VOLUME:15 MARCH 2018 - Karma Management Consultants
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VOLUME:15 MARCH 2018
IN THIS EDITION
RECKONER FOR MARCH 2018 From theVOLUME:15
Director’s DeskMARCH 2018
Compliance
Payment of Stipend to Apprentices
on or before 10.03.18 - Realigning 'Wages' as Dened Across
Acts
Payroll
Submit PF on or before 15.03.18
- 5 Reasons Why You Need a Payroll
Software
Pay ESIC on or before 15.03.18
Human Resources
- How talent analytics is becoming
Pay PT on or before 31.03.18 key to HR growth
Karma Konnect
Humour
Keeping pace with the changes that are being
brought in to the world of HR and compliance
has been extremely exciting. There has been a
constant attempt at unifying, digitizing, easing
and integrating compliance in a manner that we
haven't seen before. While its implication and
understanding may take a while, the benets are
clearly here to change the way we manage the
function. In this edition we look to cover the
latest attempt at unifying wages and their
implications across Acts. We look to follow this
up with several other such endeavours in the
coming months.
Realigning 'Wages' as Dened Across Acts During a recently concluded meeting, the differing nature of denition of 'wages' was brought to light, with a proposal to standardise the same. While worker representatives of the board pushed for an immediate review, the ASSOCHAM showed concern. Here is what was proposed as a possible amendment. A ten-day window has been granted before its possible effect. We bring you the context and coverage. Denition of wages across Acts: - Of the 40 Central Acts, the term 'wages' has been dened in 19 Acts - Separate denitions have been provided in 12 of the 19 mentioned Acts - Each of these denitions mandate certain inclusions and exclusions that bear impact on the respective Act Intent of review - To attempt to standardize the denition of wages as far as possible so as to make it uniform - Ensure implication of each denition is understood and objectives are not hampered in standardizing the denition - The unied denition be able to create a balance between needs of employers and employees alike, and maintain objectives of legislation simultaneously Observations Across Acts: Based on a study of wages across Acts, it has been observed that: - All Acts use Basic and DA as components - Implications of components is critical in certain Acts like Payment of Bonus where wage ceiling would increase to Rs. 21,000 per month owing to inclusions as a result of standardization. This would make employees not eligible for bonus. In such cases, a separate denition is warranted. - Inclusions and exclusions also have repercussions on EPF, ESIC, Maternity, Workmen's Compensation and Gratuity Acts. Common Inclusions in most Acts: - Basic - DA - HRA - Any additional remuneration by any name Common exclusions: - Bonus as per Payment of Bonus Act - Any social security payments - TA - Special expenses - Gratuity - Termination benet and retrenchment compensation - Value of house accommodation and other facilities like light, water etc. Considerations: Based on various observations and implications, there are certain recommendations proposed to standardising the denition of wages, which are: - Providing 2 sets of defini ons. One would cover Payment of Gratuity, Employees' Provident Fund and Employees State Insurance Acts, and one that covers the rest. The defini on in Gratuity, EPF and ESIC would have just 2 or 3 inclusions and the other would have a larger number of inclusions and common exclusions - A cap of 50 percent to be provided in both defini ons to avoid diversion of propor on of wages towards allowances - Providing a ceiling for 'kind payments', to ensure employees are not underpaid as a result, and that mandatory obliga ons like EPF contribu ons are met.
- In the latest amendment to the Maharashtra Apprentice Act, changes were brought to its application in the
following areas –period of apprentice training, termination of the apprenticeship contract, number of apprentices
permitted for a designated trade, payment, conduction of tests, and granting of certicates. You may view the
ofcial notication at http://comply4hr.com/noti/2016/AA2018Feb9.pdf
- According to the latest changes made to the EDLIS Scheme, in cases where the assurance benet is not less
than 2.5 lacs and not over 6 lacs, the calculation of the benet has been re-explained. View the complete
notication at http://comply4hr.com/noti/2016/EDLIS2018Feb15.pdf
- While introducing online payment facilities for registration and licence, the Tamil Nadu government further makes
changes to the Contract Labour Regulation Rules, by increasing fees toward registration, renewal and
modication, and also by increasing the validity for a period of two years from the year in which licence is
granted. The ofcial notication is available at http://comply4hr.com/noti/2016/TNCLR2018Jan25.pdf
- Through the EPF Scheme, the Central Government now makes it mandatory for claim settlements that are over
10 lacs(PF) and over 5 lacs(EPS) to be accepted only online. Claims of such nature and above this limit must
not be accepted in physical form. This is to ensure time is saved and settlements are error free. The notication
is available at http://comply4hr.com/noti/2016/EPFS2018Feb27.pdf
- In keeping with digitization and ease in compliance, the Tamil Nadu government brings changes to the Factories
Rules, whereby compliance facilities are available online for site approval, grant of licence, application for
extension in construction, registration and amendment of licence, and ling of annual and half early returns.
Moreover, it also extends registration and renewal to 10 years from the previous 5 years. Form 22 has also been
amended. View the ofcial notication at http://comply4hr.com/noti/2016/TNFR2018Feb14.pdf
5 Reasons Why You Need a Payroll Software Small businesses are everywhere and the competition is higher than ever. One of the ways to organizational success is to be able to hire and most importantly, retain the most talented employees. If this is to be achieved, every small detail to employee satisfaction needs to be paid attention to. Investing in the right payroll software can help organisations achieve this to quite an extent. The way SME's handle their human resources is not very productive as people are always hired to do the job. Very little or no attention is paid to the potential of human error and its negative effects on employees and the organization as a whole. This is why a comprehensive HR and payroll software is a best bet as an SME as it comes with a host of advantages that ensure efciency, timeliness, accuracy, precision and cost effectiveness. Payroll gets automated as well as seamlessly integrated with attendance and time management, allowing HR to focus on core business issue and not always be stuck with administrative work. Why SME's desperately need a payroll software 1. Efcient usage of time Small businesses spend way too much time doing payroll every month. This is also accompanied with the hustle that comes with endless hours, days and months spent on year end tax preparations. Using an HR and payroll software automates all these processes, and also eliminates the probability of error in calculations. Countless number of hours gets saved, which can let people in HR as well as Finance focus on other critical tasks which require their immediate attention. The vicious circle of commitment to payroll ends as it gets replaced by a few clicks.
2. No more errors Manual processing is bound to create errors which can lead to miscalculation in taxes, ignoring taxable items, feeding forms with incorrect information and much more. And these errors come at a huge cost! Hence, an HR and payroll software becomes all the more critical as it helps organisations avoid these mistakes. Such software companies also keep updating their systems to stay on top of federal and state requirements. 3. Customisation to t your business needs A payroll software is exible to take into account the way your organisation functions. Whether you run payroll weekly or monthly, what are the compensations structures for various roles, benets, bonuses, all of this can be customised and tailored to suit unique needs of organisations. This drastically reduces effort on admin side to keep ensuring constantly that all requirements are being adhered to. 4. Employee portals A payroll software gives anytime anywhere access to employees where they can view their own pay and benets records at the click of a button. Such a portal can improve employee morale as the access is uninterrupted and also promotes a culture of transparency. All key information related to the employee including critical documents can also be stored online. This lets them have a greater control over their work lives and also saves time of employers, who can also easily access this data. 5. Easy integration and access A payroll software also comes with integration options, which can allow employers to give login access to employees, HR, syncing options with attendance or time tracking etc. Whatever the demands be, software integration and features in a payroll software an let you collaborate with other people in a way that lowers the pressure on administrative work and makes processes more smooth and streamlined.
How talent analytics is becoming key to HR growth The digital revolution is redening the workplace, skills requirement and the employer-employee relationship in a more fundamental way than ever before. Organizations are increasingly recognizing the value of big data and data analysis in predicting and dealing with constant change. As a function, human resources (HR) too is gradually moving away from making gut decisions to more evidence- based decision making. But how effectively is HR leveraging talent analytics for taking informed people-related decisions? Talent analytics and workforce planning Talent analytics is a science, which focuses on the current/historical state of the workforce in the organization. It is a cross-sectional representation of how many people work for you, who are your best performers, which departments are functioning most effectively and leverage this current/historical state of workforce to address deeper HR issues taking a predictive view on issues like predicting and controlling attrition, (and) predicting good quality hires in the organization, thus improving effectiveness in recruitment. On the other hand, workforce planning (WFP) looks at the current and the future headcount requirements in terms of both capacity and capability, required to meet an organization's current and future business plans. Workforce plans look at external and internal factors inuencing the need for the number of people and the skill set required by the organization into the future. The state of talent analytics Companies have been leveraging customer data to increase their top line and bottom line but people analytics is the new kid on the block. Organizations that have been able to leverage people data have been able to tangibly add value to their stakeholders, their employees and management, and this is the one single thing that gets the chief human resources ofcer (CHRO) a seat in the boardroom where he can factually present ndings on the people and talk about how he can improve performance by improving people quality. Another key nding is that only a small percentage of companies use predictive/prescriptive analytics, while a huge majority of companies are still stuck with using traditional reporting methods like dashboards or spreadsheets for HR analytics. We see a lot of analytics today is very dashboard-based but if companies start using predictive analytics, then they will be able to use the data from an employee's perspective and be able to make targeted interventions to an individual, rather than a group which is currently happening. In terms of adoption rate, talent analytics has a higher comparative adoption among CHROs, but the true value of HR analytics can only be realized with increased usage among CEOs (chief executive ofcers) and COOs (chief operating ofcers). However, the study claims that the focus and investments around talent analytics is set to increase in India. Eighty- seven percent of companies will increase investments or maintain their investments in talent analytics. Additionally, organizations plan a series of measures to improve the effectiveness of HR analytics within their organizations. Two key focus areas of investments for organizations in talent analytics will be technology and people/competence.
The state of workforce planning While many organizations do resource, headcount and strategic planning, they do not have a strategic view of their workforce plans as they tend to focus on the short term. Most of the organizations have less than a 12-month view of the workforce plans, a small number of organizations have a 2-3 years' view of the workforce plans and only a handful of organizations have a 3-5 years view of their workforce plans.” Similar to talent analytics, majority of the organizations still use spreadsheets to do workforce planning while only a small section of organizations use dedicated WFP solutions to conduct this activity. Most organizations review their workforce plans on an annual basis, a quarter of organizations review their plans on a quarterly basis and only few organizations review their workforce plans on a monthly basis. Only some of the organizations are leveraging the outputs from the workforce plans to allocate actions to the talent acquisition or the learning and development. While the need for estimating the future workforce requirements is the key driver within organizations to do workforce planning, rising cost of workforce and workforce optimization is high among the key drivers for doing workforce planning in organizations.
In the next of
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recruitment
series, you will
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postal system
worksThe new year brings in colour, hope and festivity at the Karma
ofce. We bring you glimpses of Holi celebrations that were
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