Statutory compliance checklist for manufacturing companies

One can argue that the manufacturing industry is at the heart of all industry. Statutory compliance in the manufacturing companies is crucial to the safety of its workers, the quality of the products and services delivered and to the reputation of the company itself.

The Government cares for employee welfare but also wants organisations to succeed. For this, the Government statutory schemes are those schemes that are instituted by the government to guarantee employee health and safety. These include the provisions made under enactments such as the Factories Act 1948, the Mines Act 1962 etc.

If you are a manufacturing company, then you must have a statutory compliance checklist in accordance with the Factories Act of 1948 amended in several amendments since then; one that you follow regularly and adhere to without exception. But what exactly is statutory or regulatory compliance in the manufacturing industry?

What is statutory compliance for manufacturing industry?

Statutory compliance in HR refers to the efforts made by a company to comply with labour laws and regulations set by the state and central governments. In the context of the manufacturing industry too, there is statutory compliance that companies must follow for the sake of employee welfare and to keep the brand reputation intact.

Read more:(Effective Statutory Compliance Strategies for HR in the Manufacturing Sector)

Major compliances for manufacturing companies

Let us discuss the key statutory and regulatory compliances that manufacturing companies in India need to follow.

1. The Companies Act, 2013: The Companies Act, 2013 is the primary law that governs the formation, management, and operation of companies in India. Manufacturing companies must comply with various provisions of the Act, including maintaining statutory registers, conducting annual general meetings, filing financial statements and annual returns, and appointing auditors.
   
   
2. Goods and Services Tax (GST): GST is a comprehensive indirect tax that replaced various indirect taxes in India. Manufacturing companies need to obtain a GST registration and comply with the rules regarding tax invoicing, filing of returns, and payment of taxes. Failure to comply with GST regulations can result in hefty penalties.
   
   
3. Income Tax Act: Manufacturing companies are also required to comply with the provisions of the Income Tax Act, which governs the taxation of income earned in India. Companies must maintain proper books of accounts, file income tax returns, and pay taxes on time. Non-compliance with the Income Tax Act can result in legal action and penalties.
   
   
4. Labour Laws: Manufacturing companies must comply with various labour laws, including the Industrial Disputes Act, Minimum Wages Act, Payment of Bonus Act, and Employees’ Provident Fund and Miscellaneous Provisions Act. These laws govern employment conditions such as working hours, minimum wages, social security benefits, and dispute resolution mechanisms.
   
   
5. Environmental Laws: Manufacturing companies must also comply with various environmental laws, including the Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981, and Hazardous Waste Management Rules, 2016. These laws require companies to obtain environmental clearances, comply with pollution control norms, and properly dispose of hazardous waste.
   
   
6. Intellectual Property Laws: Manufacturing companies must also comply with the provisions of intellectual property laws, including the Patents Act, Trademarks Act, and Copyright Act. These laws govern the protection of intellectual property rights and require companies to obtain necessary registrations and licenses for their products and services.
   
   
7. The Factory Actin India is a legislation that governs the functioning of factories in the country. The act lays down rules and regulations to ensure the safety, health, and welfare of workers employed in factories. Some of the important laws in the Factory Act in India are:

Registration and Licensing: The Factory Act mandates that all factories employing 10 or more workers using power or 20 or more workers without the use of power must register and obtain a license from the Chief Inspector of Factories.

Working Hours: The act lays down the maximum number of working hours per day and per week. It stipulates that no adult worker shall work for more than 9 hours per day or 48 hours per week. Overtime should be paid for any work done beyond these hours.

Health and Safety: The Factory Act mandates that factories must maintain adequate standards of sanitation and hygiene. It also requires factories to provide adequate ventilation, lighting, and drinking water facilities. The act also mandates the provision of safety measures like fire extinguishers, first aid kits, and protective gear for workers.

Welfare Provisions: The act mandates that factories must provide adequate welfare facilities like canteens, restrooms, and crèches for women workers.

Employment of Women and Children: The Factory Act prohibits the employment of children below the age of 14 years in any factory. It also lays down rules for the employment of women, stating that they should not be employed for work that requires them to stand for long hours, or that is hazardous to their health.

Leave Policy: The act stipulates that workers must be granted a minimum of one day off per week. It also lays down rules for the grant of annual leave and sick leave.

Inspections: The Factory Act provides for regular inspections of factories by government inspectors to ensure compliance with the rules and regulations laid down in the act. Inspectors have the power to issue directions to factories to rectify any non-compliance.

Statutory compliance checklist for manufacturing companies 

The legal statutory compliance checklist for manufacturing companies includes several points that companies must adhere to. Let us look at some of these points now.

Health:

1. Ensure factory floors, walls, vents, and fixtures are regularly cleaned and maintained to prevent disease spread.
2. Dispose of waste using proper methods; workers handling waste must wear gloves and safety gear.
3. Provide adequate ventilation and maintain appropriate temperature levels in the factory.
4. Avoid overcrowding to minimize hazards.
5. Ensure well-lit working areas to prevent accidents.
6. Provide sufficient drinking water, especially during summer months, to prevent dehydration.
7. Ensure easily accessible toilets and availability of first aid and medical facilities.

Safety:

1. Train personnel on safe machinery operation and conduct regular safety drills.
2. Maintain machinery to prevent hazards.
3. Prohibit tasks that pose significant health risks to workers.
4. Prevent leakage of hazardous gases and fumes.
5. Implement fire prevention measures in the factory.

Welfare:

1. Provide rest facilities for workers to relax during breaks.
2. Maintain a clean and hygienic canteen adjacent to the factory.
3. Have welfare officers to safeguard workers’ rights.

Work Hours:

1. Limit work hours to a maximum of 48 hours per week and 9 hours per day.
2. Ensure workers receive at least one day off after every 9 consecutive working days.
3. If weekly holidays are missed, provide compensatory leave within the same month.
4. Pay overtime wages as per statutory regulations.

Stay compliant with TalentPro’s specialized checklist for manufacturing companies. Streamline your operations and minimize legal risks effortlessly.