Statutory Compliance Interview Questions

 Question 1. What Is Pf Year?

Answer :

PF accounting is done from March to February of every year. This period is called as PF
Year. This is applicable only to PF and does not have any effect in any other modules.

 Question 2. Does Every Employee Contribute To Pf?

Answer :

According to the PF rules (as of 2004), all employees who draw a PF Basic of less than Rs.
15000 have to contribute to PF. This is mandatory. For employees having PF Basic more than
Rs. 15000, the deduction/contribution will be on 15000. However in most companies, PF is
applicable to all employees. There are exceptions (people who do not contribute) but these
are few.

 Question 3. What Is Pf Basic Or Pf Gross?

Answer :

This is the amount on which the PF contribution or deduction is calculated. Generally in 95%
of the companies this is Basic + Basic Arrears + DA + DA Arrears. However, there are
always exceptions and some companies want it to be a little different. In that case, we can
change the PF Basic formula to cater to the client's requirements.

 Question 4. What Are The Various Reports Associated With Pf?

Answer :

 PF Monthly report: This is a report that needs to be generated every month and it
contains the details of Employee PF, Employer PF, VPF, and PF Basic for the
employee. Based the numbers appearing in this report, the company needs to make
payments to the government every month.
 PF - Form 5: This is a monthly report giving a list of all employees who have joined
the company in the current month. Based on an option setting, this report can also
indicate all the employees whose payroll has been processed for the first time in this
month.
 PF - Form 10: This is a monthly report giving a list of all employees who have
left/resigned the company in the current month. Based on an option setting, this report
can also indicate all the employees whose PF has been settled in this month.
 PF - Form 12A: This is a monthly report giving a summary of the number of
employees currently covered under PF, total contribution for the month, and other
details.
 PF - Form 3A: This is a monthly report giving a summary of all the PF deductions
(employee and employer) done for the employee in a given PF Year.
  PF - Form 6A: This is a monthly report giving a summary of Form 3A per employee.
This report gives the total deductions done for each employee in a given PF Year.

 Question 5. What Are The Various Options For Pf Form 10?

Answer :

Form 10 can be generated based on either Leaving Date or Settlement Date. This can be set in
the General Options. The option name is USE_SETTLEDATE_IN_FORM10. If you set this
option to YES then the Form 10 report will list all employees who are settled in the given
date range. Otherwise, it will pick up all employees who have resigned in the given date
range.

 Question 6. What Is The Link Between Pf And Income Tax?

Answer :

As per Indian Tax laws, any contribution done by the employee towards PF can be
considered for Section 88 rebate.

In Folklore, any deduction done for PF and VPF is automatically considered for Section 88
rebate in the Income Tax module.

 Question 7. What Are The Various Esi Reports?

Answer :

ESI Monthly report: this report is generated monthly. This gives the total
deductions/contribution (employee and employer) done for each employee for a month.

ESI Form 6: this is a half yearly report.

ESI Form 7: this is also a half yearly report.

 Question 8. What Are The Other Rules Governing Esi?

Answer :

ESI contribution stops when the employee's gross income crosses Rs. 15000/- (up to May
2010 this was 10000)

 This stoppage of ESI cannot happen in any month. The change over from ESI
deduction to No ESI deduction can happen only in 3rd (March) or 9th (September)
month i.e. even if an employee's salary crosses, 10000 in July, the ESI deduction will
continue until August.
 In the September payroll, the employee's ESI deduction will be zero (as has crossed
Rs. 10000/-).
 The comparison of income is done with Full Income and the calculation of ESI is
done on the actual payout (income).
 Question 9. An Employee Has Esi Deduction But Is Not Appearing In The Esi Report.
What Could Be The Issue?

Answer :

ESI report considers a field called ESI Eligibility. An employee name will display in the ESI
report only if marked as ESI Eligible in employee information.

Verify if PF Eligible and ESI Eligible are selected in the Employee Information page of your
application.

 Question 10. What Is Esi Rules?

Answer :

ESI. Scheme being contributory in nature, all the employees in the factories or establishments
to which the Act applies shall be insured in a manner provided by the Act. The contribution
payable to the Corporation in respect of an employee shall comprise of employer’s
contribution and employee’s contribution at a specified rate. The rates are revised from time
to time. Currently, the employee’s contribution rate (w.e.f. 1.1.97) is 1.75% of the wages and
that of employer’s is 4.75% of the wages paid/payable in respect of the employees in every
wage period. Employees in receipt of a daily average wage up to Rs.70/- are exempted from
payment of contribution. Employers will however contribute their own share in respect of
these employees.

 Question 11. What Are The Rates For Contribution (deduction) To Esi?

Answer :

For employees, ESI deduction rate is 1.75% of the ESI Gross salary.

For employer, ESI contribution is at the rate of 4.75% of the ESI gross salary.

 Question 12. What Is Esi Gross Salary?

Answer :

Generally, all the income components paid to an employee is considered for ESI Gross
computation. In Folklore, ESI Gross is defined by the user. User indicates which income
components are to be considered for ESI Gross.

 Question 13. How To Do Pf Process For My Existing Employees Using Greythr On A

Monthly Basis?

Answer :

1. Payroll → Process Payroll → Quick process (Your payroll will be processed here)
2. Go to Reports → Search for ECR → Select ‘PF - ECR Format’ Report from the
search result → then, Select ‘Regular’ as a type → Click generate ECR file
 3. Then a text file is downloaded on your system, PF admin user should login to PF
Unified Portal and upload the generated ECR text file from greytHR

 Question 14. How To Do Pf Process For Resigned Employees Using Greythr?

Answer :

1. Under Employee tab → Information → Separation → Select the employee and

furnish the resignation details (tentative relieving date etc.,)
2. Once employee has left the organisation (after serving his notice period) do the
following:
Payroll → Payroll Inputs → Final settlement → Select the employee → Finish the
settlement process
3. Payroll → Process Payroll → Quick process (Your payroll will be processed here)
4. Go to Reports → Search for ECR → Select ‘PF - ECR Format’ Report from the
search result → then, ‘Exit Employees’ as a type → Click generate ECR
file
Then a text file is downloaded on your system, PF admin user should login to PF
Unified Portal and upload the generated ECR text file from greytHR

 Question 15. Where To Enter The Uan Number In Greythr?

Answer :

Under Employee → Information → PF Details add all the details

Payroll → Process Payroll → Quick process (Your payroll will be processed here)

Go to Reports → Search for ECR → Select ‘PF - ECR Format’ Report from the search result
→ then, ‘New Joinees’ as a type → Click generate ECR file

Then a text file is downloaded on your system, PF admin user should login to PF Unified
Portal and upload the generated ECR text file from greytHR

 Question 16. How To Do Pf - Process For A New Entrant To Your Organisation Who
Has Never Been Previously A Contributing Member Of Pf Using Greythr:?

Answer :

Login to greytHR → go to Actions tab → Select the ‘Add employee link’ → Enroll an
employee into greytHR by filling in all his necessary details, under the PF section - enable
‘Eligible for PF’ (Select ‘Regular PF Contribution (Max 1800)’ (or) ‘Excess PF Contribution
(Above 1800)’)

Once you click ‘finish’ after enrolling an employee, on the same screen under related action
select ‘Add Salary’

Enter only the Annual CTC of the employee (System will automatically do the component
wise salary breakup)
PF Admin user needs to login to → Unified PF Portal with relevant KYC for the new
member → Upload them and generate UAN

Enter the generated UAN number and the PF number in greytHR

 Question 17. What If Family Pension Fund Or Fpf Or Employee Pension Scheme Or
Eps?

Answer :

The contribution made by an employer towards PF is split into contribution towards PF and
contribution to another scheme called Pension Scheme.

 Question 18. I Have An Error While Exporting Form 3a - (form 3a) To Edi Format.
What Do I Verify?

Answer :

Verify if the ODBC driver for PHP is installed on the PC, where the export is happening.
This is needed as the EDI file is generated in DBF format.

Hr Generalist Interview Questions & Answers

 Question 1. What Exactly Profile Of Hr Generalist Defines? Or What Do You

Understand From The Profile Of Hr Generalist?

Answer :

Generalist profile includes taking part in policy making & implementation, Payroll mgmt,
performance appraisals, taking interviews and scaling candidates as per organization’s
criteria, IJP, handling recruitments (Making Job descriptions), exit formalities, Preparing
offer letters, and pay slips, Co-ordination amongst different HOD for their requirements etc.

 Question 2. What Do You Mean By An Organization’s Retrenchment And

Retrenchment Strategies?

Answer :

Retrenchment is a corporate-level strategy that seeks to reduce the size or diversity of an

organization's operations. Retrenchment is also a reduction of expenditures in order to
become financially stable. Retrenchment is a pullback or a withdrawal from offering some
current products or serving some markets. Retrenchment is often a strategy employed prior to
or as part of a Turnaround strategy.

 Question 3. What Is 360 Degree Performance Appraisal?

Answer :

This system, which solicits feedback from seniors (including the boss), peers and
subordinates, has been increasingly embraced as the best of all available methods for
collecting performance feedback. Gone are the days of working hard to impress only one
person, now the opinions of all matter, especially if you are in a leadership role(at any level).
Every person in the team is responsible for giving relevant, positive and constructive
feedback. Such systems also help in identifying leaders for higher level positions in the
organization. Senior managers could use this feed back for self development.

 Question 4. Why Is It Important For Personnel Management To Know The Reasons

For Staff Leaving The Organization?

Answer :

It helps to find the gaps between management and employees. It helps the personnel
management to analyze problem why staffs are leaving from the job .what important factors
are they looking after and how to fill the gap between management and employees and
moreover it is very helpful to stop loosing employees from the company. The average time-to
profit-time period for a new hire in any industry is about nine months, suggesting that a
fresher begins to break-even the investments made on him/her and earn profit for the firm
only after nine months. Exit of an employee before the nine month period can cost up to five
times of his or her paid salary.

HR managers need to be proactive and develop innovative employee interventions to

retain talent. Some suggestions are:

1. Quality of supervision
2. Perception of equity in rewards-both monetary and non-monetary.
3. Scope for the employee to speak out freely.
4. Meeting's at least a month, to share the company's vision, industry's growth and how
employees see themselves in the changing scenario help a great deal.
5. Salary hike.
6. Exit interviews etc.

 Question 5. What Are Some Of The Forms Of Sexual Harassment?

Answer :

Visual, verbal, physical, hostile work environment.

 Question 6. What Are The Steps In Processing A Suspension Or Termination Of An

Employee?

Answer :

The process for suspension or termination is as follows:

1. You must give written notice for the same (it can be called as termination letter). In
this you have to mention the reason for termination e.g.: non performance,
compliance issues, etc.
2. You must see that the pay out for the notice period is in accordance with the balance
leave of the employee
3. The termination letter must be signed and accepted by the employee
 4. Once these things are done then you have to do the normal exit formalities.

For terminating any employee you have to mention the valid reason and the employee must
be given the equal chance to justify it. The management is liable for this and employee has
the right for this. This is the main point you must keep in mind while any termination. If this
is not followed, then the employee have the right to go to court for the same.

 Question 7. What Are The Benefits Of Progressive Discipline?

Answer :

Progressive discipline is an employee disciplinary system that provides a graduated range of

responses to employee performance or conduct problems. Disciplinary measures range from
mild to severe, depending on the nature and frequency of the problem. For example, an
informal coaching session might be appropriate for an employee who is tardy or violates a
minor work rule, while a more serious intervention -- or even termination -- might be called
for if an employee commits serious misconduct or doesn't improve a performance problem
after receiving several opportunities to do so.

Most large companies use some form of progressive discipline, although they don't
necessarily call it by that name. Whether they are referred to as positive discipline programs,
performance improvement plans, corrective action procedures, or some other title, these
systems are all similar at their core, although they might vary in the details. All are based on
the principle that the company's disciplinary response should be appropriate and
proportionate to the employee's conduct.

The Benefits of Progressive Discipline:

Using progressive discipline can help you get employees back on track. Done right,
progressive discipline can:

 allow managers to intervene and correct employee behavior at the first sign of trouble
 enhance communication between managers and employees
 help managers achieve higher performance and productivity from their employees
 improve employee morale and retention by demonstrating that there are rewards for
good performance and consequences for poor performance
 avoid expensive replacement costs
 ensure consistency and fairness in dealing with employee problems, and
 lay the groundwork for fair, legally defensible employment termination for employees
who cannot or will not improve.

Progressive discipline also helps you avoid the consequences of allowing workplace
problems to continue unchecked. If you don't intervene, the employee may not know that his
or her behavior or actions are unacceptable. Not only will you have lost an opportunity to
help the employee improve, but your company will continue to suffer the consequences of the
employee's problem, which could result in reduced productivity and profits, quality control
problems, lost opportunities or customers, low employee morale, and high turnover.

Using progressive discipline appropriately will also help your company stay out of legal
trouble. Progressive discipline requires you to let employees know what you expect, to be
fair, consistent, and objective in imposing discipline, to include employees in the process of
improvement, and to document your actions and decisions properly. By following these
actions, you'll ensure that employees who are unable to unwilling to improve won't have the
legal ammunition to fuel a lawsuit. And, if you are consistently respectful to employees, few
of them will be motivated to sue.

Getting Results With Progressive Discipline:

A progressive discipline system or policy provides a basic framework for handling employee
problems fairly and consistently, but it's only a start. To get the best results from progressive
discipline, you can't just move mechanically from one disciplinary measure to the next, until
it's time to fire the employee. Instead, you must involve the employee in the process. The
employee's engagement in improving his or her performance, behavior, or attitude will
ultimately determine whether progressive discipline is successful.Grievances.

 Question 8. Describe The Grievance Process?

Answer :

 Grievance process is one of the vital areas in building employee confidence and
building the relationship. There should be a definite grievance procedure. The
grievances have to be attended within the time limit. When the grievance is not able to
solve within the prescribed time limit , the concern persons has to called up and
informed about the action taken so far and the reason for delay in arriving at the
solution and expected
 time required to achieve the target.
 Unique no to be allotted for each and every grievance and possibly it has to be
classified according to the merit of the issue.
 By classification, you could able to identify the nature of grievances (over a period of
time) which will be very useful in streamlining the Grievance procedure.Employee
participation and suggestions to be appreciated to make the grievances procedure to
be more effective.

 Question 9. What Is The Relationship Between Motivation And Reward?

Answer :

Motivation in simple words may be understood as the set of forces that cause people to
behave in certain ways. It is a process that starts with a physiological deficiency or need that
activities behaviour or a drive that is aimed at a goal or an incentive.
The concept of motivation occupies a central place in the discipline of Organizational
Behaviour. It is a concept, which has received the maximum attention from the academicians
and researchers alike. Since a motivated employee is highly productive and highly quality
oriented, the managers are also interested the concept of motivation.
Most people understand the concept of intrinsic satisfaction or intrinsic motivation, i.e. when
an activity is satisfying or pleasurable in and of itself. Naturally, these activities are things we
like and want to do. For most of us, intrinsically enjoyable activities are things like eating,
resting, laughing, playing games, winning, creating, seeing and hearing beautiful things and
people, being held lovingly, having sex, and so on. To do these things we don't need to be
paid, applauded, cheered, thanked, respected, or anything--commonly we do them for the
good feelings we automatically and naturally get from the activity. Intrinsic rewards also
involve pleasurable internal feelings or thoughts, like feeling proud or having a sense of
mastery following studying hard and succeeding in a class.
Many, maybe most, activities are not intrinsically satisfying enough to get most of us to do
them consistently, so extrinsic motivation needs to be applied in the form of rewards (positive
reinforcements), incentives, or as a way to avoid some unpleasant condition ("negative
reinforcement" or punishment). Examples: You work doing an ordinary job for pay. You
study for good grades or to avoid failing or to prepare for a good future. You do housework
to get a clean, organized house and/or a spouse's appreciation or to avoid her/his disapproval.
A teenager comes home from a date on time in order to avoid being grounded. These are all
activities that are commonly sustained by external pay offs, not because you love working,
studying, cleaning, and coming home early.

 Question 10. What Is A Grievance?

Answer :

A grievance in the traditional sense of the word is typically defined as a complaint against an
employer by an employee for a contractual violation. Simply put, this means that an
employee has a problem with his/her employer and feels the problem is legitmate based on
the contract he/she has with the employer. However, not all grievances have to be
contractual grievances. Typically, labor unions have a grievance procedure by which they
follow and the process of tracking that grievance can take many forms.

1. The employee usually files the grievance with a shop steward, grievance rep, or
union/management official.
2. The grievance rep typically fills out a pre-defined grievance form and submits it to
the union for processing.
3. The union typically files the grievance and all relevant hard copy documents into a
filing cabinet or electronic database, like the IGS.
4. The grievance rep and the labor union officials are responsible for keeping track of
the grievance meeting steps 1-Arbitration.
5. The meeting steps are usually defined in the contract between union and management
and typically have timelines that must me met between each step.

Both union and management are responsible for keeping track of the grievance and also
abiding by the contractual language that accompanies that grievance. Grievances can be filed
on behalf of the entire union or on behalf of indivual members/employees.

Performance Appraisal Interview Questions

 Question 1. What Are The Objectives Of Performance Appraisal System?

Answer :

The main objectives of a performance appraisal system are:

1. To increases the employee effectiveness by helping them understand their role better.
2. To help the employees understand their strengths and weakness in the current role.
3. To help the managers in identifying the training needs of their subordinates.
 4. To improve the relationship between the line manager and his team members by
making them realize that they are dependent on each other for better performance.
5. To help the line managers and their team members in improving the communication
by discussing the problem in achieving the targets and finding the potential solutions.
6. To provide the employee an opportunity for self evaluation and self development
which are important to achieve the goals.
7. To prepare the employees for higher roles.
8. To create a positive work atmosphere.
9. To collect the information about each employee through personal meeting which is
useful in making managerial decisions.

 Question 2. Why Do Performance Appraisal Systems Fail?

Answer :

Many a times the performance appraisal system tries to assess the personality traits of its
employees through their line manager.

There are two types of problems in this:

 The employees do not open up as they do not want any negative personality trait to be
recorded in official records.
 The line managers are not fully trained and capable of assessing the personality traits
of employees.

 Question 3. What Do You Know About Following Appraisal Systems?

Answer :

Graphic Rating Scales:

 This method is also called as linear rating scales or simple rating scales method
 Judgement about the performance are recorded on a scale
 The appraisers are given the forms which carries the various criteria on which the
employees are to be rated
 It is a simple and quick method, which makes it popular

Ranking method:

 The employees are rated from best to worst on some characteristics

 The rater chooses the best and the worst employees from a group and rates them.
 He then chooses the second best and worst set and goes on
 The reliability and validity of this method is under doubt as it may suffer from rater’s
bias, fluctuating performances or varying standards.

Paired comparison method:

 Under this method each employee is rated against all the members in the group.
 It could be fairly applied where the number of employees are less.
 This method is time consuming.
  The performance is compared to other employees rather than specific job criteria

Forced distribution method:

 This method is developed to prevent the raters from rating too high or too low.
 In this method, the raters are required to spread their employee evaluations in a
prescribed distribution.
 It eliminates central tendency and leniency biases.

 Question 4. What Are The Main Phases Of A 360 Degree Appraisal System?

Answer :

Following are the main phases of a 360 degree appraisal system:

1. Orientation – Information about the importance and details of the process is passed on
to the participants.
2. Questionnaire distribution
3. Monitoring and follow up
4. Data feeding and report generation
5. Conducting the workshop
6. Counselling of employees

 Question 5. What Are The Pre-requisites Of A 360 Degree Appraisal System?

Answer :

The main pre-requisites of a 360 degree appraisal system are:

1. Commitment from the top management to continuously develop the competencies of

the employees
2. Proper implementation of various HR systems
3. Willingness of the management to let the employees learn from each other and their
own mistakes.
4. Willingness of the management to spend time in providing feedback to their sub-
ordinates
5. Willingness of the management to accept the feedback from their sub-ordinates and
peers.
6. Not too many status barriers and ego issues
7. Openness of the people to accept feedback and use it for development
8. Feedback is not used for political advantage
9. Emphasis on teamwork in the organization
10. HR department is highly credible
11. High degree of process orientation in the organization
12. High value to the values in the organization
13. Emphasis on building competencies

 Question 6. What Can You Aim To Achieve Through 360 Degree Performance
Appraisal System?
Answer :

We can aim to achieve the following through 360 degree performance appraisal system:

1. Information about the strengths and weaknesses of an employee in a particular role

2. Identification of training and development needs to perform better in the current role
and prepare for the higher role.
3. Collect data as an objective basis for rewards and other decisions
4. Basis for performance based pay or awards
5. Aligning individual and organizational goals

 Question 7. What Are The Important Components Of A Performance Appraisal

System Format?

Answer :

The important components of a comprehensive performance appraisal system format

are:

1. Identification of KPIs and target setting – periodically through a discussion between

the employee and his line manger
2. Identification of personal qualities required for the current and higher roles and
developing them
3. Self appraisal – by the appraisee
4. Identification of factors which have helped and hindered in achieving the set goals.
5. Discussion about the performance and counselling of the appraisee by the appraiser
6. Identification of training needs for current and higher role.
7. Setting up the goals and plan of action
8. Assessment by the superior – training and development needs, any rewards or
punishments.

 Question 8. What Are Kpis?

Answer :

KPI – Key performance indices, as the name suggests is a list of parameters against which the
performance of an employee is measured. These indices are usually quantifiable in nature.

 Question 9. What Are Major Criteria To Assess The Performance Of Employees?

Answer :

The major criteria to assess the performance of employees are:

1. Job Knowledge
2. Planning
3. Ability to organise and utilize resources
4. Communication skills
5. Relationship with superiors, peers, subordinates & associates
6. Ability to make decisions
 7. Winning instinct – Can do attitude
8. Team working capabilities

 Question 10. How Is Appraisal System Used As A Tool To Chalk Out Employee's
Career Progression?

Answer :

 Performance appraisal system assesses the candidate’s performance in various areas.

 It also helps in identifying the training needs of an employee
 The line manager gets an idea about the area of interest of the candidate in which he
wants to grow, his ability to take more responsibilities etc.

All these put together help in chalking out the employee’s career progression in the
organization.

 Question 11. How Does Appraisal Help In Counselling Interview?

Answer :

The purpose of the counselling interview conducted by the line manager is to help his
subordinate in objectively analyzing his performance. The information collected through the
performance appraisal form and interview helps the manager in conducting this counselling
interview.

It helps the employee in:

1. Understanding himself.
2. Improving his behaviour which helps his professional and interpersonal competence.
3. Setting future goals and formulating an action plan.
4. Finding out the alternatives to deal with problems.

 Question 12. Explain 180 Degree Performance Appraisal System?

Answer :

 It is single-tier appraisal and feedback system.

 Candidate performs the self appraisal separately
 His line manager performs the appraisal separately
 They hold an appraisal meeting to discuss their reviews and agree on the ratings in
various areas.
 This is followed by identifying the training and development needs and an action plan
to improve the performance.

 Question 13. Explain 360 Degree Performance Appraisal System?

Answer :

 It is a multi-rater appraisal and feedback system.

  The individual is assessed by a number of people – superiors, subordinates, peers,
customers etc.
 The assessment is performed on a specially designed questionnaire which measures
behaviours critical for the performance in the role.
 The appraisal is performed anonymously by various people
 The assessments are consolidated and shared with the candidate.

HR Management Interview Questions & Answers

 Question 1. What Is Human Resource Management?

Answer :

 Human Resource Management (HRM) is the function within an organization that

focuses on recruitment of, management of, and providing direction for the people who
work in the organization. HRM can also be performed by line managers.
 HRM is the organizational function that deals with issues related to people such as
compensation, hiring, performance management, organization development, safety,
wellness, benefits, employee motivation, communication, administration, and
training.
 HRM is also a strategic and comprehensive approach to managing people and the
workplace culture and environment. Effective HRM enables employees to contribute
effectively and productively to the overall company direction and the accomplishment
of the organization's goals and objectives.

 Question 2. What Is Performance Management?

Answer :

Performance management is a system by which we should recognize and utilize the

employee’s skill, efficiency and as well as identifying his/her drawbacks, negative points and
try to remove those.

 Question 3. How Do You Endow With Performance Appraisal?

Answer :

There are many ways to do Performance Appraisal:

1. 90-degree appraisal-- Where the performance feedback is taken only from the
Supervisor.
2. 180-degree appraisal- Where the performance feedback is taken from the peers.
3. 360-degree appraisal- Where the performance feedback is taken from the supervisor
the subordinates, the peers, and the self-appraiser.

 Question 4. What Is The Difference Between Recruitment And Selection?

Answer :
Selection is selecting a candidate without conducting any technical test. Selection is based
only on personal interview.

Recruitment is a process of selecting an employee through a chain of processes (Aptitude

Test / Technical Test >> Personal Interview >> Technical Interview >> HR Interview >>
Finalizing the Offer).

 Question 5. What Are The Responsibilities Of Hr Generalist?

Answer :

The responsibilities are Induction Training Program, MIS Report Generation, Payroll
Calculation, Admin and Personnel work, Performance Rating, etc...

 Question 6. Tell Something About The It Payroll Status?

Answer :

IT0003 is used to define the current payroll status of the employee like released, exit etc. We
can lock the personnel number using the IT0003.

 Question 7. What Is The Difference Between Pre-booking And Booking?

Answer :

Booking is the actual booking of Attendee for an event; Pre-booking is used to check whether
the Attendee already booked for the event.

 Question 8. What Are The Ways To Transfer Applicant Data?

Answer :

Using PBA7 and PBA8.

 Question 9. How Do Applicant Actions Differ From Applicant Activities?

Answer :

Applicant Actions are like Rejected, on hold, on process. Activities can be all the various
activities perform for each activity for the Applicant.

 Question 10. In Which It Do You Assign An Applicant To A Vacancy? Where Do You

Assign That Status?

Answer :

Status. We can assign using the TCode PB40.

 Question 11. What Is Meant By Applicant Status?

Answer :

Applicant Status denotes the Status of the Applicant, say Screening, On Process, on hold,
Rejection and we have to define various reasons for each Status.

 Question 12. What Do Day Types Mean?

Answer :

Day types used to determine the particular day is payment relevant or not.

 0 - Work/Paid,
 1 - Time Off/Paid,
 2 - Time Off/Unpaid,
 3 - Time Off/Special.

 Question 13. What Is The Use Of The Feature Igmod?

Answer :

It is used to define your Info group.

 Question 14. What Are The Features Connected To Organizational Assignment?

Answer :

ABKRS, VDSK1, PINCH.

 Question 15. What Is The Feature Used To Create A Personnel Number? How Do
You Create A Personnel No.?

Answer :

1. NUMKR.
2. Using the Tcode PA40.

 Question 16. What Is Meant By Counting Classes?

Answer :

Counting Classes are used to define your various Counting rules for you are A/A types.

 Question 17. What Is Meant By Work Schedule Rules?

Answer :

WSR is used to define your WS for a defined period. It Comprises your EE Subgroup, PWS,
and HC. We can default the WSR using the Feature SCHKZ for your grouping.

 Question 18. What Are Dynamic Actions? Where Do You Configure Them?
Answer :

Dynamic Actions are automatically triggered by the system when it meets certain actions.
E.g. If you enter number of Child as 2 in IT0002, the system atomically triggers the IT0021,
subtypes Child to enter the details. Otherwise, it will not trigger the IT0021, if you did not
mention any value in number of child in IT0002. Same like that we can configure Dynamic
Actions depends on our need using the path IMG->PM->PA-> Customizing Procedure ->
Dyn Action or by using Table T588Z.

 Question 19. What Is The It To Store Educational Establishment Types? Why Do

You Need Them? Do Educational Certificates And Branches Of Studies Come Under
The Same It?

Answer :

IT0022. It is useful to maintain the educational details of the employee.

 Question 20. How Many Company Codes Can You Assign To A Personnel Area?
How Many Persons And Areas Can Be Assigned To A Company Code? Explain.

Answer :

Company Code can contain any number of PA, but one PA must contain One Company
Code. Because Co Code is the legal entity of the company, using which the FI people draw
various statements like BS, PL account.

 Question 21. Can You Assign A Job To Another Job, And A Position To Another
Position? Explain.

Answer :

We have to assign Position to Job. Because Job is General (E.g. Manager) and Position is
Specific (Manager -Hr).

 Question 22. How Can You Create New Objects In Org. Mgmt?

Answer :

To create a new object go to OM -> Basic Settings -> Data Model enhancement - > Create
Objects their relationship and TC.

 Question 23. What Kind Of Person Would You Refuse To Work With?

Answer :

Well, I am a person, who can work with all kinds of people. However, I feel bit
uncomfortable to work with selfish people and who are ingratitude in nature.

 Question 24. What Is Your Philosophy Towards Work?

Answer :

The answer should be positive attitude towards your work, you want to work with your other
teammates, help them in their work, and take help from them. That is the policy that should
be there and that would give the company more profit .

 Question 25. Have You Ever Had To Fire Anyone? How Did You Feel About That?

Answer :

"So with me, firing is a last resort. However, when it has to be done, it has to be done. A poor
employee can wreak terrible damage in undermining the morale of an entire team of good
people. When there's no other way, I’ve found its better for all concerned to act decisively in
getting rid of offenders who won't change their ways."

 Question 26. How Long Would You Expect To Work For Us If Hired?

Answer :

I will be satisfied until the time I am able to learn and contribute and my contribution's are
recognized.

 Question 27. Are You A Team Player?

Answer :

While answering this question, try to keep yourself on both sides. For example, if the
interviewer asks if you prefer to work alone or on a team, he may be trying to get you to say
you are one way or the other. However, you do not have to play this game. The reality is that
most jobs require us to work both independently and in teams. Your response to this question
should show that you have been successful in both situations.

 Question 28. What Do Co-workers Say About You?

Answer :

My co-workers always admit that I am good team player by providing suitable advices at the
right time. They also add that I have a balance between good stress and bad stress.

 Question 29. Describe Your Work Ethic?

Answer :

Work should give satisfaction to the people. If the person is satisfied with the work, he can
perform more, it reflects in the growth of the organization as well as individuals.

 Question 30. What Position Do You Prefer On A Team Working On A Project?

Answer :
It depends on situation, as I am being fresher for the job so I would like to join as fresher for
the project. If you have, any prior experience for the particular job you need to express them
because it is very important for you as nobody wants to work under his/her capabilities and
you will not be able to give best of yours.

 Question 31. If You Were Hiring A Person For This Job, What Would You Look
For?

Answer :

In my point of view, I would recommend the following things:

 Required skills for the role

 Team player
 Pro-activeness
 Loyalty to the work.

 Question 32. Do You Have Any Blind Spots?

Answer :

I would say everyone has blind spots, and I would too. Hence, I believe in teamwork, because
when you are a part of a team, you can point out other people's blind spots and they will do
the same for you.
Do not be too specific of your actual weakness. Instead, try to bring out that you are very
team oriented.

 Question 33. What Have You Learned From Mistakes On The Job?

Answer :

Making mistakes is of human nature but feeling guilty of the mistake or feeling sorry will be
the waste of time. Hence I was advised by my supervisor that we need to learn from the
mistakes and do not repeat it. Therefore, I realize my mistake and I do not repeat them.

 Question 34. Describe Your Management Style?

Answer :

 To be sincere and honest at work.

 Not to involve in subordinate's personal matters.
 To provide a friendly environment (Prioritizing the work).

 Question 35. Are You Willing To Show Interest Towards The Organization Ahead Of
Your Own?

Answer :

Yes, but in return I would expect the organization to take care of my needs as an individual.
 Question 36. Are You Willing To Work Overtime, Nights And Weekends?

Answer :

I have definite plans and I move forward accordingly in a systematic way. In case I am
behind schedule, I am ready to work overnight and make sure I complete it in time.

 Question 37. Do Your Skills Match This Job?

Answer :

Yes. In additions, I would try to utilize my skills according to the job given to me.

 Question 38. What Is Your Ability To Work Under Pressure?

Answer :

I have always enjoyed working under pressure. It is like a tonic, which boosts me, but I
always keep it under control so it does not take a toll on me.

 Question 39. What Are Your Positives Expressed By Your Ex-supervisor?

Answer :

Interpersonal Confidence Development, Commitment, Dedication, Diplomatic Decisions,

Humane
Consideration and Pro-Vision.

 Question 40. What Is More Important To You: The Money Or The Work?

Answer :

Money and work both are like siblings. However, I believe that when you work hard, you
could earn more. Therefore, work is more important than money. It is the hard work that can
help you put another feather in your success cap.

 Question 41. In What Aspects Do You Think You Would Do Well At This Job?

Answer :

Because of my consistency of good track record, Inquisitiveness to learn new and quick
adaptability for change and finally the support and cooperation required by my team
members.

 Question 42. What Is Ergonomics?

Answer :

The branch of engineering science in which we study the relation between workers and their
environments.
 Question 43. What Is Management Interview?

Answer :

It is the interview by a manager / Group head / Managing Director / Vice President of an

organization. This will often be a 5-10 minutes session where you might have to talk about
you and the skills you posses.

 Question 44. What Should Be The Answer For Why Did You Choose And Pursue
Carrier In Only Hr In An Interview?

Answer :

I am interested in People. So I choose HR which is it people management.

 Question 45. What Is The Procedure To Write A Cv And Resume? What Is The
Difference Between Them?

Answer :

A resume is a one or two page summary of your skills, experience, and education. A
Curriculum vitae includes a summary of your educational and academic backgrounds as well
as teaching and research experience, publications, presentations, awards, honors, affiliations
and other details. In Europe, the Middle East, Africa, or Asia, employers expect to receive
curriculum vitae.

In the United States, curriculum vitae are used primarily when applying for academic,
education, scientific or research positions. It is also applicable when applying for fellowships
or grants.

 Question 46. What Is Employee Retention?

Answer :

Keeping your key, quality employees happily so that, the company would not lose them to
the peer, competitive companies.

 Question 47. "customer Is A Key, Or Key Is A Customer," Describe And Express

Your Opinion?

Answer :

Customer is important for any organization because without them no business is possible.

Key is customer because they contribute in business by word of publicity. If they are
satisfied, they spread their experience and this may increase the customers. In case, if they are
not satisfied, we may lose customers.

 Question 48. Why Did You Take Hr As A Specialization?

Answer :

I am a person who enjoys interacting with different levels of people. I believe this is a basic
requisite for any HR Personnel.

In addition, I believe I can excel even in people management and hence HR is the right field
where I can utilize my skills.

 Question 49. How Will You Think If We Do Not Hire You?

Answer :

Well, your current position will remain open and you have to interview at least one more
person. It may be difficult for you to find a more dedicated and knowledgeable person than
me.I have to continue my search for excellent and best company where I can get challenging
and rewarding work experience. I thought we had win-win situation.

 Question 50. What Would You Do For The Growth Of This Company?

Answer :

If I have skill/sort of experience on a job then definitely, I will implement innovative ideas
for the growth of a company as well as will update my skill set with innovative ideas.

 Question 51. Why Did You Choose Hr? Why Do Want To Make Your Career In Hr?

Answer :

 HR- Human Resources

 To be a good HR person we need to have excellent interpersonal skills, good friendly
attitude, decision-making skills etc.
 HR is the backbone in an organization. Right from recruiting the suitable candidate to
training and then performance appraisal, compensation, until exit interview, all these
steps involves an HR.Therefore, if you want to be a soul of an organization not just a
part of it, you should be an HR.

 Question 52. What Is Your Future Plans For The Company If Permanently
Employed?

Answer :

First, I want to be expertise in my field within 1 1/2 yrs. Then I will be in next level in this
organization, which gives innovations and more responsibility.

 Question 53. What Are Your Pet Peeves?

Answer :

Overflowing paper trays on employee’s desks, this is a clear indicator either a performance
gap problem where the employee should have his/her duties performance measured to
address the gap or it could indicate a work overload where the employee has been allocated
too many duties for him/her to realistically perform in the course of the day/week/year.

 Question 54. What Is The Difference Between Job Role And Job Profile?

Answer :

Job role defines your exact position in a company like Manager, HR, and Job profile explains
different responsibilities, which you have in a company.

 Question 55. Describe Job Description And Job Analysis?

Answer :

Job Analysis refers to the process of determining and reporting pertinent information relating
to the nature of a specific job. It is the determination of tasks that comprise the job and the
skills, knowledge, abilities, and responsibilities required of the worker, which differentiates
one job from the other. Job description is an organized factual statement of the duties and
responsibilities of a specific job.

 Question 56. What Is Casual Leave?

Answer :

Casual leave is given to employee to attend sudden and immediate social and/or personal
obligations, or obligations like sister’s wedding, relatives death, children education
obligations (Children’s admission in school, Parent Teacher’s meet) or applying for personal
needs like Income Tax Returns, Passport, Ration Card, and Court Proceedings Etc.

Casual leave is not linked to the number of days worked and is usually fixed. The eligibility
is decided by the company and it can also decide whither excess leave can been cashed or
not. In all most all companies’ casual leave cannot be accumulated and carried on in next
year and a person can take a maximum of 3 C Ls together.

 Question 57. What Is Closure?

Answer :

Closure means permanent closing down of a place of employment or part thereof. 60 days
notice should be given for closure to Government, if numbers of persons employed are 50 or
more. 60 days notice is not necessary if numbers of persons employed are less than 50.

If number of workman employed are 100 or more, prior permission of government is

necessary for closure u/s 25-O.

 Question 58. What Is Performance Appraisal?

Answer :
  It is a systematic evaluation of an individual with respect to performance on the job
and individual’s potential for development.
 Performance appraisal is the assessment of individual’s performance in a systematic
way. It is a development of the employee and the organization.
 The performance is measured against such factors such as job knowledge, quality and
quantity of output, initiative, leadership abilities, supervision, dependability, co-
operation, judgment, versatility and health.

 Question 59. What Is Esi Scheme?

Answer :

ESI is an integrated social security Scheme tailored to provide social protection to workers in
the organized sector and their dependents in contingencies, such as sickness, maternity or
death and disablement due to an employment injury or occupational disease. The scheme
tailored to suit health insurance requirements of workers provides full medical facilities to
insured persons and their Dependants, as well as, cash benefits to compensate for loss of
wages or earning capacity in different contingencies.

 Question 60. What Is Meant By "burden Of Proof"?

Answer :

To take lead the evidence first.

 Question 61. What Is Notice Period?

Answer :

When an employee resigns from the organization he has to serve notice period, it means he
has to give change of his work to new employee so that the Organization cannot face any
type of problem due to work. It is just for the smooth functioning of company work.

 Question 62. The Regular Appraisal Period Is 1 Year And What Is The Minimum
Rating Period ?

Answer :

The minimum rating period is 120 days.

 Question 63. When Should Performance Standards Be Issued To Employees?

Answer :

Performance standards should be issued to employees at the beginning of the rating cycle
(normally within 30 days).

 Question 64. What Rating Should An Employee Who Fails To Meet Established
Performance Standards In Only One Critical Element?
Answer :

Unsatisfactory.

 Question 65. If The Rating Period Is Over And What Should Be The Rating The
Employee Has Not Been On The Job For At Least 120 Days?

Answer :

Rating is postponed until the employee has been on the job for at least 120 days.

 Question 66. What Should Be The Supervisor Duty, If An Employee's Performance

Improves To A Satisfactory Level During The Pip; However, Within One Year, His/her
Performance Falls To Below Satisfactory?

Answer :

Take steps to remove, demote or reassign the employee.

Statutory Compliance in Payroll- A Complete Guide

A lot of your organization’s time, effort and money go into ensuring that payroll is complaint
through a statutory audit. From employee’s fair treatment of labor to protecting the company
from unreasonable wage or benefit demands from trade unions or aggressive employees,
every company faces a worrying number of potential legal issues relating to compliance.
However, it may never be a company's intent to break these laws, but without necessary
protection, it may easily slip through the cracks.

So how can you be sure that you can avoid the risk of non-compliance?

To address this, let's first understand what statutory compliance is and the various
compliances required for Indian payroll.

What is Statutory Compliance?

The word statutory means “of or related to statues”- rules and regulations. Compliance means
adherence. Thus, Statutory Compliance means adhering to rules and regulations.

Statutory Compliance in HR refers to the legal framework that an organization should adhere
to in dealing with its employees.

Why is it important?
Every country has its own set of state and central labor laws that companies need to comply
with. Dealing with statutory compliance requires companies to be updated on all the labor
regulations in their country. It is also mandatory for companies to adhere to them. Non-
compliance with these regulations can cause a company a lot of legal trouble such as
penalties and fines. That is why every company invests a huge amount of money, effort and
time to meet compliance requirements from professional tax to minimum wages act. To help
in this, the company seeks expert advice from labour law and taxation law experts.

In order to manage with demanding regulatory environment, every company should be well
versed and take notice of all regulations in the labour laws. They need to formulate efficient
ways to maintain compliance and minimize risks.
Need for Statutory Compliance
The complexity of doing business has increased tremendously and it has become very
challenging to be in sync with the operational aspect of every business. As discussed earlier,
organization seek the help of statutory compliance experts whose main focus is to be
compliant with the ever-changing regulatory environment.

Also, a lot of companies also provide services on statutory compliance management and have
a deeper understanding of the regulatory setting and provide specialized services to
organizations. They streamline the process right from the day to day maintenance of
prescribed forms and registers to the filing along with reports.

Is it different for organization

Statutory compliance for a partnership firm, private limited company, LLP, or any type of
company does not change. Every organization that hires employees and pays salaries must
comply with the labor laws.
The Various Statutory Compliances Required For Indian Payroll
Payment of Wages Act, 1936

The Payment of Wages Act, 1936 regulates the payment of wages to direct and indirect
employees. The act warrants payments of wages on time and without any deductions except
those authorized under the Act. According to this act, the payment should be made before 7th
of every month where the no. of workers are less than 1000 and on the 10th day if greater
than 1000.

The Payment of Wages Act, 1936 regulates the payment of wages to employees (direct and
indirect). The Payment of Wages Act regulates the payment of wages to certain classes of
persons employed in industry, and its importance cannot be underestimated. The Act
guarantees payment of wages on time and without any deductions except those authorized
under the Act. The wage period shall not exceed 1 month.

The Payment of Wages Act does not apply to employees whose wage is Rs. 10000 or more
per month. The Act also provides to the effect that a worker cannot contract out of any right
conferred upon him under the Act.

Under the act, the payment has to be made in cash. Cheque payment or crediting wages to a
bank account is allowed with the consent of employee in writing. The deduction made by the
employer should be made by this act only.

Under the act, payment has to be made in currency notes or coins. Cheque payment or
crediting to bank account is allowed with the consent in writing by the employee. (Section 6)

This Act includes fines for (Section 8), absence from duty (Section 9), Damages or loss
(Section 10), deduction for services (amenities) given by employer (Section 11) recovery of
advances and loans (Section 12, 13) and payment to cooperative society and insurance
(Section 13).

Get to know the forms and compliances for Karnataka Payment of Wages Act.here

Minimum Wages Act, 1948

Minimum wages rates in India are fixed under the Minimum wages Act, 1948 and is
determined both by the Central Government and the Provincial governments. Minimum
wages rates may be established for any region, occupation, and sector and declared at the
national, state, sectoral and occupational levels. The minimum wages is determined by
considering cost of living.

While fixing the minimum wages rate, it may be set for different work classes in the same
scheduled employment or set for different scheduled employment. It may also be fixed by
hour, day, month or any other wage period.

Under the Minimum Wages Act, both the Central and State Governments may notify the
scheduled employments and fix/revise minimum wage rates for these scheduled
employments.
 There are two methods for fixing/revising minimum wages:

1. Under the committee method, the government sets up committees and subcommittees to
hold inquiries and recommendations for fixing and changing minimum wages.
2. In the notification method, government proposals get published in the Official Gazette for
persons who are likely to be affected and specifies a date (not less than two months from
the time of the notification) where the proposals are taken into consideration.

The government after considering the advice of committees and all the representations
received by the specified date, fixes /revises the minimum wage of the concerned scheduled
employment which comes into force after three months from the date of its issue.

The Payment of Bonus Act, 1965

The Payment of Bonus Act provides an annual bonus to the employee in the certain
establishment- including factories and establishments employing 20 or more persons Under
the Act, The bonus is calculated by the employee’s salary and the profits of the
establishment.

Employees drawing ₹21000 per month or less (basic + DA, excluding other allowances) and
have completed 30 working days in that financial year are eligible for the bonus payment.

Salary or wages include only basic and DA for the bonus payment, and the rest of the
allowances (e.g., HRA, overtime, etc.) are excluded. Bonus should be paid at a minimum rate
of 8.33% and maximum rate of 20%. It needs to be paid within 8 months from the close of
the accounting year.

Employees can be disqualified from bonus payments if they are dismissed by fraud,
misconduct, or even absenteeism. The employer needs to ensure that on dismissal, the
procedures of domestic inquiry, proper documentation and employee acceptance of the
misconduct are all carried out as per the standing orders before disqualifying the bonus
payment.

Know more on The Payment of Bonus Act.

Tax Deduction at Source (TDS)
TDS is deducted from the payments made by the individuals as per Income Tax Act. It is
managed by the Central Board of Direct Taxes (CBDT), which comes under the Indian
Revenue Services (IRS).

Under TDS, when an assessee gets his income, there will be a TDS deduction by the person
(deductor) paying the assessee and is submitted to the income tax department.

The assessee then files the TDS return and the tax calculated from his income will be
deducted and the final amount will be refunded.

TDS is exempted in the following 2 cases:

1. If the receiver gives a self-declaration saying that he had made the required investments in
FORM 15G/15H
2. If there is a certificate of exemption provided by the Assessing Officer

Income tax slab for individual tax payers & HUF

(less than 60 years old) (both men & women)

Assessment Year 2018-19

Taxable income Tax Rate

Up to Rs. 2,50,000 Nil

Rs. 2,50,000 to Rs. 5,00,000 5%

Rs. 5,00,000 to Rs. 10,00,000 20%

Above Rs. 10,00,000 30%

Less: Rebate under Section 87A

Add: Surcharge and Education Cess

In case of a resident senior citizen (who is 60 years or more at any time during the
previous year but less than 80 years on the last day of the previous year)

Assessment Year 2018-19

Taxable income Tax Rate

Up to Rs. 3,00,000 Nil
Rs. 3,00,000 - Rs. 5,00,000 5%
Rs. 5,00,000 - Rs. 10,00,000 20%
Above Rs. 10,00,000 30%
Less: Rebate under Section 87A
Add: Surcharge and Education Cess
In case of a resident super senior citizen
(who is 80 years or more at any time during the previous year)

Assessment Year 2018-19

Taxable income Tax Rate

Up to Rs. 5,00,000 Nil
Rs. 5,00,000 - Rs. 10,00,000 20%
Above Rs. 10,00,000 30%
Add: Surcharge and Education Cess

To understand the other tax slabs, refer here. Also to understand the various Rates for tax
deduction at source, refer here.

TDS Last Dates of FY 2018-2019 for Return Filing

Quarter Period Last Date of Filing

1st Quarter 1st April to 30th June 31st July 2018
2nd Quarter 1st July to 30th September 31st October 2018
3rd Quarter 1st October to 31st December 31st January 2019
4rd Quarter 1st January to 31st March 31st May 2019

The TDS certificate will be given as

 Form 16 for the people receiving the salary
 Form 16A for the people receiving income from any other source
 Form 16B- TDS on sale of any immovable property

For late filing of TDS return, there is a penalty of Rs. 200 per day or the amount of TDS
payable whichever is lower out of the two.

Professional Tax

Professional Tax is levied by the state government. This tax is paid by every individual who
earns. The limit is Rs.2500 per year and the calculation and amount collected may differ from
one state to another.
Since it is a tax that is levied by the state government, it tends to differ from one state to
another. Each state has a slab set, and the professional tax is deducted based on these slabs.

PT is collected by the employers from employees monthly salaries, and it then paid to the
government. Failure to collect or to pay professional tax may result in penalties.

Also if you're not working for an employer, you are liable to pay the professional tax
yourself. For professionals, not working with any employer, can register by applying through
a form. Once the form is received, a registration number will be issued to the individual.
Payment of the professional tax can be made under these registration numbers at banks.

Amendments to Maternity Benefit Act, 1961

The Maternity Benefit (Amendment) Act 2016, was passed by the Rajya Sabha in August
2016 and Lok Sabha in March 2017.

Under the law:

 The maternity leave is increased to 26 weeks, and the prenatal leaves are also extended
from 6 to 8 weeks.
 A woman is entitled to 12 weeks of maternity leave if she already has 2 or more children and
in this case, the prenatal leaves remain 6 weeks.
 The act also provides adoption leave of 12 weeks for a woman who adopts a child below 3
months.
 Female civil servants are entitled to maternity leave for 180 days for their first two live-born
children.
 Also, a commissioning mother gets about 12 weeks of leave when the child is handed over
to her.

The act also further requires an employer to inform women about her rights under this act
during her appointment day. This must be given to her in writing and also in the email.

Only on completion of at least 80 days in an establishment in the 12 months before her

delivery date, the maternity leave is awarded full pay. Apart from 12 weeks of salary, a
female worker is entitled to a medical bonus of 3,500 Indian rupees.

Know more on the compliance and rules in The Maternity Benefit Act, 1961
Equal Remuneration Act, 1976

The Equal Remuneration Act, 1976 provides for the payment of equal remuneration to men
and women workers for the same work and prevents discrimination, on the ground of sex,
against women in the matter of employment, recruitment and for matters connected in
addition to the that or incidental to it. This Act applies to virtually every kind of
establishment.

Refer here to know more about the compliance in this act.

Shops & Establishments Act

The Shop and Establishment Act is to regulate the employment condition of workers in shops
and establishments. This includes work hours, rest intervals, overtime, holidays, termination
of service, etc.

Registration needs to be done within 30 days from the date of commencement of business.
Even if there is no employee, the entity has to get registered under this act.

An application has to be submitted along with the fee and the scanned documents online.
Within 15 days of successful document submission, the department approves the registration.
The registration certificate can be downloaded from the portal.

A registration certificate is valid for 5 years and should be renewed after that.

In case of a change in address, status, partners intimation has to be given to the department
within 30 days of change through an online application.
The registration fee depends on the number of employees hired by the entity. Additional fee
has to be paid through filing an online application when there is an increase in headcount,
pay, etc.

The Employees' State Insurance Act, 1948

The ESI Act provides certain benefits to employees in case of sickness, maternity and
employment injury. The act applies to non-seasonal factories using power and employing
more than 10 employees, and non-power using factories and certain other establishments
employing 20 or more employees.

All benefits are provided in ESIC hospitals, clinics and approved independent medical
practitioners. The wage ceiling under this act has been enhanced from Rs. 7500 to Rs. 10000
per month.

The act provides period payments to women in case of confinement, miscarriage or related
sickness. This is applicable only to the insured women. They can also claim maternity
benefits of about 70% of their salary.

Know more about the ESI Act and its compliances..

Employees Provident Fund (PF) and Miscellaneous Provisions Act, 1952

The Employee Provident Fund (PF) and Miscellaneous Provisions Act, 1952 is created for
the social welfare of an employee. When one begins the employment, they are expected to
contribute monthly to their PF funds. The employer is also expected to contribute to its
employee retirement fund.

Any factory or establishment having 20 or more employees directly or through contract is

liable to be covered under this act.

The PF contribution is calculated on the basic wages and the dearness allowance. It doesn't
include food allowance, House Rent allowance, overtime allowance, bonus, commision, etc.

The wage limit to be covered under this Act is Rs.15,000/- per month.

The employer contribution is calculated at 3.67% of wage in general prescribed by the

Central government. Just like the employer, the employee should also pay an equal
contribution.

Contribution Employee Employer

Provident Fund 12% 3.67%

Employee Pension Fund - 8.33%

-No tax exempt

Exemptions -Eligible for deduction under -Tax exempt
80C

The employer is liable to fines for being a defaulter. However, this can extend up to
imprisonment of 3 years and a fine of Rs.10,000/-

The voluntary contribution is also covered under the Employee Provident Fund and
Miscellaneous Provision Act, 1952 for an establishment having less than 20 employees.
The admin charges are highlighted below:

EPF Admin Charges EDLI Admin Charges

1. 0.85% of total employee PF wages 1. 0.01% of total EDLI salary

2. Minimum of Rs. 75 per month in the case of an non- 2. Minimum of Rs. 25 per month in the
functional establishment having no contributory case of an non-functional establishment
member having no contributory member

3. Minimum of Rs. 500 per month for contributory 3. Minimum of Rs. 200 per month for
members contributory members

The Payment of Gratuity Act, 1972

The Payment of Gratuity Act applies to every shop or establishment in which 10 or more
persons are employed or were employed on any day of the preceding 12 months.

There is no percentage set by the act for the gratuity amount an employee is entitled. An
employer can use the formula-based approach or even pay higher than that.

Gratuity depends on 2 factors:

 Last drawn salary

 Years of service

To calculate how much gratuity is payable, the Payment of Gratuity Act, 1972 has
divided non-government employees into two categories:

 Employees covered under the Act

 Employees not covered under the Act

Calculation of gratuity

1. For employees covered under the Act

The amount of gratuity payable is calculated using the below formula. The formula is based
on the 15 days of last drawn salary for each completed year of service or part of thereof more
than six months.

The Formula:

(15 X Last Drawn Salary X Tenure of Working) divided by 26

Last Drawn Salary= Basic Salary, Dearness Allowance, and Commissions Received on Sales

2. For employees not covered under the Act

There is no law restricting an employer from paying gratuity to his employees even if the
organization is not covered under the Act. The amount of gratuity payable to the employee
can be calculated based on half month's salary for each completed year.

The Formula:

(15 X Last Drawn Salary X Tenure of Working) divided by 30

Last Drawn Salary= Basic Salary, Dearness Allowance, and Commissions Received on Sales

As per the government pensioners' portal, retirement gratuity is calculated like this: one-
fourth of a month's basic pay plus dearness allowance is drawn before retirement for each
completed six monthly periods of qualifying service.

In case of death of an employee, the gratuity is paid based on the length of service, where the
maximum benefit is restricted to Rs 20 lakh.

Labour Welfare Fund Act, 1965

Labour Welfare Fund focuses on the welfare of the workers and provides services and
facilities to the labourers by the employer to improve their standard of living, working
conditions and give social security.

These facilities are offered by the contribution from the employers and the employee. The
contribution rate differs from state to state.

The Labour Welfare Fund Act extends to housing, family care & worker's health service by
providing medical examination, A clinic for general treatment, infant welfare, women’s
general education, workers activity facilities, marriage, education, funeral. etc. State-specific
Labour Welfare Funds are funded by contributions from the employer, employee and in few
states, the government also.

This act has been implemented in only 15 states. The act is applicable only to a selected
category of employees, and it depends on the wages earned and the employee designation.
And this also depends on each state.

This Welfare Fund contribution can be made monthly, half-yearly or annually. The frequency
depends upon each State.
The employer needs to make the deduction from the salary of the employee and submit the
same to the Labour Welfare Fund board in the prescribed form before the due date.