The Indian peninsula is separated from mainland Asia by the Himalayas. The country is surrounded by the Bay of Bengal in the east, the Arabian Sea in the west, and the Indian Ocean to the south. Stretching 3,287,240 square kilometers, it comprises 28 states and seven union territories. India shares borders with Pakistan, Nepal, China, Bhutan, Myanmar, and Bangladesh. The country is a sovereign, socialist, secular, democratic Republic with a parliamentary system of government. It is among the four fastest-growing emerging economies. The Indian workforce is spread in agriculture and related activities (42.6%), with the rest evenly distributed in the manufacturing and services sectors.


*Please note that the official currency is the currency of remuneration when employed through WorkMotion in India.

Hauptstadt :
New Delhi
Währung :
Indian rupee (₹, INR)
Gesprochene Sprachen :
Hindi and English
Einwohnerzahl :
1.35 billion (2022 est.)
Mindestlohn :
Differs from state to state, ranging between 372 INR and 853 INR per day.
Lebenshaltungskostenindex :
$ (137 of 139 nations)
Payroll Frequency :
Mehrwertsteuernormalsatz :
reales BIP-Wachstum :
-7.3% (2020 est.)

Statutory Holidays

The holidays mentioned below are valid for the year 2022.

Republic Day (January 26), Independence Day (August 15), and Gandhi Jayanti (October 2) are the three national days on which all businesses close. Other holidays are observed in respective regions. The number of public holidays depends on the state in which operations are located and can vary between 8-10. 

The table below provides an indicative list for the state of Maharashtra. Generally, a list of holidays is published by the state government every year, and employers are required to choose the holidays they will observe.

Employees who are required to work on a public holiday are entitled to extra premium pay, or substitute holiday according to the applicable state Shops and Establishments Act.

Holiday Name
Extra Information
January 1
New Year’s Day
January 26
Republic Day
National Day
March 18
April 15
Good Friday
May 1
Labor Day
May 3
July 10
Id-ul-Zuha (Bakrid)
August 11
Raksha Bandhan
August 15
Independence Day
National Holiday
August 19
October 2
Gandhi Jayanti
National Holiday
October 5
Dussehra (Vijayadashami)
October 24
Diwali (Deepawali)
November 8
Guru Nanak's Birthday
December 25

Contract Sharing Time

The approximate time for sharing the contract with an employee in India is 4 business days assuming no special requests or changes to our standard employment contract.

Our team ensures compliance with local employment legislation, as well as a quick and efficient onboarding process. The minimum onboarding time begins from the moment that WorkMotion has received all required information from both the client and the employee.

For more complex onboardings, this time may increase depending on the selected bouquet of contract inclusions and the right-to-work status of the employee.

What You Need To Know

  • Industrial establishments with 300 or more workers are required to obtain prior permission from the government to lay off or retrench workers or close an industrial undertaking.
  • Allowances are capped at 50% of the basic salary.
  • Because of the religious and cultural diversity of Indian society and the associated celebrations, employment laws allow an employee to choose holidays from a given list of options.
  • None of the leave (annual, casual, sick, etc.) is claimed through the state authority or social insurance agency.
  • A minimum bonus of 8.33% of the average salary is payable by every industry and establishment that employs more than 20 employees based on earned profits.

Labor Conditions

Working Hours

Adults (those who are 18 years of age or older) cannot work for more than 48 hours per week or nine hours a day. The spread should not exceed 10-12 hours. No worker should work for more than five hours before they have had an interval of rest of at least half an hour.


Where an employee whose minimum rate of wages has been fixed by the hour, by the day, or by such a longer wage period as may be prescribed, works on any day in excess of the number of hours constituting a normal working day, the employer pays them for every hour or part of an hour so worked in excess. The rate of pay used is not less than twice the normal rate of wages.


Probation Period

Probation is not mandatory. General practice is three to six months depending on the seniority of the position. During the probation period, the contract can be terminated by either party without notice.

Termination Notice Period



Termination of employment and the notice thereof to be given by the employer and the employee is to be provided under an establishment’s Standing Orders in line with the Industrial Relations Code 2020. The Code does not specify the time of the month for giving notice.

Termination notice differs in individual states ranging from 14 days for employees with less than one year’s service to 30 days. Notice period also varies as per the cause of termination:

Termination Cause
Notice Period
Disciplinary dismissal
As per the employment contract or employment policy.
Retrenchment (300 or more workers)
All employees with over 1 year’s service must be served with 3 months’ notice in writing. Employees also receive compensation equivalent to 15 days average pay for every completed year of continuous service or any part thereof, in excess of six months.
Closing down of business
All employees with over a year’s service receive the same notice and compensation as retrenched employees.

Leave / Time Off

Annual Leave

Leave entitlement varies across industries and in different states. The Factories Act, which is applicable for most companies, prescribes one day for every 20 days of work, for employees who have worked for 240 days in a given year. Leave entitlement varies across industries and in different states.

Sick Leave

Sick leave provides pay to employees when they are out of work due to illness. In India, sick leave varies from state to state. Generally paid sick leave ranges between seven to 15 days per 12 months of continuous service. Where there is no sick leave, employees use casual leave in lieu of sick leave.

Where there is paid sick leave, the pay ranges from half a month’s pay to full pay. An employee is required to submit a medical note with their application for leave.

Qualifying periods for sick leave range between one month and 12 months of continuous service.

Parental Leave

Maternity Leave

Maternity leave is mandatory for the employer to provide, and female employees are entitled to 26 weeks of paid maternity leave. A woman who already has two or more other children is only entitled to 12 weeks of maternity leave, six of which are for prenatal leave. To qualify for maternity leave, the woman must have served the employer for at least 80 days in the 12 months before applying for the leave. A female worker who is on maternity leave is entitled to a medical bonus of 3,500 INR.

Paternity Leave

There is no legal requirement for private-sector employers to offer paternity leave.

Other Types of Paid Leave

Casual leave is paid leave that is granted for a certain unforeseen situation, including sickness. In most states, employees are also entitled to casual leave that can be taken usually for a maximum of three days in cases of emergency. In some states casual leave is used in lieu of sick leave, in others, it is used to augment sick leave.

Unused casual leave is not carried forward to the following year or 12 months period nor can it be exchanged for cash.

Unpaid Leave

There is no statutory provision for unpaid leave in India. However, the employer may authorize an employee at their discretion.

Statutory Benefits

India’s social security consists of the Employees Provident Fund (mandatory if the company has over 20 employees), the Miscellaneous Provisions Act, Employees State Insurance, and a pension scheme. It covers pension, health, injury, and unemployment. 

If the employee count is less than 20, the company can opt for voluntary PF registration if the majority of the employees give consent for such registration. The social security contribution rates as per January 2022 are:

Category of Contribution
Employer Contribution
Pension Fund
8.33% of monthly payroll, capped at 15,000 INR
Provident Fund
3.67% of monthly payroll
Employees' Deposit Linked Insurance Scheme
0.50% of monthly payroll for employees with a monthly income less than 15,000 INR.
Employees' State Insurance scheme
3.25% of monthly payroll for employees with a monthly income less than 21,000 INR.

Health Insurance

Employee State Insurance (ESI)

The ESI scheme applies to all factories and other establishments that employ at least 10 persons. Also, the beneficiaries‘ monthly wage should not exceed 21,000 INR for them to be covered under the scheme. Under the ‘Employee State Insurance Act’, workers are entitled to sick pay at a rate that varies but equates to about 70% of the average daily pay rate for a maximum of 91 days in a year. In order to qualify for sickness benefit, the beneficiary is required to contribute for 78 days in a contribution period of six months.

​​Funeral expenses of 15,000 INR are also payable to the dependents or to the person who performs the last rites. This benefit is liable for employees from day one of entering insurable employment.

Other Insurances

Accident Insurance

The Personal Injuries (compensation insurance) Fund is paid by the employer. If a personal injury is caused to an employee by accident arising out of and in the course of employment, the employer is liable to pay compensation. The amount of compensation depends on the level of injury.

Unemployment Insurance

Employees’ State Insurance Corporation (ESIC) offers two unemployment benefits schemes – Rajiv Gandhi Shramik Kalyan Yojna (RGSKY) and Atal Beemit Vyakti Kalyan Yojna (ABVKY). The RGSKY provides an unemployment allowance equal to 50% of wage for a maximum period of two years to a beneficiary who has become unemployed after being insured for three or more years. The beneficiaries are also extended medical care for self and family from ESI hospitals/dispensaries, vocational training for upgrading skills, and expenditure on fee/traveling allowance.

The ABVKY provides a relief payment of 50% of wages up to 90 days, once in a lifetime. The beneficiary should have been in insurable employment for a minimum period of two years immediately before their unemployment.

Public Pension

The retirement age in India is 60 years.

Retired employees get pension benefits from the Employees‘ Provident Fund Scheme (EPF), the Employees‘ Pension Scheme (EPS), and the Employees‘ Deposit-Linked Insurance Scheme (EDLI).

Other Statutory Benefits


Gratuity is payable to an employee by the employer on the termination of employment after serving for at least five years or on superannuation, retirement, or resignation, or due to death or disablement due to accident or disease. The completion of continuous service of five years does not apply where the termination of the employment is due to death or disablement.

The Gratuity Act provides for payment of gratuity for every completed year of service or part thereof in excess of six months, at the rate of 15 days’ wages based on the wages last drawn.


Nursing breaks for mothers:

Every woman delivered of a child who returns to duty is allowed two breaks of such duration as may be prescribed by the Central Government for nursing the child until the child attains the age of 15 months.

Crèche facility:

Every establishment with 50 employees (or as prescribed by the Central Government), should have a crèche facility within a prescribed distance. The employer should allow a nursing mother four visits per day to the creche.


The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.

Information provided in this Country Guide is provided “as is” without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, or non-infringement. WorkMotion Software GmbH periodically adds, changes, improves, updates, or removes information without notice, and assumes no liability or responsibility for any errors or omissions in the contents of this Country Guide. This Country Guide may contain links to other websites. WorkMotion Software GmbH disclaims all liability for the privacy practices or the content of such websites.

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