- Overview: India
- Global HR Compliance
- Global PEO and payroll
- Visa, work permit & immigration support
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in India
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in India Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of India and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in India as well as in other 180+ countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in India instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in India .
We are experts in global workforce employment in India, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in India.
Hiring and Firing Workforce in India Guide
With the European economy sliding into recession and China making it harder for foreigners to penetrate its market, many entrepreneurs have started to give Indian market serious consideration. No doubt India was ranked low among the easy-to-do-business countries. However, over the years, India has shown a steady improvement in its economy, especially with regard to its GDP and economic policies. Moreover, it is projected to be one of the fastest growing economy with the largest consumer market in the world.
Below are other vital facts you should know about doing business in India.
#1 Employment Contracts
Letter of appointment is generally, considered an implicit contract in India, maybe owing to the fact that they both have the same content. Notwithstanding, it is advisable for the employee to see to it that all that have been agreed upon, including details about his roles and responsibilities, length and commencement date of the employment, trial period, remuneration and benefits and contract termination, is included in the appointment letter/contract for future reference. Hence, the newly employed is expected to start work with or without a contract, after receiving the letter of appointment. Except for some special cases, employment contract can be in any form other than in writing.
# Minimum employment rights
# Hours of work
The normal daily hour limits range from between eight to nine hours, and the usual weekly limit is 48 hours. Also, working during holidays or Sundays is not allowed except of course it is based on mutual consent. In that case, the employer is obligated to give the employee a commensurate time off within first two months the work was done. Employees are entitled to take a minimum of 30-minute break after every 5 consecutive hours and cannot work more than 10 days straight away without a break.
# Probation period
Probation period is usually 6 months however it can be extended by a period of three months at a time at the discretion of management.
# Annual leave
India has a huge range of holidays and the number and type that should be observed by an employee depends on the employees’ faith, organization and region of employment. Nonetheless, all employees are entitled to take holidays during Republic Day, Independence Day and the Mahatma Gandhi’s Birthday with any other choice holidays (Christmas Eve and New Years’ Day inclusive) from the list of prescribed holidays. Likewise, all employees are eligible for annual paid leave which varies in length depending on the industry and state of employment. If either by unilateral or bilateral decision, the contract was cancelled before the annual leave was used up, the employer will be required to compensate the employee (in cash) for the used leave.
The annual leave usually ranges from 12 to 21 days’ holiday per year.
# Parental leave
Female employees are entitled to 26 weeks of paid maternity leave during their first two childbirth, and 12 weeks thereafter. The former includes 8 weeks’ prenatal leave and 18 postnatal, while the later is evenly divided before and after childbirth. Commissioning or adopting mothers are entitled to a 12-week leave from the day they welcome the new baby whereas employees who have miscarriages or abortion are entitled to 6 weeks’ paid leave.
All female employees are entitled to an extra month leave if they encounter complications during childbearing.
# Sick leave
Sick leave varies in length depending on the Act regulating the leave entitlement. Working Journalist, Other News Paper Employee’s and Miscellaneous Act provide a 30-day sick leave for employees working in those spheres, Sales Promotion Employees Acts make a provision for at least 1/18th of the employees’ years of service to a company, while apprentices, under Apprentices Act have the right to a minimum of 15 days’ sick leave.
The normal maximum hours an employee is expected to work is 9 hours. Thus, any hours of work beyond this normal maximum is considered an overtime and must be compensated for. The standard overtime rate is 200% of the employee’s hourly wage (the sum of the basic wage and the normal wage, without any extra payments like bonuses).
# State minimum salary
There is no substantive law on the minimum wage an employee is entitled to. Rather, the Central and State government tries to regulate the wage rate of those class of employees (in unorganized sectors) who can easily be exploited by their employers. Wages for workers in enterprises or industries involving large scale operations are usually subject to negotiation negotiate between the employers and the employees. Be that as it may, the Minimum Wages Act recommends that all employers should pay a minimum wage of Rs160 to their employees.
Varied from 160 rupees ($2.40) per day in Bihar to 750 rupees ($11.31) per day in Kerala.
# Employment termination
An employee can be dismissed anytime but when he is on leave. Employees who receive their wage on a monthly basis are entitled to a 30-day notice period (or a 2-week notice for those paid on an hourly, daily or weekly basis) and a fair hearing (in writing) before being dismissed. Payment is also acceptable in lieu of 30 days’ notification. If the cause for the contract termination is an unethical practice(s), then the employer will not be obligated to provide any notice, hearing or payment. In case of downsizing, the employee who is dismissed after his one year of service to the company is eligible for a redundancy pay amounting to 15 days of his wage for every year of service. Moreover employers are required to pay out all the employee’s wage within the 2 days of his dismissal.