Why Proper Employee Onboarding Compliance Matters
Every time a new employee joins your organisation, a cascade of statutory compliance actions must be triggered. Missing a single step — whether it's updating Form A under the Shops Act, enrolling the employee in ESIC, or collecting the nominee for gratuity — can create a compliance gap that persists for the entire duration of the employee's service and is discovered only during an inspection. Proper onboarding compliance is not just about checking boxes; it's about building a defensible compliance record that protects your establishment during audits.
This checklist covers every compliance action required when onboarding a new employee in Kerala, organised by the relevant statute. For ongoing monthly compliance after onboarding, refer to our Payroll Management Services guide.
Phase 1: Pre-Onboarding Documentation (Day 1)
- Collect PAN Card — mandatory for EPF, ESIC, and TDS compliance. Verify the PAN through the Income Tax portal.
- Collect Aadhaar Card — mandatory for UAN generation and ESIC IP number. Aadhaar must be linked to the employee's mobile number for OTP verification. Our UAN Portal Guide has details.
- Collect bank account details — cancelled cheque with IFSC code. This is where salary and PF withdrawals will be credited.
- Collect educational qualification certificates, experience letters, and relieving letters from previous employers for the establishment's HR records.
- Obtain the employee's UAN from their previous employment — never generate a duplicate UAN. If the employee has never worked at a PF-covered establishment, generate a fresh UAN. Our EPF Transfer Guide explains the UAN portability concept.
- Obtain nomination for gratuity (Form F) — every employee must nominate a family member within 30 days of completing 1 year of service. Gratuity Guide covers this in detail.
Phase 2: Statutory Registration (Within 7-10 Days)
- EPF: Login to the EPFO employer portal, enter the employee's UAN and personal details, link the UAN to your establishment's member ID. Generate and print the member ID slip.
- ESIC: If the employee's gross wages are ≤ ₹21,000/month, register them on the ESIC employer portal. Generate their IP (Insurance Permanent) number and e-Pehchan card. The IP number is 17 digits and stays with the employee for life.
- Professional Tax: Determine the applicable PT slab based on the employee's projected half-yearly gross earnings. Our PT Calculator does this automatically.
- Shops Act (Form A): Update the Register of Employees (Form A) with the new joiner's name, date of birth, date of joining, nature of work, and rate of wages. Update within 7 days of joining as per the Kerala Shops Act. Also read Shop Act Compliance.
Phase 3: Salary Setup and Payroll Integration
- Set up the employee's salary structure in the payroll system — basic salary, HRA, special allowance, and other components as per the offer letter. CTC Structure Guide explains optimal component ratios.
- Compute monthly deductions: PF (12% of basic), ESIC (0.75% of gross if applicable), PT (as per slab), and TDS (based on investment declarations).
- Add the employee to the monthly payroll run before the first salary processing date.
Phase 4: Statutory Register Updates
- Shops Act Form A: Update within 7 days of joining
- EPF member ID mapping: Link new UAN to your establishment
- ESIC IP number entry: Record in your internal HR register
- PT slab record: Note the applicable slab for each half-year
- Gratuity nomination (Form F): Obtain within 30 days of completing 1 year of service
Simplify Onboarding with GHR Consultancy
GHR Consultancy offers end-to-end employee onboarding compliance services — from document collection and statutory registration to salary setup and register maintenance. Our HR Consultancy & Pipelines handle the entire lifecycle so you never miss a compliance step. Contact us to streamline your onboarding process.