Labour Law Compliance Every Recruiter Should Know- Career Choice Solution

By Career Choice Solution

Director: Mr. Abhishek P. | +91 9768991515

www.careerchoicesolution.com

| abhishek.p@careerchoicesolution.com

Introduction

In India’s fast-growing employment market, labour law compliance is not just a legal requirement—it is an essential responsibility for recruiters, staffing agencies, and HR professionals. Whether hiring for startups, SMEs, or large enterprises, every recruiter must understand the legal framework that governs employee rights, workplace safety, wages, and statutory benefits. At Career Choice Solution, we believe compliance builds trust, protects businesses, and ensures ethical hiring practices.

This blog highlights the key labour laws every recruiter should know while hiring employees across IT, Non-IT, industrial, and service sectors.

1. Shops & Establishments Act

This law applies to all offices, companies, and commercial establishments.

Recruiters must ensure clients comply with:

• Working hours
• Weekly holidays
• Overtime rules
• Leave policies
• Workplace safety norms

For staffing agencies, maintaining a valid S&E registration is mandatory.

2. Minimum Wages Act, 1948

Recruiters must ensure that candidates are placed at wages not below government-prescribed minimum wages for their region and sector.

Minimum wages vary based on:

• State
• Skill category (Skilled/Semi-skilled/Unskilled)
• Type of industry
• Ensuring fair compensation protects both candidate and employer reputation.

3. Payment of Wages Act, 1936

This law ensures employees receive timely salary, without unlawful deductions.

Recruiters must guide employers regarding:

• Salary cycle
• Permissible deductions
• Digital salary payment norms
• Timely payment reduces attrition and boosts employer branding.

4. Employees’ Provident Fund (EPF)

Under EPF Act, companies with 20+ employees must provide:

• 12% employer PF contribution
• PF registration for eligible staff
• Online UAN activation

Recruiters hiring for contract staffing roles must confirm PF compliance from clients.

5. Employees’ State Insurance (ESI)

Applicable for organizations with 10 or more employees, ESI ensures:

• Medical benefits
• Cash benefits
• Maternity coverage
• Occupational injury support

Recruiters should check ESI eligibility for employees below the prescribed salary threshold.

6. Payment of Bonus Act, 1965

Companies must pay annual bonus to employees earning below a specified salary limit.

Recruiters must ensure the CTC structure shared with candidates is compliant and transparent.

7. Contract Labour (Regulation & Abolition) Act

For recruitment agencies offering staffing/outsourcing services:

• Contractor registration
• Valid CLRA license
• Proper wage disbursement
• PF & ESI compliance
• This is crucial to avoid legal penalties.

8. Maternity Benefit Act

Recruiters hiring female employees must be aware that eligible women receive:

• 26 weeks paid maternity leave
• Work-from-home options
• Protection from termination during maternity

This law supports women workforce inclusion and employer responsibility.

9. Sexual Harassment of Women at Workplace (POSH Act)

Every organization must establish an Internal Complaints Committee (ICC).

Recruiters must inform employers about their POSH obligations to ensure safe working environments.

Why Recruiters Must Stay Updated on Labour Laws

• Avoid compliance risks
• Protect client and agency reputation
• Build trust with candidates
• Ensure ethical and fair hiring
• Support long-term workforce stability

At Career Choice Solution, we integrate compliance checks into our recruitment process to ensure smooth, lawful, and transparent hiring.

Conclusion

Labour law compliance is a crucial pillar of responsible recruitment. Understanding these regulations helps recruiters hire ethically, avoid legal complications, and build a stable workforce for clients. As a trusted recruitment agency, Career Choice Solution ensures every hiring process aligns with India’s statutory norms and industry best practices.

For reliable staffing and compliance-focused hiring, connect with us today.