Statutory Compliance Audit
Most companies believe they are compliant because their payroll vendor files returns on time. Filing on time and filing correctly are different things, and the gap only becomes visible during an inspection, a diligence exercise, or a dispute.
The problem
Compliance failures accumulate silently. Salary is structured to reduce PF liability in a way that will not survive scrutiny. Contract labour is engaged without verifying the contractor's own filings, leaving principal-employer liability with you. Minimum wage notifications were revised and nobody updated the rates. Bonus was calculated on the wrong base. Each one is individually small and cumulatively serious.
What this covers
- Provident Fund — coverage, wage definition, contribution accuracy and filings
- ESI — applicability, coverage and contribution verification
- Minimum wages checked against current notifications for your state and category
- Bonus, gratuity and leave encashment computation reviewed
- Contract labour — licences, principal-employer exposure and contractor compliance
- Shops & Establishment and factory registrations, returns and registers
- A prioritised remediation plan separating real exposure from paperwork
Why me for this
Responsible for statutory compliance — PF, ESI, minimum wages and bonus payments — across manufacturing plants and a fifty-branch multi-location service operation, alongside liaison with MCD, DoEF, DPCC and Police, and postal certification.
Common questions
How often should a company run a statutory compliance audit?
Annually for most employers, and immediately before any diligence exercise, fundraise or acquisition. Multi-state employers and those engaging significant contract labour benefit from a half-yearly review, because state notifications change more often than internal processes track them.
Our payroll vendor handles compliance. Do we still need an audit?
A payroll vendor processes what you give them and files on the basis of it. They do not typically verify whether your salary structure will withstand scrutiny, whether your contractor is actually depositing what they claim, or whether minimum wage notifications have changed. The liability remains with the employer regardless of who does the filing.
What is principal employer liability for contract labour?
Where a contractor fails to pay wages or deposit statutory dues for workers deployed at your premises, the liability can fall on you as principal employer. This is one of the most common and most expensive exposures found in audits, and it is entirely preventable through routine verification of the contractor's filings.
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