Factories Act Compliance: Key HR Responsibilities in India

The Factories Act, 1948 remains the backbone of labour regulation for manufacturing units in India. Despite the emergence of new labour codes, the practical realities of factory operations—shifts, safety, welfare, working hours, and inspections—continue to be governed largely by the Factories Act and state factory rules.

For Factory HR teams, compliance is not a paperwork exercise alone. It directly impacts worker safety, production continuity, legal risk, and industrial relations. Weak compliance often becomes the root cause of disputes, accidents, penalties, and even factory shutdowns.

This article explains what the Factories Act expects, and how HR must operationalise compliance on the shop floor.

Applicability of the Factories Act

The Factories Act applies to manufacturing units where:

• 10 or more workers are employed with power, or

• 20 or more workers are employed without power

Once applicable, compliance is mandatory irrespective of:

• Employment type (permanent, contract, trainee)

• Union presence

• Size of production output

HR must clearly establish applicability at the unit level and ensure registrations and renewals are always current.

Core Compliance Areas Under the Factories Act

Factory HR responsibilities broadly fall under five compliance pillars:

1. Working Hours and Leave Management

HR must ensure:

• Daily and weekly working hour limits

• Weekly holidays and compensatory offs

• Overtime calculation and payment

• Earned leave accrual, usage, and registers

Any deviation without approval exposes the factory to penalties and disputes.

2. Health and Safety Compliance

Safety is not optional under the Act.

HR must coordinate with safety officers to ensure:

• Safe machinery and guarding

• PPE issuance and enforcement

• Periodic health check-ups

• Accident reporting and investigation

• Safety training and mock drills

Most prosecutions under the Act arise from safety lapses.

3. Welfare Facilities

Factories must provide statutory welfare facilities based on workforce strength, such as:

• Clean drinking water

• Sanitary facilities

• Canteen

• Rest rooms and crèches (where applicable)

• First-aid and medical facilities

HR is responsible for upkeep, vendor management, and inspections readiness.

4. Employment Conditions and Records

HR must maintain:

• Muster rolls and attendance records

• Wage and overtime registers

• Leave registers

• Notice boards with statutory displays

• Identity cards and employment details

Incomplete or inconsistent records are treated as non-compliance even if practices are correct.

5. Inspections and Government Interface

HR is the primary liaison during:

• Factory inspections

• Show-cause notices

• Accident inquiries

• Licensing renewals

A prepared, transparent approach reduces friction and long-term scrutiny.

Role of Factory HR in Ensuring Compliance

Unlike corporate HR, Factory HR must work on the shop floor, not from policy manuals.

Effective compliance requires HR to:

• Translate legal provisions into SOPs

• Train supervisors and line managers

• Conduct internal audits

• Track state-specific rule changes

• Maintain discipline without fear-based enforcement

Compliance succeeds only when HR, operations, and safety teams function together.

Common Compliance Gaps in Indian Factories

Some recurring issues HR must watch out for:

• Excess overtime without approvals

• Poor contractor compliance alignment

• Incomplete statutory registers

• Delayed accident reporting

• Neglected welfare facilities

• Weak documentation during inspections

Most of these are preventable with structured HR processes.

Conclusion

Factories Act compliance is a continuous operational responsibility, not a one-time statutory task. For Indian factories, strong compliance protects workers, safeguards management, and supports stable industrial relations.

Factory HR teams play a central role in balancing productivity with statutory discipline. When compliance is embedded into daily operations, it reduces disputes, inspections become smoother, and the factory gains long-term credibility with authorities and employees alike.

🗹 Factory HR Compliance Checklist under the Factories Act

🗹 Confirm applicability and licence validity
🗹 Track working hours, overtime, and weekly offs
🗹 Ensure safety training and PPE compliance
🗹 Maintain welfare facilities as per thresholds
🗹 Keep statutory registers updated and accurate
🗹 Conduct internal compliance audits
🗹 Coordinate with safety officers and operations
🗹 Prepare proactively for inspections

Factories Act – Key HR Responsibility Matrix

Conclusion--

Effective labour law compliance depends on how well HR operations, payroll, and business processes work together. When compliance is embedded into everyday workflows, organisations reduce risk, improve accuracy, and build sustainable governance systems. HR teams that prioritise integration over isolation are better positioned to manage compliance confidently and consistently.