Navigating Labor Inspections: What Records Do Compliance Departments Really Check?

Inspection by Labor Compliance Departments

What records are checked by the various labor compliance departments like the labor office, PF department, and ESI department when they come for inspection?

Impact of New Labor Codes on Record Maintenance

Does the change to new labor codes alter the way in which we maintain records? How does compliance increase or decrease for small shops after the new codes have been implemented?

Changes for Small Factories

Will a small factory with eight employees need to make any changes after the new codes are launched?

Compliance with Labor Laws

Generally, compliance with labor laws requires the registration of the establishment, obtaining a license if required, maintenance of various registers and notices regarding the employees employed there, conspicuous exhibition of the notices or abstracts of the applicable Acts and Rules in the prescribed formats, if any, filing of periodical returns if required, payment of wages not less than the statutory minimum rates of wages, periodical deduction of the employee subscription, and onward remittance together with the employer's contribution to statutory social security schemes like ESI and EPF, if applicable.

Purpose and Objective of Codification

The purpose and objective of the codification of the existing 44 laws into four comprehensive Codes on Labor include the reduction in the multiplicity of laws, enhancement of uniformity in definitions, facilitating ease of compliance, and avoidance of frequent inspections by enforcement agencies. The rigor of compliance would certainly be reduced irrespective of the size of the establishments. It would be advisable for the poster to wait until the Rules are framed under the Codes and published to find answers to other questions.

Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988

The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988 was never implemented by enforcement agencies in letter and spirit, and employers were also not educated to maintain registers as required by the Act. It is applicable to Scheduled Acts. Now, scheduled Acts are covered under labour codes, so hopefully, this Act will remain in force along with the Code. Effective implementation by enforcement agencies as well as beneficiaries is crucial.