India offers access to a large, cost-effective talent pool and serves as a key hub for global companies expanding into Asia. Employers must comply with both central labor codes and state-specific regulations, including employer provident fund (EPF) and state insurance (ESI) contributions (employer 15.33–16% depending on the salary bracket), Tax Deducted at Source (TDS) withholding, and statutory benefits such as gratuity and leave encashment.
Currency: Indian Rupee (₹ INR)
Language: English (official business language)
Regulatory Authority: Ministry of Labour and Employment (MoLE)
State-specific minimum wage (varies by skill level): approx. ₹10,000–₹18,000 per month.
Written employment contract required; may be indefinite or fixed-term.
Up to 6 months standard; may be extended to 12 months for senior roles
Employer burden: 15–16% (PF 12%, ESI 3.25%).
12-18 days earned leave + casual/sick leave
48 hours/week (8 hours/day) standard
EPF 12%, ESI 3.25%, Professional Tax (state-specific)
Progressive employee Tax Deducted at Source (TDS) withholding (5–30%).
Double wages as per Factories Act/Shops & Establishments Act
India requires employers and EOR providers to issue clear written employment contracts specifying the job role, CTC structure (Basic, HRA, allowances, bonus), statutory benefits (PF, ESI, gratuity, and leave), probation terms, confidentiality/IP clauses, termination rules, and dispute-resolution mechanisms. Workers must be properly classified as permanent, fixed-term, or independent contractors to avoid misclassification risks. Probation may extend up to 6–12 months depending on the role. Employers must register employees with EPF, ESI, and Professional Tax (state-specific) authorities; register with income tax authorities; deduct TDS under slab rates; issue monthly payslips; and complete quarterly and annual filings such as Form 24Q and Form 16. Payroll must include EPF (12%), ESI (3.25%), and state taxes, with timely salary credit and compliance checks. For expatriates, FEMA/RBI rules apply. Employers must comply with the Shops & Establishments Acts, maintain POSH Internal Complaints Committees, pay Labour Welfare Fund contributions, ensure occupational safety standards, and comply with India’s Digital Personal Data Protection (DPDP) Act for data privacy.
Employees receive earned leave (12–18 days), sick and casual leave as per state rules, paid maternity leave of 26 weeks (reduced for subsequent births), and statutory bonuses for eligible salary levels. Public holidays vary by state. Gratuity is payable after five years and must follow the statutory formula. Termination requires 1–3 months’ notice depending on the contract and applicable state law; during probation, a simplified notice period applies. Final settlement must include salary dues, leave encashment, gratuity (if eligible), bonuses, and statutory forms (relieving letter, PF/ESI documentation, and Form 16). Retrenchment requires statutory severance (15 days’ wages per year) and, in mass layoffs, government approval. EOR providers must fully manage contracts, statutory registrations, payroll filings, leave compliance, and documentation while ensuring proper contractor classification, background checks, expatriate visa compliance, and adherence to all applicable Indian labour, social security, tax, and data-protection laws.
