✅ Comprehensive Audit Checklist under the Code on Wages, 2019 (State-wise Compliant)
📅 For Monthly, Quarterly or Annual HR/Compliance Audits
🧾 1. Wage Structure & Salary Components
| Audit Item | Checkpoint | Compliance Tip |
|---|
| 1.1 | Is at least 50% of total remuneration included in "Wages" as defined under Section 2(y)? | Adjust Basic + DA accordingly |
| 1.2 | Are allowances (HRA, conveyance, bonus, incentives) not exceeding 50% of CTC? | Recalculate CTC if necessary |
| 1.3 | Is VDA (Variable Dearness Allowance) being revised as per state-specific frequency (e.g., half-yearly in MH & TN)? | Use CPI-IW index updates |
| 1.4 | Are part-time workers paid 15% premium over normal hourly rates (as required in Maharashtra)? | Apply premium where applicable |
| 1.5 | Have wages been revised after state’s latest minimum wage notification? | Keep updated with local wage board updates |
📄 2. Registers & Forms (As per Code on Wages Rules)
| Audit Item | Form | State Variations |
|---|
| 2.1 | Register of Wages | Form I |
| 2.2 | Register of Overtime | Form II |
| 2.3 | Register of Deductions | Form III |
| 2.4 | Register of Fines | Form IV |
| 2.5 | Register of Advances | Form V |
| 2.6 | Wage Slip | Form VI |
| 2.7 | Evidence Register (Complaints) | Form VII |
| 2.8 | Appeal Register | Form VIII |
| 2.9 | Annual Return Submission | Form IX |
📥 3. Payment of Wages Compliance
| Audit Item | Frequency | Remarks |
|---|
| 3.1 | Are wages paid within 7th or 10th of the following month as per Act? | Monthly payroll cutoff check |
| 3.2 | Is salary credited directly into employee bank accounts? | Digital transfer mandatory |
| 3.3 | Are no unauthorized deductions made? | Check if deductions are per Sec 18 |
| 3.4 | Are loan/advance repayments as per agreed installments? | Document approval & recovery record |
⚖️ 4. Equal Remuneration
| Audit Item | Gender Parity Check | Compliance Action |
|---|
| 4.1 | Is equal pay given for same/similar work to male/female/third gender workers? | Review designation-wise salary |
| 4.2 | Are promotions and pay hikes non-discriminatory? | Ensure HR policy reflects parity |
| 4.3 | Do job descriptions mention non-discriminatory nature? | Include in appointment letters |
🧑⚖️ 5. Bonus & Statutory Benefits
| Audit Item | Law | Status |
|---|
| 5.1 | Is bonus paid under Payment of Bonus Act till Central Rules notified? | 8.33% minimum, 20% max |
| 5.2 | Is gratuity paid under Payment of Gratuity Act till Wage Code enforced? | >5 years of service |
| 5.3 | Is Leave Encashment paid as per state law/Standing Orders? | Maintain leave register |
🛠️ 6. Inspector-Cum-Facilitator Interaction
| Audit Item | Preparation | Remarks |
|---|
| 6.1 | Are all records digitally available for inspection? | Use HRMS or labour compliance software |
| 6.2 | Are intimations of deductions submitted within 10 days (in MH)? | Track via HR calendar |
| 6.3 | Is the establishment registered under Code on Wages Portal (once live)? | Mandatory for all employers |
| 6.4 | Are copies of notifications and VDA revisions available for reference? | Maintain hard & soft copies |
📢 7. Display & Notices
| Audit Item | Required Notice | Location |
|---|
| 7.1 | Minimum wages applicable | At main gate or employee notice board |
| 7.2 | Abstract of Code on Wages (in local language) | As per Rule 22 |
| 7.3 | Grievance Redressal Officer details | Mention name/contact clearly |
💻 8. State-Specific Additional Requirements
| State | Extra Compliance Area |
|---|
| Maharashtra | Online filing of deduction notices, extra premium for part-time |
| Tamil Nadu | Strong enforcement of working hours and VDA compliance |
| Gujarat | SEZ compliance flexibility; MSME-friendly inspection |
| Kerala | Legacy minimum wage levels; early VDA adaptation and union oversight |
🧮 9. HR Policy & Internal Compliance
| Audit Item | Review Needed |
|---|
| 9.1 | Are offer letters & salary breakups Code-compliant? |
| 9.2 | Is internal wage audit done quarterly? |
| 9.3 | Are HR policies updated with new "wage" definition? |
| 9.4 | Is a Grievance Redressal Officer appointed (mandatory >20 workers)? |
| 9.5 | Are internal records reconciled with payroll and finance data? |
🟢 Final Compliance Scorecard Template
| Area | Score (Out of 5) | Remarks |
|---|
| Wage Structure | ✅✅✅✅ | Aligned with 50% rule |
| Registers & Forms | ✅✅✅ | Needs digitization |
| Timely Payments | ✅✅✅✅✅ | Excellent |
| Bonus & Benefits | ✅✅✅ | Partially delayed |
| Display & Abstracts | ✅✅ | Missing in branches |
| Inspector Preparation | ✅✅✅✅ | Portal setup pending |
| HR Policy Alignment | ✅✅✅✅✅ | Fully compliant |
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