India 🇮🇳
Congratulations on your decision to hire employees in India! With its rapidly growing economy, thriving tech industry, and a wealth of talented professionals in various sectors, India offers a dynamic environment for business growth, innovation, and development. The country's blend of rich cultural heritage and a forward-looking entrepreneurial spirit makes it an exciting and rewarding landscape for global businesses. Plane simplifies the hiring process for you by offering automated tax document collection, payroll, benefits administration, and more, while ensuring compliance and maximum efficiency. Still, hiring in a new country can pose certain challenges, so we’ve put together the following guide on how to navigate the process of hiring in India.
Currency
INR
Onboarding
2.5 weeks minimum
Employer Cost
17.65%
Pay Frequency
Monthly
Public Holidays
3+
5 Considerations Before Hiring in India
As an employer in India, it is important to have a comprehensive employment contract that outlines the terms and conditions of the employment relationship. The contract should include need-to-know info on compensation, benefits, vacation time, and sick leave policies. Before onboarding a new employee in India, take a moment to consider the following questions:
Getting Started with Hiring in India
Employment Contract
In India, employment contracts are crucial for defining the terms and conditions of employment between an employer and an employee. By law, these contracts can be verbal or written, but written contracts are highly recommended for clarity and legal certainty. Employment contracts must comply with all applicable Indian labor laws.Employers may use two types of employment contracts:
- Indefinite contracts: For permanent, full-time employees
- Fixed-term contracts: Must state an end date. Maximum length, including renewals, is four years. Any employee who works for more than four years becomes a permanent employee. Employees on fixed-term contracts are entitled to the same benefits and treatment as permanent employees.
- The employer and employee’s names and addresses
- The job title, duties, and responsibilities
- Work location
- Work hours and days
- Overtime
- Salary and payment intervals
- Vacation and leave entitlements
- Conditions for termination
- Notice period
- The length and conditions of the probation period, if applicable
- Duration of the contract, if fixed-term
Payroll Timelines and Dates
Pay Frequency: Employee payroll is monthly, with 12 pay periods per year. Pay is distributed on the last business day of the month.Payroll Change Cutoff Dates: To meet payroll deadlines, any changes must be submitted to support@plane.com by the cutoff date. For India, the payroll change cutoff date is on the last business day of the previous month. For example, changes to June payroll would need to be received no later than May 31, if May 31 is a business day.Plane sends payroll summaries to admins at the end of the second week of the month. After that, charges are automatically debited. Payroll summaries are also available to admins in their Plane accounts. Payday may vary based on country requirements.
Working Hours
The typical workweek for a full-time employee is 40 to 48 hours per week, with a workday lasting up to 9 hours. Work hours may vary depending on the work being performed and the industry. Workers receive 10.5 hours of rest between workdays, and must receive at least one day off per week.Employees who work more than 9 hours per day or 48 hours per week are entitled to overtime pay at a rate of double their regular hourly wage. Employees working in tourism and travel are not eligible for overtime pay.
Public Holidays
India has three national public holidays:
- Republic Day (January 26)
- Independence Day (August 15)
- Mahatma Gandhi's Birthday (October 2)
Compensation
India has thousands of kinds of minimum wages, based on region, industry, and skill level. Instead of looking for the minimum salary, we recommend using Plane's Remote Compensation Tool to check remote salary data in India by job title.Allowances and bonuses are common, but must be stated in your employment contract. They can be inclusive of the total wage per month or annually. Discretionary bonuses may not exceed 20% of the employee’s annual salary.Employers must keep salary records for three years.
Health Insurance Benefits
India has universal healthcare for its citizens through the Employees’ State Insurance (ESI) healthcare system. ESI is funded by employer and employee payroll contributions. While not mandatory, some employers in India choose to offer private health insurance or a supplementary medical allowance as part of their employee benefits package. Plane helps employers offer supplemental healthcare as a competitive benefit to attract and retain talent.
Sick Leave
After one year of service, employees are entitled to 15 days of paid sick leave. After three days of sick leave, an employee must provide a medical certificate.
Casual Leave
Employees may be entitled to up to 15 days of casual leave if they cannot report to work due to urgent or unforeseen circumstances. Check the labor laws of the region in which your company’s legal entity is located to determine the minimum amount of casual leave employees are entitled to.
Annual Leave
Employees receive one day of paid leave for 20 days of work. Up to 30 days of this earned leave may carry over from year to year. If the employment contract expires before an employee can take annual leave, the employee is entitled to be paid out for unused leave accordingly.
Maternity / Paternity / Parental Leave
Expectant mothers are entitled to up to 26 weeks of paid maternity leave, which can begin six to eight weeks before the expected due date. Surrogate mothers are entitled to 12 weeks of maternity leave. Women who have a miscarriage are entitled to six weeks’ leave. Female employees who adopt a child under 3 months old are entitled to 12 weeks of paid adoption leave.If employers have 10 or more employees, they must pay employees for maternity leave as long as the employee has at least 80 days of service in the previous year.India does not mandate paternity leave, but you may choose to offer paid or unpaid paternity or parental leave as an additional employee benefit.
Employment / Termination
Employers must give 30 days’ notice before terminating an employee on an indefinite employment contract, or make payment in lieu of notice. Employers must give employees on fixed-term contracts at least one week’s notice and the reason for their termination. Employers and employees can mutually agree to terminate their employment contracts without notice, or terminate without notice if they’re in a probationary period.Valid reasons for termination include incompetence, medical inability, and misconduct. Misconduct includes violating employer policies, theft, fraud, absence without leave, and violent or disorderly conduct. Employers must hold a formal disciplinary hearing before terminating an employee for misconduct, but do not need to give notice if terminating for misconduct. Plane employs the practice of Mutual Termination Agreements (MTAs) for involuntary offboarding, which enable employers to terminate employees while minimizing costs and the risk of litigation. This agreement covers unused leave, notice periods, severance, and negotiated terms, in exchange for the employee waiving their right to challenge the termination. It is important to note that Plane does not facilitate unilateral terminations or dismissals, due to risk of litigation that can expose employers to increased damages. Also, the grounds for these terminations may not be valid for an employer of record. We ask that you give us as much notice as possible and involve us right from the beginning of the process (i.e., at least 30 days before termination) so we can better support and guide you through the process. Involuntary termination can take time to negotiate with employees to mutually agree and end on good terms. You can find additional information here on how to terminate an employee.Severance Pay: Employers must notify the Ministry of Labor if planning to make "workmen" redundant and must follow a "last in, first out" principle. Severance pay is required for workmen with at least one year of service, and is 15 days' pay for each year of service. Other employees are not entitled to severance unless their employment contract calls for it.
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*rates for: July 23, 2024
Once you have sorted out the details mentioned above, you can add the employee to the Plane platform. We provide a step-by-step workflow that shows what tasks need to be completed, as well as real-time updates and notifications. This way, you can stay on top of the hiring process at all times. With Plane, you can confidently hire, knowing that you have a powerful platform at your disposal to manage the entire process from start to finish. Here are the instructions for adding a new employee to the platform:
How to hire and onboard an employee
Plane offers a guided process for administrators and managers to hire and onboard their new employees...
Learn moreHiring an employee in a new country can be a complex process, but with the right guidance and resources, it can be a smooth and successful transition. At Plane, we're committed to helping you navigate the process of hiring an employee in India. We'll keep you informed and up-to-date with the latest regulations and employment laws.Best of luck with your new hire, and welcome to India!
Frequently Asked Questions
Here are the answers to some common questions about hiring employees in Spain with Plane:
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