How to hire and pay employees in India

Working hours are capped at 48 hours a week with 9 hours of work per day.

When employing an individual in India, entering into a written employment contract is not mandatory. According to India’s Industrial Employment Act 1946, some statutes require the employee to disclose prescribed particulars in writing. Where an employment contract is written, the following is included:

• The employee’s position and duties
• Compensation, including benefits such as bonus pay and retirement savings plan options
• Working hours, holidays, and leave entitlements
• Term of employment (where applicable) and termination provisions

India’s Industrial Employment Act of 1946 provides a probationary period of up to three months. Probationary periods are not required but are considered common practice. Certain states have the probationary concept indirectly built into their local laws, which range from three to six months.

Employees in India earn a minimum of 15 days’ leave a year; however, laws vary between states. Employees can also benefit from 10 additional days of casual leave, where an employee can opt not to come to work that day without applying for leave in advance.

State laws regarding sick leave vary, but most states offer around 10 days of paid sick leave. Any unpaid time off provided to an employee is purely at the employer’s discretion.

The Maternity Benefit Act 1961 provides salary-paid leave to pregnant women during the maternity period and protection against dismissal during their leave. This applies to eligible female employees who have completed 80 working days with the same employer in the 12 months immediately preceding the expected due date.

In 2016, the Maternity Benefit Act 1961 was amended to include:

• An increase in paid time off for eligible female employees from 12 weeks to 26 weeks if a female employee has fewer than two children. She is entitled to 12 weeks’ leave if she has two or more children.
• The introduction of the concepts of a “commissioning mother” and an “adopting mother.” Such mothers are entitled to 12 weeks’ leave.
• The option to work from home once the leave period has ended is based on an employer’s agreement.
• Requiring an establishment with 50 or more employees to organize childcare for female employees’ children.

A female employee is also entitled to an additional six weeks of paid maternity leave in the event of a miscarriage or medical termination of the pregnancy.

Public holidays in India vary from state to state. However, most states prescribe about 10 days of public holidays per year, with paid time off provided to allow employees to vote. Of the 10 public holidays, four to five of these are mandatory national holidays, while the remainder are chosen by employers from a larger list provided by the state. Public holiday entitlement is generally covered by the employment contract.