Global PEO Services (GPS) helps companies hire employees in India without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by our India PEO, while the new hires and headquarter teams focus on your business goals. Using an India PEO is the fastest and most efficient way to develop a workforce in India.
When hiring employees in India, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
We hires the employees on your behalf, legally contracting them through our subsidiary in accordance with India labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in India. With our India PEO services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
India - Country Overview
India, the world’s largest democracy, also has the world’s second-largest population. Culture and civilization have a long history and have had a global impact. In addition, India is a fast-rising economic and nuclear power. With a rapidly expanding economy, India increases exports and produces plenty of new businesses and jobs.
Indian Rupee (₹)
Federal Parliamentary Republic
Employment Contracts in India
No law imposes written contracts in India, but they are generally used to protect workers and employers and limit legal action. However, fixed-term contracts must be in writing.
India employment contracts typically include:
- Performance assessments
- Grievance and disciplinary procedure
- and more
The different types of employment relationships are:
- Permanent Employment – Per India’s Industrial Relations Code (IRC) 2020, permanent employment generally do not have any fixed termination date. Permanent employees enjoy statutory benefits such as paid annual leave, sick leave, compulsory health insurance, gratuity pay, and provident fund.
- Fixed-Term Contracts – Fixed-term contracts are usually for a set period under a written agreement, and the maximum term for which this designation may run is seven years.
- Temporary Employment – Per the Model Standing Orders for Service Sector 2020 India, temporary employment is for work that is essentially temporary and usually completed in a limited time. Temporary work agencies (TWAs) handle most temporary contracts in India.
A probationary period typically lasts up to 6 months in India, per the Model Standing Orders for the Industrial Relations Code, 2020. This period can further extend up to 3 months.
Working Hours in India
The Occupational Safety, Health, and Working Conditions Act 2020 of India states that employees cannot work more than 8 hours a day, six days a week. According to the Factories Act, the daily work schedule cannot exceed 9 hours, and the weekly work schedule cannot exceed 48 hours.
Holidays in India
Employees in India are entitled to the following leaves:
- Annual leave in India – Per India’s Occupational Safety, Health, and Working Conditions Act 2020, employees who have worked for at least 180 days in a year are allowed one leave per 20 days of work. Employees under 18 are entitled to one leave per 15 days of employment.
- Maternity leave in India – Per the Maternity Benefit Act of India, every female employee of a company with at least ten employees with 26 weeks of paid maternity leave can begin up to 8 weeks before the due date. Additionally, a woman who adopts a child under three months is entitled to 12 weeks of adoption leave.
- Sick leave in India – Company policies primarily govern sick leaves. The length of statutory sick leave varies by industry and ranges from 15 to 40 days.
- Paternity leave in India – While there is no statutory minimum paternity leave for private-sector workers, male government employees can take up to 15 days of leave if they have fewer than two surviving children.
The following are the statutory national holidays observed in India:
- January 13 – Lohri
- January 26 – Republic Day
- March 11 – Maha Shivaratri/Shivaratri
- March 28 – Dolyatra
- March 29 – Holi
- April 2 – Good Friday
- April 14 – Ambedkar Jayanti
- April 21 – Rama Navami
- April 25 – Mahavir Jayanti
- May 14 – Ramzan Id/Eid-ul-Fitar
- May 26 – Buddha Purnima/Vesak
- July 21 – Bakr Id/Eid ul-Adha
- August 9 – Muharram/Ashura
- August 15 – Independence Day
- August 30 – Janmashtami
- October 2 – Mahatma Gandhi Jayanti
- October 15 – Dussehra
- October 19 – Milad un-Nabi/Id-e-Milad
- November 4 – Diwali/Deepavali
- November 19 – Guru Nanak Jayanti
- December 25 – Christmas
Employee Termination in India
Employees who have been with the company for at least one year must receive written notice regarding their termination. The number of employees in the organization and the reason for dismissal determine the notice period. Generally, the notice period in India is as follows:
- Closure of establishment with at least 50 employees – 60 days of notice
- Industrial establishments with at least 300 employees – 3 months of notice
Global Mobility in India
All foreign nationals seeking to enter India must obtain a visa.
There are typically the following categories of visas in India:
- Transit visa
- Tourist visa
- Employment visa
- Business visa
- Student and research visa
- Entry (‘X”) visa
- Conference visa
India has specific requirements for issuing work permits and visas to employees assigned to work in the country. The most common is the Employment or E visa. It is valid for one year or until the end of the contract in India (up to 5 years).
Employee Benefits in India
The Pension Fund Regulatory and Development Authority (PFRDA) administers and regulates the National Pension System (NPS), a voluntary, contribution-based retirement savings plan.
The Indian Government established a pension scheme within the NPS called the Atal Pension Yojana (APY). In addition, some industries have various other pension plans that offer retirement benefits.
Social insurance, often known as social welfare, is a government-mandated insurance program that provides financial help to the elderly, disabled, and injured.
Some examples of social insurance programs in India are:
- Dependents’/Survivors Benefit – Survivor benefits for work-related injuries that result in death are as follows:
- Spouse’s pension – 60% of the disability pension
- Orphan’s and widowed mother’s pension – 40% of the disability pension
- Other eligible survivors’ pension – 40% of the disability pension to which the deceased was entitled is payable to eligible survivors and 20% to other dependents under 18.
- Life and Disability Insurance/Benefit – Depending on which pension system an employee is a member of, disability benefits may vary. Employees who suffer a temporary disability due to a workplace injury are paid 90% of the insured person’s average daily wages for the duration of the disability (must last at least three days).
In India, there are several statutory benefits based on various industry acts.