Labor Laws that every HR professional should be aware of

Updated: 9 months ago
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“Human resources are like natural resources; they’re often buried deep. You have to go looking for them, they’re not just lying around on the surface. You have to create the circumstances where they show themselves.”? Ken Robinson

An HR manager is a person who needs to manage every step of the organization. If he/ she takes any wrong decision, it can lead to a very difficult situation for the company in the future. When a person joins a company, the HR manager needs to take care of the labor laws of the country as well as the employee who is joining should know their rights regarding joining and working in an organization.

An HR manager is an employee of an organization who helps it in achieving its business Goals avoiding any type of indistinct decisions, circumstances that may act as a stumbling obstruct to the company. Without having proper knowledge of basic labor laws, an HR manager can put the company he is working for in legal trouble. Let’s start discussing the basic labor laws that every company is required and expected to fall into in order to keep the basic workings of the company smoothly and legally.

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To keep things simpler, let’s discuss the labor laws that need to be considered in routine tasks that we can discuss in three parts:

  • Recruitment
  • Holidays and Leave Policies
  • Statutory Compliance
  • Other Rules and Regulations


Though there is no specific labor law in terms of the recruitment except that a private company establishment having 25 or more employees need to inform about the vacancy to the specific employment exchanges which generally got ignored by the companies in order to save time.

However, the companies are required to do background verification while hiring a person for the organization. This is not a mandatory part as per the labor law, but should be considered very important and check the below points while doing the reference/ background checks:

  • Check if the potential employee is having any criminal record or not. This can typically be done at the police station under the police verification of the employee.
  • Check for the medical history of the employee. The companies are not allowed to dismiss anyone’s employment basis their medical condition, however, it is their right to know if an employee is suffering from any disease that may affect their productivity.
  • Along with the medical screening, Indian law doesn’t ban any type of drug screening as well.
  • In case you are hiring any foreigner for a job in your office in India, the company can check their immigration status. If they have an employment visa to work in your country and trying to switch jobs, he. She needs to go back to the base country, get a fresh visa, and come back to India to join the new company.

Statutory Compliance

Another important aspect for any HR manager to work as per the labor law of India is to take care of the statutory compliances like:

  • Applicability of Act- as to whom it is applicable Factory / Shop and establishment, to workmen, employer, employee.
  • Registration.
  • Renewal of Registration.
  • Definitions – As every single word may be interpreted by law can be in a different way in respect to whatever may common men interpret. This is the most vital part of starting with the compliance part.
  • Various Govt. Fees
  • Maintaining of Registers/Muster roles.
  • Display
  • Penalty etc.

Holidays and Leave policies

According to the Indian Labor Law, an employee is entitled to various types of leaves that they need to abide to like:

  • National Holidays
  • Weekly Offs
  • Maternity leaves
  • Sick leave
  • Casual leave
  • Earned leaves
  • Compensatory Leaves

Other Rules and Regulations

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An HR manager needs to look after some activities on a monthly or periodic basis in order to keep things going legally correct.·        

  • Licensing and Registration under various Labor Laws
  • Attendance of Periodical Statutory inspections held by the Govt. Officials whenever required
  • Preparation and Submission of Periodical Statutory Reports
  • Factories Act
  • ESI Act
  • PF & Misc Provision Act
  • Maternity Benefit Act
  • Contract Labor Regulation and Abolition Act
  • Minimum Wages Act
  • Bonus Act
  • Shop and Establishment Act
  • Professional Tax Act
  • Labor Welfare Fund
  • Payment of Wages Act
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