, which, in turn, will improve business growth as employees are taken care of by the management.

That’s not where the benefits of compliance end. Here are some other fruits of a company being statutorily compliant.

a) Attracting talent

When job seekers know that your company has a pedigree of treating employees correctly, paying them fairly, and never infringing on labour and employment laws, they’ll want to sign up. As mentioned earlier, by statutorily complying, employee productivity, the work environment will only get a boost which will equip employees with the necessary tools to further themselves.

With such a reputation, your company will be able to attract talent and reduce attrition.

b) Transparency is key

Any company that is statutorily compliant draws many eyeballs for all the right reasons. Your vendors, customers, investors, stakeholders, and employees will realise that you are completely transparent and that you take it upon yourself to have contingencies in place to handle statutory compliances without risking legal proceedings and liabilities.

Any business should operate ethically and within the confines of law and order; it’s what will improve their reputation in the long run.

c) Excellent prospects

Being statutorily compliant means adhering to government laws and regulations. A company can leverage this aspect to have the upper hand in any business negotiations. Moreover, business contracts and new prospects will come their way.

d) Keeping fines at bay

Non-compliance can result in a sea of problems, such as imprisonment, fines, cancellation of licence, and shut down of the business. But if a company adheres, it can divert focus towards other important aspects such as employee retention, operations, expansion and so on. With all the risks and liabilities out of the way, resources are feed up which the companies can utilise for business growth.

e) Productivity and retention

Employees need to feel valued. They need to be treated fairly, paid on time, and looked after. When your company follows the statutory protocols for the welfare and wellbeing of its employees, an increase in productivity and employee retention is a given.

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It’s not as if work environment, career growth, fair treatment are the only good things that go an employee’s way if his/her employer is statutorily compliant. Here are the other benefits:

 

 

a) Professional Tax

Statutory compliant employers also save employees the trouble of depositing Professional Tax with the government.

b) Tax Returns and Exemptions

Under The IT Act, employees are also entitled to file Income Tax Returns that helps them save taxes. Moreover, while filing the returns employees, with the help of their statutorily compliant employer, can proffer from tax exemptions.

c) EPF (Employee Provident Fund)

Statutorily compliant companies must also mandatorily contribute 12% of the employee’s basic salary toward his/her provident fund. Out of this 12%, 8.33% is contributed towards the EPS (Employee Pension Scheme). These funds can be withdrawn by the employee in times of unemployment or after retirement.

d) The ‘’Bonus’’ for employees

Employees can garner a bonus on top of his/her pay as per the Payment of Bonus Act, 1965. Although it applies for certain establishments with 20 or more employees, your employer (as per the Act) is obligated to pay a bonus o the basis of the company’s profits, production, productivity.

An employee drawing INR 21,000 or less qualifies for the bonus which can be anywhere between 8.33-20% of the salary.

Conclusion – Noncompliance of these laws results in legal and social damage to the employee and the employer and the organisation. The best one can do is be aware and religiously adhere to the rules and regulations.