Labour law compliance in India is rarely short of complexity. With dozens of central and state statutes governing employment, a workforce that spans permanent staff, contractual labour, and a rapidly growing gig economy, and the long-pending transition to the four Labour Codes, staying compliant has become one of the more demanding responsibilities an HR function carries. And yet, for many organisations, it remains a back-office afterthought until an audit or employee dispute forces it into the spotlight.
Manmeet Singh, Principal Consultant at MJM Jurisprudentia, has spent years working at the intersection of labour law and HR practice. His work with organisations across sectors has given him a ground-level view of where compliance gaps actually live, why they persist, and what it takes to build employment practices that hold up under scrutiny. In this conversation with ThePeoplesBoard, Manmeet unpacks the most common mistakes Indian employers make, why even compliance-aware organisations fall short, and what it means to embed compliance into organisational culture rather than treat it as a periodic exercise.
TPB Team: Labour law compliance is often seen as a back-office function. Why should business leaders pay more attention to it?
Manmeet: Labour law compliance is fundamentally a business risk issue, not merely an HR or administrative responsibility. Non-compliance can result in financial penalties, litigation, operational disruptions, reputational damage, and even restrictions on business expansion. In today’s environment, investors, customers, and employees increasingly expect organisations to demonstrate ethical and compliant employment practices. Business leaders who view compliance strategically are often better positioned to build sustainable and resilient organisations.
TPB Team: Based on your experience, how would you describe the current state of labour law compliance among Indian employers?
Manmeet: The overall level of awareness has improved significantly over the past decade. Most employers recognise the importance of compliance and make genuine efforts to meet statutory obligations. However, compliance maturity varies considerably. While larger organisations generally have structured processes, many businesses continue to focus on filing returns and maintaining registers without periodically evaluating whether their underlying practices are fully compliant with evolving legal requirements.
TPB Team: Do you think organisations today are more compliance-conscious than they were a decade ago? Why or why not?
Manmeet: Yes, without question. Increased regulatory scrutiny, digitisation of compliance systems, greater employee awareness, ESG considerations, and investor expectations have all contributed to higher compliance consciousness. At the same time, the complexity of operating across multiple states and complying with numerous labour laws means that awareness does not always translate into complete compliance.
TPB Team: What are the most common labour law compliance mistakes you see employers making today?
Manmeet: Some of the most common gaps include incorrect employee classification, improper wage structuring, delays in statutory registrations, inadequate contractor compliance monitoring, non-maintenance of records, and weak documentation relating to employment terms and workplace policies. Another frequent issue is assuming that compliance is complete simply because statutory filings are being made, while overlooking process-level deficiencies.
TPB Team: Are these mistakes more common among startups and SMEs, or do large organisations make them as well?
Manmeet: Compliance gaps exist across organisations of all sizes. Startups and SMEs often face resource constraints and may lack dedicated compliance expertise. Large organisations, on the other hand, face challenges arising from scale, multiple locations, large contractor populations, acquisitions, and complex workforce structures. The nature of the risk may differ, but no organisation is entirely immune from compliance gaps.
TPB Team: Why do organisations often discover compliance gaps only when an audit or inspection takes place?
Manmeet: Compliance is often treated as a periodic activity rather than a continuous process. Many organisations focus on meeting immediate operational priorities and assume that existing practices are compliant because they have not previously faced challenges. Audits and inspections provide an independent review that frequently uncovers gaps that may have existed for years without being detected internally.
TPB Team: How much of compliance risk comes from poor HR processes rather than a lack of legal knowledge?
Manmeet: In my experience, a significant proportion of compliance risk arises from process failures rather than legal ignorance. Most organisations are aware of the broad legal requirements. The challenge lies in consistent implementation. Issues such as poor onboarding practices, incomplete documentation, inadequate record-keeping, weak contractor governance, and ineffective employee lifecycle management often create compliance exposures despite good legal awareness.
TPB Team: What can happen when organisations ignore seemingly small compliance issues?
Manmeet: Small compliance gaps rarely remain small indefinitely. A missing record, delayed filing, or procedural lapse may appear insignificant in isolation but can become a major issue during inspections, employee disputes, due diligence exercises, or litigation. Minor non-compliances often serve as indicators of larger governance weaknesses within an organisation.
TPB Team: How does strong compliance contribute to better employee relations and workplace trust?
Manmeet: Employees are more likely to trust organisations that consistently honour their statutory obligations and maintain transparent employment practices. Compliance helps create fairness, predictability, and accountability in the workplace. When employees feel that policies are applied consistently and legal obligations are respected, it strengthens organisational credibility and reduces the likelihood of disputes.
TPB Team: Can poor compliance affect an organisation’s employer brand and ability to attract talent?
Manmeet: Absolutely. Today’s workforce has greater access to information than ever before. Issues relating to wages, benefits, workplace practices, or regulatory violations can quickly become public and influence how prospective employees perceive an organisation. Strong compliance reinforces an employer’s reputation as a responsible and trustworthy workplace, while repeated compliance failures can have a lasting negative impact.
TPB Team: In your view, who owns compliance—the HR team, legal team, or business leaders?
Manmeet: Compliance is a shared responsibility. HR, legal, finance, operations, and business leaders all play important roles. While HR and legal teams may provide subject matter expertise and oversight, effective compliance can only be achieved when business leaders actively support and prioritise it. Ultimately, compliance must be embedded into organisational culture rather than confined to a single department.
TPB Team: What compliance challenges do you expect employers to face over the next few years?
Manmeet: Employers are likely to face increasing complexity arising from labour code implementation, evolving workplace models, gig and platform work arrangements, contractor governance, data privacy obligations, and growing expectations around workplace conduct and employee well-being. The challenge will be balancing compliance requirements with operational agility and workforce flexibility.
TPB Team: If you could give HR leaders one piece of advice to strengthen compliance today, what would it be?
Manmeet: Move beyond a checklist approach. Compliance should not be viewed merely as filing returns or maintaining records. HR leaders should periodically review end-to-end people processes, identify practical gaps between policy and implementation, and build a culture where compliance becomes part of everyday decision-making rather than an annual exercise. Organisations that integrate compliance into their operational DNA are far more likely to remain compliant in the long term.
Manmeet’s perspective cuts through the usual compliance conversation. Compliance, he argues, is less about knowing the law and more about whether an organisation’s day-to-day HR processes are built to hold. For HR leaders navigating the Labour Codes, contractor governance, and a workforce that no longer fits neatly into traditional categories, that shift from checklist thinking to process thinking may be the most consequential one they can make.
