Karma Global rebuilds compliance for businesses with robust integration as the cost of non-compliance could be more than the cost of compliance!!!!!
Karma Global one of the top 5 labour law consulting firms in the country, has recently hit upon yet another significant milestone in the journey of tying up with SUNDEEP PURI ASSOCIATES AND ADVOCATE, where both these Firms have formally joined hands together to collaborate and create a bigger alliance by scaling up its business on Pan India basis and Internationally to give greater reach of its services together, to its hundreds of clients all over.
The pandemic has changed the very way we do business, disrupting everything from global supply chains to financial markets which subsequently paved the way for change, new adaptations, and rebuilding of business models with compliances being at the heart of this change.
In this context, the Enterprises to need a change in mindset for those who want to remain on the right side of the law. “If the government can change, corporations need to be faster than the regulatory authorities in changing their mindset in this automation game.
Only a few years back, we had compliance people to check and update on compliances conforming to the prevailing laws but now the nature of work is changing and we have the platforms that put all the dates, and laws in the form of a checklist for us, which comes as a lifesaver,”.
At present, not all but most of the companies have woken up to the reality of this changing compliance landscape with the announcement of the new labour codes, and with it, there is a growing trend towards digitalization to improve compliance and ensure that organizations are saved from the stiff penalties imposed on defaulters. “Every other day you have a different regulation change happening across numerous States, recent example with Chattisgarh going in for old pensions while other States are opting for new pensions.
We have many vendors who are going towards digitalization to track these compliances and regulation changes,” and Karma Global is proud to have adopted the new AI technology and automation much before others could even think about it. With the changing notifications from the government, and the requirement of reporting real-time data to authorities on a monthly/quarterly/half-yearly, and annual basis, it is a technology that has set new standards and disrupted traditional methods and practices.
An increasing number of companies today are using a mix of internal and externally developed technology tools to keep pace with the fast-changing compliance landscape and are standing with Karma Global for its state-of-the-art “Weprocess” and “Wechecked” tools that offer advanced features, chatbots, machine learning, single uploading of all documents, and final evaluation together with remediation of non-compliance.
“The compliance scenario in India has gone so far that everything is interconnected. One failure somewhere is going to reflect in many records. We see the government rolling things out step by step to make sure that they have a more robust compliance mechanism and a compliance-driven economy.
So in this regard, besides the business profile of Karma relating to labour laws, it will now focus whole time also on legal and paralegal issues and matters with the collaboration of Sundeep Puri & Associates who are already into legal matters such as disputes, litigation, and court cases.
STARTUPS IN INDIA CANNOT ESCAPE ESSENTIAL LABOUR LAWS …!
What is Labour Law Compliance :
Labor laws are a set of rules that govern employers’ and employees’ functioning in the workplace. Labour is an organization’s most valuable asset, and labour laws are enforced to guarantee that their rights are safeguarded and that they are not exploited. It governs businesses, employees, and labour unions. Noncompliance with the legislation may result in violations of the laws resulting in prosecution for the Company.
Who is the Enforcer of these labor laws?
The Ministry of Labor & Employment has published guidance to the States/UTs/Central Labor Enforcers for a compliance regime focused on self and regulating inspections under various Labor Laws in an effort to enhance the Start-Up environment in the country and incentivize startups in establishing new start-up ventures and thus help facilitate the formation of career opportunities through them.
The advice to state governments is to create an administrative framework to oversee the inspection of start-ups under such labor regulations so that start-ups are motivated to be self-disciplined and follow the rule of law. These policies aim to protect enterprises against harassment by limiting discretion and arbitrariness. When there is a breach of these labor regulations, however, punitive action will be taken.
What are Government initiatives for Startups
The Indian government has created a single Shram Suvidha Portal to make reporting inspections and submitting yearly reports for compliance with labor rules easier. Startups can use the online system to file self-certification under applicable labor regulations and avoid inspections for up to 5 years. More details on the Shram Suvidha are mentioned below.
AS PER THE GOVERNMENT’S ELIGIBILITY CRITERIA FOR START-UP RECOGNITION:
- The Start-up should be incorporated as a private limited company or registered as a partnership firm or LLP
- Turnover should be less than Rs. 100 Crores in any of the previous financial years
- An entity shall be considered as a Start-up to 10 years from the date of its incorporation
- The Start-up should be working towards innovation/ improvement of existing products, services, and processes and should have the potential to generate employment/ create wealth.
- It must obtain certification from the Inter-Ministerial Board set up for such a purpose.
An entity formed by splitting up or reconstruction of an existing business shall not be considered a “Start-ups”
The startups according to the new policy may self-certify compliance with respect to the following labour laws:
- The Inter-State Migrant Workmen (Regulation of Employment & Conditions of Service) Act, 1979
- The Payment of Gratuity Act, 1972
- CLRA or The Contract Labor Regulation & Abolition Act, 1970
- The Employees Provident Funds & Misc. Provisions Act, 1952
- The Employees State Insurance Act, 1948
- Industrial Employment (Standing Orders) Act, 1946
- Trade Unions Act, 1926
- Industrial Disputes Act, 1947
- In the case of environmental Laws, startups falling under the white category as defined by The central pollution control board would be able to self-certify compliance.
What is the Benefit of Startup Schemes?
Starting a business is a challenging task. There are legal compliances as well which need to be taken care of, based on which industry you enter into.
That is why the government comes up with various schemes to ease the process of establishing a business, especially small businesses. Supporting small and middle business entities helps strengthen the economy in the longer run. Coming back to startups, given below are the benefits when it comes to startup compliance:
- The simplified process through mobile applications
- Reduction in costs including trademarks and patent processes
- Easily accessible funds as venture capital
- Tax exemptions for a limited period in the initial years
- Eligibility to apply for government tenders without complying with the criteria related to prior experience or turnover
- Facilities for Research and Development (R&D) sector
- Time and money-saving compliance process
- Tax savings for startup investors
- Easy exit/ windup for startups from the business world
Still, some labor law compliances for startups in India need to be duly complied with as required by the authorities.
GOVERNMENT OF INDIA – MINISTRY OF LABOUR & EMPLOYMENT :
Improve ease of doing Business
Initiatives are taken by the Ministry of Labour & Employment for Ease of Doing Business
Shram Suvidha Portal: In order to bring transparency and accountability in the enforcement of labour laws and ease the complexity of compliance, the Ministry of Labour & Employment has launched a unified Web Portal ‘Shram Suvidha Portal’ on 16.10.2014, catering to four major Organisations under the Ministry of Labour, namely –
- Office of Chief Labour Commissioner (Central),
- Directorate General of Mines Safety,
- Employees’ Provident Fund Organization; and
- Employees’ State Insurance Corporation.
The Portal provides for allotment of a Unique Labour Identification Number (LIN) to establishments, filing of self-certified and simplified Single Online Common Annual Return by the establishments, and also a transparent Labour Inspection Scheme through a computerized system based on risk-based criteria and uploading the inspection reports within 72 hours by the Labour inspectors.
- Launching of the Shram Suvidha Portal has facilitated bringing transparency and accountability leading to better enforcement of Labor Laws. The transparent Labor Inspection Scheme has reduced the discretionary powers of the Inspectors and brought transparency to the inspection system thus minimizing the harassment of employers.
- The facility of Online registration for allotment of Unique Labor Identification Numbers (LIN) and the Transparent Labor Inspection Scheme was started on the Portal with its launch on 16.10.2014 itself.
- The filing of Single Unified Annual Return for 8 Labor Acts (10 Central Rules) was launched on 24.04.2015. It has facilitated easing the compliance burden of employers. Returns under the Contract Labor (Regulation and Abolition) Act, 1970, Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979; and Industrial Disputes Act, 1947, which were half yearly / annually earlier, now need to be filed by all employers annually only. This effort is evidence of the use of technology in order to enhance transparency and minimize harassment contributing to ease of doing business.
CONCLUSION – start-ups have to equally oblige labor laws:
Like other small and big entities, even Startups have to equally oblige the industrial labor laws although they may not be that strict in their early days of incorporation by the government.
Exemptions given by Government are a big boost up
However, the exemptions provide a definite period for these startups to understand and streamline the basic of these laws and the terms which will relate to their industry of work in the future.
Government-provided strategy to self certify
Labor law compliance is required of all companies and sectors, and for promoting startups, the government has devised a strategy to self-certify nine labor laws and environmental regulations for a period of three years, ensuring that new entrepreneurs have fewer obstacles and get familiar with all labor law compliances during that time. The government’s decision to support startups in India is a wise one, as it will help to strengthen the startup industry, resulting in more job prospects.
Helps to cross over hurdles in an easy manner :
The above being the key legal requirements under the labor and employment laws in India, startups must ensure compliance to avoid any hurdles in carrying out their business operations. Also, in the recent case scenarios, where start-ups and companies are getting merged or acquired, it is essential to delve into employee rights and liabilities during such corporate action for the smooth functioning of the industries.
Karma Global works across a wide variety of industries, constantly looking for ways to offer new services and increase its global businesses.
In order to serve today’s technology to tech-savvy clients and employees, Karma Global planned much ahead of its time by adapting to processes and systems to accommodate the quickly changing markets.
As the Industry is continuing to get more and more competitive, Karma Global is bridging the gap, setting itself in tune with the latest technology trends in order to maintain a competitive advantage for all of its over 400 domestic and global clients.
Automation and AI – Karma Management was among the first to improve efficiencies, the first in the vendor auditing process to fully automate and streamline any and all processes surrounding the auditing business of entities and vendors.
The chatbot and AI did a fabulous job of giving machine output, with a quicker pace, cheaper rate, and more accurate level of auditing and reporting.
This helped in elevating the roles of our Auditors to focus on complex tasks that require more brainpower or the human touch, leaving some of its tasks to the capabilities of the machine.
Incorporating chatbots in customer service allowed time for our expert representatives to spend time dealing with more complex issues which could ultimately add to the user experience and this is what set us apart from others.
Automating repetitive processes in our systems helped us free the valuable time of our expert staff allowing them to reach out to more clients.
For this purpose, Karma Global has both full-time IT-related staff and also indirect staff who are freelancing with us for enhancing our IT capabilities to the next level on the cloud platform.
Also, clients with issues such as litigation, disputes, closure, lockdown, retrenchment, and layoffs could take the help of Karma Global in sorting this out since it now has a formidable partner by the name of Sundeep Puri & Associates to provide further solutions on such or any legal entanglements.
Proprietary blog of Karma Management Global Tech Firm
This blog has been collated and compiled by the internal staff of Karma Global with the knowledge and expertise that they possess, besides adaptation, illustration, derivation, transformation, collection as well as auto-generation from various sources, for its monthly newsletter Issue 09 of March 2023 and in case of specific or general information or compliance updates for that matter, kindly reach out to the Marketing Team – Kush@karmamgmt.com / yashika@karmamgmt.com