With the business growth, the number of employees and the requirement for the maintenance of payroll records has increased. Various laws in the country mandate these records for companies.

What are Payroll Records?

A payroll record is defined as a list of all the employees of a company in which all the information related to the payments made to the employees such as salaries, wages, bonuses, taxes, etc. are recorded. These records help in the proper tracking of each payment that is paid to the employees.

The documents included while maintaining payroll records

The following is the brief list of documents that are required to maintain payroll records-

1. Information about Employees (professional and personal)

2. Attendance reports

3. Tax documents

4. Payment information

5. Wage rate

6. Leave Records (paid and unpaid)

7. Payroll deductions

How long to maintain Payroll Records?

Many of the acts are silent on this as to how long the payroll records need to be maintained. However, The Payment of Wages Rules, 1937, and The Minimum Wages Central Rules, 1950 mandate to maintain payroll records for a period of three years after the date of the last entry made therein. Whereas, The Employees’ State Insurance Regulations, 1950, mandates the employer to preserve the records for a period of five years from the date of last entry therein.

Non-Compliance risks for the company

1. Heavy Penalties, fines.

2. Civil and criminal liabilities

3. Risk of shutting down operations entirely.

4. Impact the company’s goodwill and reputation in the marketplace.

Conclusion

One of the primary responsibilities of the companies is to keep payroll records and regularly update them. It’s not just for employees, it’s also required by law. Legal assistance should be obtained in the maintenance, storage, or destruction of these records to avoid unnecessary legal consequences.

The Best Legal Services (bestlegalservices.in) can help you with your compliance requirements while maintaining payroll records. It can provide necessary legal advice to comply with various statutory laws while maintaining payroll records so that you can efficiently manage your business and maintain productivity.