Employer of Record in India

General Information

• Currency: Indian Rupee (INR)
• Employer Taxes: Unknown
• Payroll Frequency: Monthly
• Employee Costs: 16.75%
• Capital: New Delhi
• Fiscal Year: 1 April – 31 March

Main Aspects of the Labour Code

Minimum Wage

General: In India, the national minimum wage is determined by individual state governments. The system is intricate, with thousands of job classifications for unskilled workers and over 400 employment categories, each with a specified minimum daily wage. Recently, the new Labour Code has significantly raised the minimum wage, increasing it by 14.5 times to Rs 15,000 per month.

Payroll

Payroll Cycle: In India, the payroll cycle is typically monthly, with wages usually paid on or after the 28th of each month.

13th Salary

In India, the 13th salary is mandatory for low-income workers. It is calculated as a percentage of the annual salary and must be paid within eight months of the end of the financial year.

Working Hours

General: In India, the standard working hours are typically 40 hours per week, with an 8-hour workday. However, some organizations may extend this to 48 hours per week, including breaks, based on client requirements. Generally, employees are expected to work between 8 to 9 hours a day, with 8 hours being the most common practice among organizations.

Overtime:

Any work exceeding the standard 48 hours per week is considered overtime and must be compensated according to the terms specified in the employment contract. Overtime is typically paid at a rate of 200% of the regular pay rate.

Leave

Annual Leave (Vacation):

In India, paid leave regulations are typically outlined in the employment contract, with a minimum of 15 days of paid leave granted annually after the completion of 240 days of employment. It is common for contracts to include additional leave days and specify rules for carrying over unused leave to the following year.

Employees must submit paid time off (PTO) requests at least 15 days before the intended leave start date. These requests must be approved by the employer, the works committee, and the manager to ensure continuity of work.

Public Holidays

Workers in India are entitled to 12 public holidays per year. While the nationwide holidays are standard, employees have the option to substitute these days with regional or religious holidays of their choice.

When a public holiday falls on a Saturday, it is observed on the preceding Friday. If a public holiday falls on a Sunday, it is observed on the following Monday.

Sick Days

In India, employees are entitled to a combined total of 12 days of sick and casual leave. This leave can be used for both medical and non-medical emergencies. Sick leave is designated for health-related issues, while casual leave covers unplanned situations. The distribution of these 12 days between sick and casual leave can vary based on individual needs, such as 7 casual and 5 sick leave or 8 sick and 4 casual.

Maternity Leave

Eligible expectant mothers in India are entitled to 100% of their regular salary for 26 weeks for their first two children. For any subsequent children, the entitlement reduces to 12 weeks. No woman is permitted to work during the six weeks immediately following the delivery or a miscarriage.

To qualify for this maternity leave, the employee must have been employed for at least 80 days in the 12 months preceding the expected due date.

Adoptive mothers and commissioning mothers in India are entitled to 12 weeks of maternity benefits from the date the child is handed over, provided the child is below the age of 3 months. A commissioning mother is defined as a biological mother who uses her egg to create an embryo implanted in another woman.

Additionally, companies with 50 or more employees are required to provide a creche facility within a prescribed distance, either as a separate facility or combined with other common amenities. Employers must allow women to visit the creche up to four times a day, including during their rest intervals.

Paternity Leave

Government employees in India are entitled to 15 days of paternity leave. However, there are no statutory paternity leave laws for the private sector, meaning that private employers are not legally required to provide paternity leave.

Parental Leave

In India, there are no statutory laws mandating parental leave. This means that there are no legal requirements for employers to provide leave for both parents beyond the existing provisions for maternity leave.

Other Leave

n India, leave entitlements and policies, including those beyond the statutory provisions, are generally determined by individual states. Each state may have its own regulations and additional leave entitlements, which can vary from one state to another.

As businesses expand their operations into new markets, managing local employment compliance and administrative tasks can be challenging. For companies looking to enter the Indian market, leveraging an Employer of Record (EOR) can simplify the process and ensure compliance with local regulations. Brain Source International offers comprehensive EOR services in India, providing a strategic solution for companies to hire and manage employees effectively.

Partnering with Brain Source International as your Employer of Record in India provides a strategic advantage for companies looking to expand into the Indian market. With their expertise in local compliance, streamlined administrative processes, and comprehensive support, Brain Source International helps businesses navigate the complexities of international hiring, allowing you to focus on growth and operational success.

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