How Can I Manage Employee Pushback on New Statutory Deductions Alone?

Dear Seniors, I am working with a travel company in Karnataka, and my company is recently registered under the Shops & Establishments Act. Till date, there were not many deductions in the salary as there was no HR to recommend the basic requirements. Now, since I joined, I have introduced PF, Gratuity, and other statutory amendments in the company. The management gave permission, but the employees are not supporting the change as they are not even ready for PF deductions and are threatening the management to resign, saying that they don't want any changes in the organization.

Handling Employee Resistance to Statutory Changes

I understand that whenever a company brings any changes, employees' reactions are not always positive. But I really don't know how to handle the situation as my Directors are also on a business trip, and I need to handle the scene on my own.

Please suggest how to convince them as they are not ready to understand the law requirements also.

Regards,

I appreciate your initiative regarding process adherence in your organization. However, in any situation, a complete transition will not be appreciated by any employees, even if it brings extra benefits for them. You mentioned that you tried to implement Gratuity and other statutory amendments; are you planning to deduct any amount for those? If so, employees may not be happy.

Please make them understand that as per the S&E Act, you need to have PF in place. This is not just your initiative; it is an order issued by the Labour Inspector. This will help prevent direct blame from employees. Always remember that not all employees who threaten to resign will actually resign. Good luck!

Thank you for your reply and for your appreciation. Regarding deductions, we are deducting PF (employee's contribution), PT, and IT (which is refundable). In addition to their salary, they will be getting PF benefit (Employer's share) and Gratuity benefit.

The problem is basically coming from some lower-level staff as they are unable to bear even minimal deductions. For now, I have told them that as per law, it is mandatory, but I am hoping for things to fall in place as smoothly as possible.

I would suggest that when we are making a transition, there is bound to be opposition. It would have been a good idea if you had kept the net pay the same even after the deductions. This would have ensured that we had less resistance at the start. Subsequently, when you have your annual salary revision, this could have been regularized.

Convincing Employees to Enroll in PF/Pension

You should convince the employees to enroll in PF/Pension, etc. What is required to be deducted statutorily should be deducted. If payments are made directly from the company account to avoid resistance, this practice will need to be consistently followed.

Regards,
Varghese Mathew

Please convey to your employees the benefits they receive from various acts for themselves and their family members, such as ESI, PF, and gratuity benefits. Ensure that they understand these benefits are to be followed as per the norms of the government. Additionally, inform them that this is the first time you are implementing these various acts. Therefore, you need to educate them on these acts and explain the benefits.

Regards,
Uday Kumar