By Sandesh Chitnis, CEO, Core Integra
Organisations across India and all Industries go through challenges in managing their compliances and the risks associated with the same. Complexities and frequent changes around Indian Labour Law further add to the concern and adhering to the same is getting increasingly difficult. Listed below are a few ways to overcome the challenges.
1. Technology innovation and adaption
Indian Labour Laws are complex and not easy to adhere to, not to mention the constant change that it go through in some form or the other, be it minimum wages, changes, Payroll compliance slabs, etc. The way to manage these business risks and keep pace with the regulatory changes is undoubtedly a robust, yet user-friendly application with all modern techniques adopting Artificial Intelligence, RPA’s, and Machine learning.
2. Multiple state and central laws
Managing and complying with multiple state and central laws is not an easy task and organisations who have multi-state presence face the challenge day in and day out. It requires comprehensive domain knowledge to understand the legal framework. Engaging a robust technology is the most efficient way to manage multijurisdictional compliance. The application ensures data which is managed centrally, creates automation
environment for operations, updated real-time for all regulatory changes, and maintained a complete regulatory framework.
3. Cost efficient compliance
Significant spending for managing compliance for an organisation creates various concerns for the management team. A large organisation with multiple legal entities/ divisions chooses to independently manage their compliance instead of managing the same on an enterprise level creating huge gaps and a very negative impact on Compliance costs. Collaboration amongst multiple teams across different entities is key. This is largely possible with a user-friendly, robust, role-based common application used for managing compliances.
Effective dashboards and analytical MISs can provide the board members with an accurate and collective picture of the organisation as a whole. There are multiple benefits of managing compliance using a robust application, which includes significant cost benefits, meaningful utilisation of resources, and bringing in efficiency and accuracy
4. Compliance governance
Changes to the Compliance laws are frequent and complex. For businesses to adopt changes to the frequently changing Compliance framework is difficult. While India is preparing for Labour code changes, impact and magnitude is yet not clear.
All of the above to be managed manually is practically not feasible and prone to the risk of missing critical changes and resulting in non-accurate compliances. Responsibility to cover and monitor noncompliance for all the engaged vendors is the primary responsibility of the principal employer. With multiple vendors across different regions, locations, and jurisdictions are engaged, auditing their level of compliance are
not just feasible but practically impossible manually. A robust compliance audit application with all acts and laws under the land covered and with flexibility is key for governance.
5. Violations and Timely alerts
While all organisations want to be compliant, keeping an eye on timely alerts is highly impractical in a manual environment. Few instances of non-compliance can lead to severe financial penalties or even prosecution in some cases. These incidents can lead to a huge reputational loss or can hamper future expansion plans such as exchange listing, PE/VC funding, etc.
All of the above can be avoided by using a robust application that issues timely alerts with a clear hierarchy of escalations for non-adherence. The application should be capable of not just providing warnings and alerts but also recommending corrections to prevent future reoccurrences.
