5 Important Laws Every HR Manager Should Know About!


5 Important Laws Every HR Manager Should Know About!

  • Amit
  • 23-Jun-2020
  • 283

Every HR manager, be it a fresher or a person with years of experience, should have a good legal understanding. If you have no idea about important organizational laws, then keep reading as this blog will surely sharpen your HR knowledge a little more.

HR professionals play a vital role in every company. Right from hiring to retaining employees, they carry out a number of duties on a daily basis. This makes it even more important for HR managers to learn and understand every crucial law.

Employees may have multiple doubts/queries such as EPF and gratuity calculation formula, etc., and they look up to their HR even for a minute issue. Now, if one doesn’t have any legal knowledge, then it can be risky for the organization as a whole.

So, here are some important laws every HR must know to ensure that his or her firm is free from all the future problems:


Sexual Harassment Act, 2013

The Sexual Harassment Act was passed in the year 2013. From then, it has helped a number of victims working in the private business sector. Surprisingly, most of these victims were HR managers who complained about sexual harassment by their colleagues or supervisors.

Many companies in India have a sexual harassment committee within their firm to address such complaints but most of them do not include HR professionals in this committee. However, it doesn’t mean that HRs should be clueless about this law. There is no harm to learn and understand the clauses, compliance, and procedures involved in this act. Remember, a lack of information can result in various serious problems.


The Employee Provident Fund Act, 1947

EPF and gratuity are two common employee benefits. One out of five employees have queries regarding these benefits such as, who are eligible for EPF? Or what is the gratuity calculator? In this case, the HR manager should know everything related to such benefits, even their laws and clauses.

Talking about the Employee Provident Act, it is mainly designed to offer social security to every working individual. Every employee who is working for a company is entitled to this benefit. Firms with more than 20 employees are liable to register for this act.


The Payment Of Gratuity Act, 1972

The most commonly asked questions related to gratuity are-

  • How is gratuity calculated?
  • What is the gratuity calculation formula?
  • What is the eligibility to acquire gratuity?


Every HR manager out there might be asked these questions once in his or her lifetime. So, one should thoroughly know about the Payment of Gratuity Act to answer them!

Gratuity is given by employers to their employees for the services rendered by them during the period of employment. Employers provide this as a token of gratitude to every employee for his or her service during the employment tenure. As mentioned earlier, it is one of the most crucial employee benefits.

So, there are many factors that make an employee eligible for gratuity funds such as an employee should complete a minimum of five year service in a company.


The Payment Of Bonus Act, 1965

Both HR managers and employers must have a clear picture of this act to figure out:

  • Who is entitled to a bonus?
  • Is an employee on a higher pay scale entitled to more bonuses?
  • How many times are employees entitled to bonuses?

The Payment of Bonus Act is particularly designed to provide bonuses to the employees. Regardless of the experience, every employee is provided with a bonus as per this act. Now, there are some conditions as well, including:

  • His or her salary is more than 15,000
  • He or she has worked for at least 30 working days

Also Read: Importance of Gratuity in Our Life

The Maternity Benefit Act, 1961

This is perhaps one of the well-known benefits of this whole list. This Act renders both benefits and protection to working mothers. This act allows every pregnant employee to acquire paid maternity leaves. Again, there are numerous important factors related to this act every HR manager must know about, such as the total number of days a pregnant employee must work to be eligible for maternity benefits under this act.

According to this act, if a pregnant employee works for a total of 80 days, then she will be eligible to claim maternity benefits. There is more to it and an HR manager should know each one of them to further educate or help his/her employees effectively.

In a nutshell, they are the ones who shape and grow their firm successfully. So, these were some important laws that HR managers should know to help their company stay compliant. The combination of legal awareness and human resources can help a business to reap ample benefits, thus improving the overall profit.

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