An organization can only function properly if every process is streamlined and organized. There are several rules and regulations which the organization has to comply with to stay on the safer side of the law. These regulations are not limited to finance and quality of products or services, but it also extends to other aspects such as the communication and interaction between the company and employees. It is known as statutory compliance or labor law compliance. Such laws provide a legal framework that the companies follow to ensure better treatment of the employees. The Statutory compliance in HR is essential to make sure every employee has the required information about the regulation and rights.
Why is labor law compliance essential?
Labor laws help in safeguarding the interests of the employees and ensure that the employer does not exploit them. In return, these regulations also assist in establishing employee’s loyalty towards the employer. In case the company does not adhere to the regulations imposed by the state, there are chances that it may land in legal consequences.
Any legal battle with the employees may lead to hefty penalties on the company, which will not only put the company in financial turmoil but will also ruin the reputation in the market. Those companies which willfully decide not to oblige with the rules and regulations face penal actions. Thus the companies need to follow the rules and regulations to ensure they do not face any legal consequences under labor laws. Also, by following the regulations, the company ensures there is a safer and trustworthy environment for the employees.
Federal labor laws
The regulations which are common across the state borders come under federal labor laws. These laws mostly act as the umbrella laws for the state-specific regulations. For example, the national level minimum wage is standard among every state. However, on the state level, the minimum wage for specific industries can be different. The company needs to take permission from the central government to run a business that may have industry-specific regulations. In those cases, the central government issues a specific certification that ensures the company has been informed about the labor laws.
State labor laws
Every state government has its own set of rules and regulations which every company working in its borders has to adhere with. For example, in some states, the company may have to pay lesser taxes but higher wages to the employees. Many companies decide the minimum wage based on the state labor laws and also factor in the cost of living in that particular state. The state government generally regulates the terms and conditions which the company has to follow to establish a healthy relationship between the business owner and the employee.
The companies that operate in multiple states have to make sure that they comply with not only the federal labor laws but also with the state labor laws. As there might be differences in the regulations in every state, the company needs to have separate labor law posters for every state, which explains the rights of the employees in a simple and easy-to-understand way. The regulations should be made available in the regional language as well. The employees have to be informed about the regulations at the time of joining.
Industry labor laws
Every country has a formal and informal workforce. The informal workforce may comprise of short term workers or freelancers who are not covered under the broad spectrum of labor laws. For example, there is no minimum wage prescribed for a freelancer, while an employee on a similar job should get a specific amount as salary every month. The Statutory compliance in HR ensures that the employees know about these laws at the time of joining the company.
Different rules and regulations for different industries
To make sure the company complies with the labor laws, it is essential to check the regulations specified to the particular industry in which the company operates. There are some critical regulations related to Minimum Wages, Payment of Wages, Payment of Bonus, Trade Unions, etc. which are common among the industries. However, there are some industry-specific regulations, such as for mining, pharmaceutical, building and construction, and more. The management must ensure that the company stays in compliance with every regulation.
Why there is a need for different regulations
In many industries, the risk of life is much higher at work, and the employees may suffer injuries. To safeguard the interest of the employees and to make sure they get the necessary support at the time of an accident, there are several regulations that are industry-specific. For example, an industry that manufactures medicines should provide masks to its employees, and the company that makes pesticides should provide proper gear to the employees to save them from harmful fumes.
It is the responsibility of the federal and state government to issue industry-specific compliance certificates before a company can start its operations. To get such certification, proper inspection of the premises is done by the concerned departments. Some of the factors which may affect the certification are the presence of fire safety equipment, electric installation, availability of toilets and restrooms, and more along with safety regulations. It is the responsibility of the company to ensure statutory compliance in HR so that in case an employee is shifting from one industry to another, he is informed about the different regulations at the time of joining.
Remedies available for the employees and the role of the unions
In case a company fails to comply with the federal, state, or industry labor laws, there are several remedies available for the employees. The first step that an employee can take is to inform the union and seek legal help from the attorneys hired by the union to help the employees. In most cases, the union provides a solution and helps in creating a safer work environment. In case the union is unable to help the employee or refuses to provide legal remedies, the employee can go to a court and file a lawsuit under the specific labor laws. It will be the responsibility of the state or the federal government to provide the necessary support to the employee.
Understand your rights under labor laws
There are several rules and regulations which a company has to follow to ensure compliance. It is the responsibility of the employer to inform the employees about the rules, regulations, and the rights that an employee has. The Human Resources department provides such information at the time of the joining. In case the laws are not clear, it is mandatory to publish them in the form of a poster on the industry premises. Also, you can find the detailed regulations on state ministry’s website.
While the company needs to comply with the regulations, it is the responsibility of the employee as well to inform the authorities in case the company fails to follow the regulations. To be on the safer side, the company needs to adhere to the regulations on federal, state, and industry levels.