Corporate Compliance Playbook

HR Policy & Payroll Audit Checklist

Stop relying on generalised advice. This statute-aligned, step-by-step audit matches exact thresholds and section numbers under the 4 New Codes.

Audit Progress

Check each operational task to assess your transition compliance level.

Compliance Zone 1 Code on Wages, 2019

Payroll & Compensation Structures

Under Section 2(y), wages are restructured to include Basic Pay, DA, and Retaining Allowance, while capping all other exclusions at 50% of total CTC.

Enforce 50% Wage Floor [Sec. 2(y)] Ensure Basic Salary + DA comprises at least 50% of the total monthly CTC. Audit HRA, Special Allowance, and Travel Allowance ratios.

Recalculate PF Contribution Wage Base [Sec. 2(y)(A)] Adjust monthly employer PF contribution ceilings. If allowances exceed 50%, the excess must be added back to the PF calculation base.

Restructure Overtime Rates [Sec. 14] Align overtime calculations to ensure payouts are calculated at exactly twice (2x) the standard wage rate for work exceeding 8 hours a day or 48 hours a week.

Compliance Zone 2 Social Security Code, 2020

Employee Separation & Gratuity Rules

Sections 17 and 53 fundamentally accelerate cash-flow obligations during employee exits, specifically impacting contract staff.

Configure 2-Day Full & Final (F&F) Settlement [Code on Wages — Sec. 17] Update standard exit policies and coordinate with payroll software vendors to clear all final payouts and statutory dues within 48 hours of an employee's final working day.

Modify Gratuity for Fixed-Term Employees (FTE) [Sec. 53] Set gratuity eligibility for fixed-term contracts on a pro-rata basis to trigger after exactly 1 year of continuous service instead of the previous 5-year floor.

Compliance Zone 3 OSH Code, 2020

Welfare, Safety & Leave Management

Section 32 and Section 43 standardize annual leave accrual limits and establish workplace protections for female night shift workers.

Enforce 30-Day Leave Carry-Forward Cap [Sec. 32] Cap carry-forward balances for earned/annual leave at exactly 30 days. Note the eligibility threshold to earn this leave is now 180 days worked in a year (reduced from 240). Establish automatic end-of-year payroll cash-outs for any surplus balances.

Deploy Women Night Shift Security Protocols [Sec. 43] Deploy secure corporate transport, female guards, and CCTV systems, and secure formal written consent for any female staff working shifts between 7 PM and 6 AM.

Implement Unified Business Registration [Sec. 3] Consolidate legacy state-level Shop & Establishment licenses, Factory licenses, and Contract Labour certificates into a single unified electronic registration.

Compliance Zone 4 IR Code, 2020

Disciplinary Standing Orders & Retrenchment

Industrial relations thresholds have changed, shifting standing order exemptions and adding retraining liabilities during layoffs.

Transition Standing Orders Floor [Sec. 35] If headcount is below 300, transition your company policies out of the mandatory Model Standing Orders framework (raised from the legacy 100-worker threshold).

Accrue for Worker Re-skilling Fund [Sec. 54] Budget 15 days of salary for retrenched workers. This must be remitted directly to the government's worker re-skilling fund within 45 days of separation.

Revise Collective Bargaining & Strike Notice Protocols [Sec. 62] Strikes now require 60 days advance written notice across all industries (previously only public utility sectors), and may only take place within the 14-day window specified in that notice.

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