Is It HR's Job to Handle PF, ESIC, PT Payments and Salary Submissions?

Hello Friends,

I have a query regarding HR authorities and responsibilities. I would like to know if the payment of PF, ESIC, and PT is the responsibility of the HR department. Additionally, is salary submission for staff to the bank also the responsibility of the HR department?

In our organization, the Accounts department is interested in handling these tasks. Is this the right approach?

Regards

Dear Madhu,

Each of the activities that you have mentioned falls within the purview of the HR Department. However, of late, the trend is to outsource the activities you have mentioned, while HR focuses more on core HR issues such as training and development, career planning, performance management, and talent management.

If your accounts team is interested in handling the routine activities, then instead of outsourcing, it would be better to allow them to manage these tasks. This approach will offer you two key benefits. Firstly, you can save on outsourcing costs, and secondly, you will be able to focus on high-end HR activities.

Thanks,

DVD

Hi,

The remittance of these amounts to the respective authority can be done by the accounts department, meaning the payroll process can be split into two parts: 1. Preparing attendance, LOP, etc. 2. Salary calculation and deductions. The latter part can be done by the accounts department with all necessary remittances.

Jay

Hello Mr. Dinesh,

We are not outsourcing this; we are submitting it to the bank through our office boys. For the past two years, I have been handling this, but suddenly, another department wants to take over.

Regards.

Of course, the enrollment of employees for PF, ESIC, PT, etc., and monitoring their payments to the respective organizations are the sole responsibilities of the HR department. On the other hand, while payment is the responsibility of the department that disburses salaries and other day-to-day payments. If the accounts department is also involved in disbursements, the payment of those amounts would also become the responsibility of the accounts department.

If disbursements are already being handled by HR, but the accounts department is willing to take on that responsibility as well, there is no harm in delegating the disbursement task to the accounts department.

PS Dhingra
Vigilance & Transformation Management Consultant
Dhingra Group of Management & Educational Consultants
New Delhi

Dear friends,

There is nothing called "authority and responsibility" in working culture. Please rephrase it as "accountability and responsibility."

Since you have specified about ESI and PF, I will try to relate to this particular role.

1. Who is responsible to cover employees under PF or ESI.

Responsibility lies with the person who prepares Payroll. If the Payroll is prepared by Accounts, then they are responsible.

2. Who is accountable for the coverage?

This is decided by the person who recruits the employee. The coverage decision is made at the time of recruitment, and the department handling joining formalities will be accountable. They should advise the payroll accordingly. If a person is not covered, they are primarily accountable for the lapse.

3. Who is responsible to make the payment of contributions?

Payroll and accounts are responsible for any payments. They need to prepare the challans and make payments on time.

4. Who is accountable for the payment?

The HR Department is generally accountable if the payment is not made on time. HR is answerable and should monitor whether the responsible person is fulfilling their duties.

If you try to answer the questions on accountability and responsibility for every role, there will be a smooth process flow. The word "authority" invariably blocks the smooth flow in any process.

The word "authority" should be more linked to critical decisions.

Examples:

1. Whether an employee is covered under ESI or not based on salary structure is to be decided by the HR Head, and if there is a dispute, they are accountable.

2. If the company does not have enough funds to pay PF contributions on the due date and there will be a delay by 15 days, it is purely a Treasury decision, and HR cannot make the decision. The Finance Head, probably in consultation with the Board, will make the decision.

Please focus on accountabilities and responsibilities rather than authority and responsibility.

Thanks,

T. Sivasankaran

Having some queries about HR Authorities & Responsibilities. I would like to know if the payment of PF, ESIC, PT is the responsibility of the HR department. Also, is salary submission for staff to the bank the responsibility of the HR department? In our organization, the Accounts department is interested in handling these tasks. Is this the right approach? Normally, all these activities fall under HR. Initially, organizations may not have a dedicated HR department. During that time, these responsibilities are managed by the Accounts department. As the organization expands, these functions are typically divided among departments.

In labor-oriented organizations, the Accounts department often manages salary disbursement, while HR handles preparation. Accounts departments consider themselves money custodians and may try to take over certain aspects like preparation and clarification, leaving the more challenging tasks to HR. However, in principle, these responsibilities belong to HR.

In other organizations, these tasks are usually handled solely by HR.

Nagaraj S N Associates

Different companies follow different practices and processes; however, the most commonly followed practice is given below:

HR Dept. looks after the time office function and computes the number of salary days payable for each employee every month.

Based on the Salary Days provided by the HR Dept., the Accounts Dept. will compute and disburse salaries to employees after deducting all statutory obligations.

In companies utilizing good HR MS & Payroll Software, all the Master Details of an employee and their salary are updated and edited by the HR Dept. The HR Dept. alone will have the rights and login for master updates. The Accounts Dept. will only have the rights to update elements like Income Tax Deductions, Loan Recovery, etc.

The Accounts Dept. is responsible for the deduction and timely payment of contributions to ESI and PF. They hand over the payment challans to the HR Dept. for filing returns and maintaining records.

The HR Dept. is responsible for Legal Compliance; only deductions and payments of contributions are handled by the Accounts Dept.

Thanks & Regards

Hello Friends,

Having some queries about HR Authorities & Responsibilities.

I would like to know if the payment of PF, ESIC, PT is the responsibility of the HR dept? Also, is Salary Submission for staff to the bank the responsibility of the HR Dept.? In our organization, the A/c dept. is interested in handling these tasks, is this the right approach?

Regards