Facing Compliance Challenges with a New Business: How Should I Respond to a Labor Inspector's Notice?

Hello, I started a web design company 9 months ago, and 4 employees are working with me. Forty-five days ago, a labor inspector and an assistant visited the premises and requested forms and compliance. I explained that it was a new firm and requested the necessary forms to submit. The inspector mentioned that the form was not available in his office or online, and I had to obtain it from a xerox shop. I inquired about any associated charges, but they did not provide a clear answer. The assistant insisted that I would be informed of any fees when I visited their office. They obtained signatures from me and my employees during the visit and requested me to come to their office.

After the inspection, the inspector filed complaints, stating that I did not produce the registers P, Q, R, S, T. Additionally, he pointed out that my name board is in full English, and the inspector register was not maintained. I have received a notice stating that I must pay a fine. If I fail to respond within 7 days, the inspector may initiate court proceedings.

Seeking Guidance on Compliance Issues

I seek guidance on how to respond to this situation as I am willing to comply with all legal requirements. Considering that my business is new and has fewer than 5 employees, do I qualify for any exemptions?

Your prompt assistance in this matter would be greatly appreciated. Thank you.

Dear Vivek, In general, the commencement of the application of any labor law to the persons hired is concurrent with the dates of their employment in the establishment unless anything specifically provided for otherwise. As far as I know, the very application of the State Shops and Establishments Act is not conditioned by the number of employees hired. Even if there is a single employee, the Act would apply, and the employer is expected to maintain the prescribed registers and notices pertaining to employment.

When the Inspector pointed out the defects he noticed during the course of his inspection itself, don't you think that he was acting under some statutory authority and your immediate compliance thereof your statutory responsibility? In this context, the suggestion of your friend seems to be an illegal advice. Instead, you ought to have consulted some other employer who is law-abiding or visited the office of the inspector for further guidance.

Now, it would be better to pay the compounding fee imposed while complying with the maintenance of the documents mentioned.

Yes, I felt a responsibility to comply at first, but what made me suspicious is when I asked whether I need to submit forms only or if there are any government fees associated, their reply was, "Come to the office, let's talk there." They could have provided the necessary information upfront. Is this the way a government official should approach such matters? Their non-transparent approach made me hesitant.

I also consulted with other law-abiding employers who mentioned that they had to bribe officials to ensure compliance, which confirms their intentions. Furthermore, for your information, they listed all complaints after obtaining the signatures.