A Guide to Labor Law Statutory Compliance for Businesses

Labor is the technical term for physical work. Industries, factories, and companies employ workers on a large scale for productive purposes. The former is known as the employer, whereas the latter is known as the employee. All employees who work for a company constitute its workforce or labor force.

Both employers and laborers or employees are required to follow some rules and regulations while discharging their duties/responsibilities. These are governed by the law. Given the legal implications of its infringement, the role of a labour law consultant comes to the fore..

Among other things, labor law also encompasses the wages of the employees of a company. Just like other labor laws, the ones concerning statutory compliance serves the interest of both employers and employees alike.

What does labor law statutory compliance mean?

The term ‘statutory compliance’ involves the combination of two words. Each has its own meaning. Statutory relates to any of the aspects that are linked to statute, whereas compliance means adherence. Together, they refer to the adherence to law.

In the language of human resource management, statutory compliance is a legal framework that governs the manner in which employers deal with their employees.

Why is statutory compliance important?

Labour law statutory compliance may vary form one country to the other. But one common factor which binds them together is that the violation of these laws leads to legal consequences. While business organizations also have the legal recourse to challenge a judgment in the court, the fact remains that it is mandatory for the former to observe all the laws strictly without fail.

From minimum wages to professional taxes, companies leave no stone unturned to make sure they cover all the aspects of the checklist concerning statutory compliance. If in any case a company fails to meet its legal requirements in this connection, it stands at the risk of paying fines and penalties.

In a nutshell, statutory compliance is the base which regulates the system in which employers and employees work together in companies. Both are important to the economy of a county, so the law has something for both the parties. The onus is on employers, though. Because they own the company and they deal with the government directly while paying taxes, it is essential for them to have a clear idea of statutory compliance.

Keeping the importance of statutory compliance in mind, companies do not hesitate in investing in the services of a labour law consultant. Most companies employ such lawyers as their full-time employee to get their services whenever required.

How statutory compliance benefits employees

From wages to working hours and the atmosphere in which employees work together, statutory compliance protects the interests of employees in several ways. Here is a list of the ways in which statutory compliance benefits employees.

  • Makes certain that employees do not get an unjust treatment at their workplaces
  • Ensures that employees are treated fairly in their work environment
  • Keeps a check on the payment of reasonable remuneration or wages to employees
  • Regulates the working hours of employees – makes sure that they are not compelled to work for more hours in office
  • Makes a note of the work environment – ensures that employees are not made to work inhuman conditions

How statutory compliance benefits employers

Trade unions take care of the employee rights. But sometimes they can act as disruptive entities that can put business owners in a corner. Statutory law has a provision to prevent this from happening. It gives a clear advantage to employers in the following ways.

  • Shields business organizations for unreasonable demands of pay hike by trade unions
  • Protects companies from getting entangled in a legal issue when it is compliant
  • Prevents companies from coming across adverse incidents
  • Barricades a company from the possibility of adverse incidents
  • Relieves companies from paying fines due to timely payments

Final thoughts

Given the introduction to new laws and systems, the process of doing business has become complicated in the last few years. Consequently, there has been a proportional change in the ways of interaction between employers and employees. Statutory compliance has taken up the role of being the regulatory system which strikes the right balance between both the parties.

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Written by Amy Jones

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