HR Policies in India 2026: The Complete List & Guide

Which HR policies does an Indian workplace actually have to have in 2026?

Seven, and roughly twenty by the time you have a real team. India runs a two-layer system: four Labour Codes and their Central Rules on top, state Shops and Establishments rules underneath. A policy that passes an audit in Bengaluru can fail one in Pune.

Below is the mandatory seven, the full working list, what changed in 2026, the penalties, and how to roll it all out. If you are hiring your first people there, start with our guide on how to hire employees in India.

What are HR policies?

HR policies in India are the formal, documented rules that govern how an organisation manages its people across the whole employment cycle, from recruitment and pay through conduct, leave, safety and exit. They translate India's labour law into company rules, define what employer and employee each owe, and give you documented proof of compliance the moment an audit or a dispute arrives.

For the wider rulebook these policies sit inside, see our 2026 labor law compliance playbook.

Why do HR policies matter for companies in India?

From our experience providing global onboarding for 300+ companies, the businesses that treat HR policies as a living system rather than a one-time document are the ones that avoid disputes as they scale. The legal environment here is dense, layered and changes often, and clear rules are also what build trust in a growing workforce. Here is what a documented set actually delivers:

• Legal compliance and risk mitigation: Your policies are the first document an inspector asks for, and they have to line up with the four Labour Codes, the Central Rules notified in May 2026, and your state's Shops and Establishments rules. To go deeper, reference our guide on statutory compliance in HR in India.
• Consistency and trust: Standard rules mean people are treated the same regardless of department, location or seniority, which removes bias and lifts retention.
• Labour Code readiness: The Codes have been live since November 21, 2025 and the Central Rules landed in May 2026, so companies still running old wage structures face reclassification, PF mismatches and penalty exposure. Our India statutory compliance checklist after 10 employees shows where most teams first fall behind.

All three depend on the policies sitting on the right legal foundation, so the statutory framework is worth understanding first.

What is the Indian statutory framework behind HR policies?

The Indian statutory framework behind HR policies is a dual structure: central laws set the floor nationwide, while state governments can modify thresholds, forms, and timelines on top of them. A policy that is compliant in one state may therefore need adjustment in another.

Three of the oldest statutes are now formally gone. The Trade Unions Act 1926, the Industrial Employment (Standing Orders) Act 1946 and the Industrial Disputes Act 1947 stand repealed from November 21, 2025, a repeal Parliament put beyond doubt through the Industrial Relations Code (Amendment) Act on February 12, 2026. What remains is four Labour Codes from the Ministry of Labour and Employment, plus the state Shops and Establishments Acts that still govern most offices.

So HR teams have to know which provisions apply in each operating state. Our breakdown of labor law in India for foreign companies maps this out by code.

What are the mandatory HR policies in India?

The mandatory HR policies in India are the seven every employer has to operationalise to satisfy central and state labour law: an appointment letter, wages, working hours and overtime, statutory leave, POSH, grievance redressal, and health and safety. These are driven by statute rather than best practice, and they form the baseline any inspection expects to find. Here is each one in turn.

1. Employment contract or appointment letter

The employment contract is the document every audit starts with. It records title, duties, reporting line, compensation, pay cycle, notice period and termination conditions, and a clear one also cuts misclassification risk, a topic we cover in our guide to protecting your intellectual property when hiring in India.

Under Rule 6 of the OSH (Central) Rules 2026, every employer must hand a written appointment letter to every worker before they join, whether permanent, fixed-term, contract or gig, and regardless of headcount. Verbal-only arrangements are finished, and most inspections open by asking for this document.

Replying to the debate on the Industrial Relations Code (Amendment) Bill in February 2026, Union Labour Minister Dr Mansukh Mandaviya put it plainly: “To every such youth who gets a job, an appointment letter must be given under all circumstances.”

2. Wages and salary policy

A wages and salary policy ensures compliance with minimum wage rules, on-time payment, and lawful deductions under the Code on Wages and earlier wage statutes. It should cover minimum wages by state and role, payslip requirements, payment timelines (monthly wages by the 7th of the following month), and permissible deductions. For current rates, reference our India minimum wage guide.

The change that matters most: under the Code on Wages, wages (basic plus dearness allowance) must be at least 50% of CTC. Many employers used to structure basic at 35 to 40% to hold PF contributions down. Our Code on Wages glossary entry explains the definition in full.

Moving to 50% raises employer PF cost and lowers take-home pay. The EPF wage ceiling itself stayed at ₹15,000 a month, confirmed by gazette notification S.O. 2702(E) on May 29, 2026, so the higher basic flows straight into a larger contribution base rather than a new threshold. Model it with our salary calculator before your next offer goes out.

3. Working hours and overtime policy

A working hours policy turns India's limits on daily and weekly hours, rest days and overtime into company rules. The standard is 8 hours a day and 48 hours a week, with overtime paid at twice the ordinary wage rate.

The number that changed in 2026 is the overtime ceiling. Under the OSH (Central) Rules notified on May 8, 2026, overtime is capped at 144 hours a quarter for establishments in the central sphere. Establishments under state jurisdiction stay on their existing cap, anywhere from 50 to 125 hours, until that state notifies its own rules. Our guide to India's overtime laws tracks both.

Several states have stretched the working day while holding the 48-hour week. Karnataka allows up to 10 hours a day including overtime, Telangana moved commercial establishments from 8 to 10 hours from July 8, 2025, and Maharashtra now permits a 10-hour day with a 12-hour spread-over and 144 overtime hours a quarter. Confirm your state's notification before you sign off a shift roster.

4. Statutory leave policy

A statutory leave policy sets out earned or privilege leave, sick leave, public holidays and maternity benefits. Typical baselines are earned leave of roughly one day for every 20 days worked, sick and casual leave per state rules, and 26 weeks of paid maternity leave for the first two children with 12 weeks thereafter. That 26-week entitlement now flows through the Code on Social Security, which absorbed the Maternity Benefit Act 1961.

Paternity leave is still not a central mandate, though documenting one reduces attrition risk. Entitlements are otherwise fixed state by state, which is where multi-state teams come unstuck. Read: leave policy laws and holidays in India.

5. Sexual harassment policy (POSH Policy)

A POSH policy is mandatory under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. Every employer with 10 or more employees must constitute an Internal Committee, define the complaint process, close complaints within 90 days and report annually. The definition of workplace now reaches video calls and off-site work events, so committee members need to handle virtual complaints and digital evidence.

Two duties have tightened. Internal Committee registration on the government's SHe-Box portal is now expected of every workplace, and the annual report to the District Officer falls due by January 31. The pressure traces back to the Supreme Court's ruling in Aureliano Fernandes v. State of Goa, which flagged serious lapses in POSH implementation and has been reinforced by follow-up orders through January 2026. To see how this works when you hire through a partner, read is your global EOR handling POSH and the S&E Act in India.

6. Grievance redressal mechanism

A grievance mechanism gives employees documented channels to raise and escalate concerns. Under the Industrial Relations Code, establishments with more than 20 workers must constitute a Grievance Redressal Committee with equal employer and worker representation, and it must resolve disputes within 30 days of receipt. Build the committee and the timeline into the policy from day one.

7. Health and safety policy

A health and safety policy covers safety standards, risk prevention, emergency protocols, audits, PPE and welfare provisions such as sanitation, drinking water and first aid. The change that catches services firms is coverage: software and services companies with 10 or more workers are now explicitly in scope under the OSH Code, so they must run formal safety programmes, document welfare provisions, and provide crèche facilities once they reach 50 employees.

The statutory floor under each of these is set out in HR compliance in India for foreign employers, and it is worth reading first, because a policy that contradicts the statute is worse than no policy at all.

Most of these obligations should already appear in the contract itself. Read: what belongs in an India employment agreement.

What is the full list of essential HR policies for Indian companies?

Beyond the mandatory seven, essential HR policies are the documented rules that are not all strictly required by statute but become unavoidable as headcount grows, because they are what keep decisions consistent and disputes rare. The table below is the complete working list Indian companies build a handbook around, grouped by function so nothing gets missed.

Code of conduct, ethics and equal opportunity

A code of conduct defines acceptable behaviour, integrity expectations, conflict-of-interest rules and disciplinary consequences, and given the Prevention of Corruption Act 1988 it should carry explicit anti-bribery provisions. Pair it with an equal opportunity commitment covering gender, caste, religion, sexual orientation and disability. The Rights of Persons with Disabilities Act 2016 makes reasonable accommodation a legal obligation, and caste is worth naming rather than leaving implied.

Recruitment, attendance and onboarding

A recruitment policy documents how hiring decisions get made and formalised, from job posting through appointment letter and probation, while the attendance policy sets schedules, absenteeism rules and the link to payroll. Background checks touch personal data, so pair verification with a privacy notice and a recorded lawful basis rather than a bare consent tick-box. Our list of background verification companies in India is a useful reference.

Read: employee onboarding in India, a 2026 legal and payroll checklist, for the documents that have to exist before day one.

Compensation structure and benefits

A compensation policy explains fixed and variable pay, bonus and incentive criteria, and statutory benefits. Employees on basic pay up to ₹15,000 a month are covered under EPF with a 12% employer contribution, and ESI applies up to ₹21,000 a month at 3.25%. With the 50% basic rule, some employees who sat outside these thresholds now qualify, so audit your registers.

To see how cross-border pay works in practice, read how to pay employees in India from the US.

Data security, confidentiality and privacy (DPDP)

A data privacy policy governs how employee data, company information and IP are handled. The Digital Personal Data Protection Act 2023 is administered by MeitY, and the DPDP Rules notified on November 14, 2025 are what turned the Act into day-to-day HR work. Here is what an HR team actually owes:

• A plain-language privacy notice setting out what employee data you hold and why.
• A recorded lawful basis. Routine employment processing such as payroll, PF, ESI and TDS sits under the Act's legitimate uses, so consent is not the default route for it.
• Retention and deletion rules, so data goes once the purpose it was collected for is served.
• A Data Protection Officer if you are notified as a significant data fiduciary.

The runway is shorter than it looks. The Consent Manager framework goes live on November 13, 2026 and full compliance is due by May 13, 2027, so 2026 is the year to build the notice, the data register and the deletion workflow.

Performance, moonlighting, BYOD and ESOPs

A performance policy sets review cycles, rating frameworks, improvement plans and development, and if you use AI-driven performance tools it should require a human manager to sign off any decision built on an AI output. Around it sit the policies newer workplaces now need: moonlighting rules for outside work, BYOD security for personal devices, ESOP grant and vesting terms, and inclusive leave for menstruation, bereavement or pregnancy loss. Adopt the ones that fit your workforce instead of copying a template.

Remote and hybrid work

A remote work policy defines eligibility, availability, approved devices, data security and communication norms. Document that remote staff keep a safe, ergonomic setup, since the OSH Code's reach over home-based work is still evolving, and spell out reimbursement for internet and hardware before it turns into a taxable perquisite argument. Our guide to building a work from home policy in India has the clause list.

IT use, social media and whistleblowing

Set out permissible use of company devices and networks, limits on sharing confidential information online, and the disciplinary consequences. Any employee monitoring has to be disclosed in your privacy notice before it starts. Alongside it, a whistleblower policy needs an anonymous channel, an investigation protocol, a non-retaliation guarantee and escalation to the audit committee. Listed companies must maintain a formal vigil mechanism under SEBI LODR Regulations 2015.

Travel, expense and exit

A travel and expense policy defines eligible spend, approvals, allowance limits aligned to Income Tax exemptions, and settlement timelines. An exit policy covers resignation procedure, notice periods, settlement timelines and asset recovery. Our guide to full and final settlement in India covers the timelines that get disputed most.

Note one Labor Code change: under the Industrial Relations Code 2020, fixed-term employees become eligible for gratuity after just one year of service, against the five-year rule for permanent staff. You can estimate amounts with our gratuity calculator.

Employee handbook

The handbook is where every policy above comes together in one searchable document covering company values, HR procedures and employee responsibilities. Publishing it on the intranet and collecting written acknowledgement from each employee is the single most useful step for both clarity and legal defensibility.

Two of these carry hard statutory minimums a template will not get right. Maternity leave in India runs to 26 weeks with no room to negotiate, and termination pay is bounded by statute rather than by whatever your US template says.

Read: how to terminate remote employees in India, for the notice and pay rules that actually hold up.

What should an HR policy manual in India contain?

An HR policy manual in India is one controlled document carrying every policy, its version date and each employee's acknowledgement record. Auditors and labour courts look at the manual, not a folder of old emails, so a manual that holds up usually runs in this sequence:

1. Welcome note, company values and the manual's scope.
2. Definitions, including who counts as a worker, an employee and a fixed-term employee under the Codes.
3. Appointment, probation and confirmation terms.
4. Compensation, payslips, permissible deductions and reimbursements.
5. Working hours, attendance, holidays and every leave type you offer.
6. Conduct, POSH, anti-discrimination and the disciplinary procedure.
7. Data privacy, IT use, confidentiality and IP assignment.
8. Grievance redressal and the whistleblower route.
9. Separation, notice, full and final settlement and asset return.
10. Version history, approval date and the acknowledgement page.

Number the versions and date every revision. A policy nobody can prove was published on a given date is very hard to enforce.

What are the four new labor codes in India?

The biggest change to this whole framework arrived in late 2025 and it touches almost every policy above. India's four Labour Codes came into force on November 21, 2025, consolidating 29 central labour laws into a single framework.

The rollout moved again in 2026. Draft Central Rules were gazetted on December 30, 2025, and the final Central Rules under all four Codes were notified on May 8 and 9, 2026. Our overview of India's new Labour Codes tracks the rollout.

Four priorities trip employers up most: apply the 50% wage definition and model the PF impact before your next salary revision, give fixed-term staff the same benefits as permanent roles with gratuity after one year, register establishments with 20 or more workers for a Grievance Redressal Committee, and bring services firms with 10 or more workers under safety audits and the crèche rule at 50.

For the full clause-by-clause breakdown and rollout tracking, read our guide to the new labour code in India.

State rules are the piece still in motion. Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra and Arunachal Pradesh have notified final state rules, and the rest sit in draft or pending. Until your state notifies, the older state thresholds keep applying to establishments in its sphere, which is why two offices can legitimately follow different overtime caps this year.

Compliance detail still depends on each state notifying its own rules under the Codes. This information is general guidance as of August 2026. Consult legal counsel for your specific situation.

Which Indian labour laws are repealed and which still apply?

Consolidation did not wipe the slate clean, and knowing which statute you are actually citing matters the moment a policy is challenged. The table below splits the old law into what is gone, what has moved, and what still stands on its own.

Keep the POSH Act and your state Shops Act on the compliance calendar as separate line items. Everything else you should now be citing by Code, not by the old Act name, because a policy that quotes a repealed section invites the argument you were trying to avoid.

What are the penalties for HR policy non-compliance in India?

Non-compliance carries real financial and in some cases criminal consequences, which is what makes a documented policy set a risk control rather than paperwork. Social security arrears are the most common exposure, and our guide to PF, ESI and gratuity compliance covers those. Even one missed obligation below can outweigh the cost of a professional policy review.

What is the state-specific HR compliance spotlight in India?

National rules are only half the picture. Central laws apply everywhere, but states modify thresholds, forms and timelines on top of them, so multi-state employers have to track each operating state separately. The table below spotlights ten states most foreign employers encounter, with the rules that most often catch them out.

Confirm the current notification in every state you operate in before finalising a policy, because thresholds and rates move on their own cycles.

Read: India payroll deadlines, a monthly compliance calendar, for the filing dates that sit underneath these rules.

How do HR policies differ for startups, IT companies and MNCs in India?

The mandatory policies are the same at every size. What changes is how much sits on top and which statutory thresholds you have already crossed, because almost every obligation in India switches on at a headcount number rather than at a revenue figure.

The common mistake sits in the last row. Lifting a parent-company handbook wholesale imports clauses that simply do not work here: at-will employment has no basis in Indian law, and a 14-day notice period will not survive a challenge.

Read: compliance checklist for startups hiring full-time employees in India.

How do you create and implement HR policies in India?

Having helped onboard more than 2,000 employees in India, we have found policy work only lands when it runs as a sequence rather than a scramble. These seven steps cover both drafting and rollout, so the rules take effect instead of sitting in a drawer:

1. Map the legal requirements: List the central and state obligations that apply in each location before drafting a word.

2. Match them to your business: Review headcount, structure and operating model so each policy is practical rather than aspirational.

3. Draft in plain language: Use one consistent structure of purpose, scope, policy statement, definitions and procedure. Avoid jargon.

4. Get legal review and leadership sign-off: Counsel checks enforceability, and formal approval is what makes the policy stick across the company.

5. Communicate and train: Roll out through the handbook, onboarding and the intranet, and train managers to apply the rules the same way.

6. Collect written acknowledgement: A signed or digital confirmation from every employee is your first line of defence in any dispute.

7. Review and update regularly: Refresh after any legislative change and at least once a year. With the Central Rules notified in May 2026 and state rules still landing, re-audit every policy this year and put quarterly checkpoints on the calendar.

Exit terms are the clause most often drafted wrong, usually by importing a notice period from a US template. Notice period rules for remote employees in India covers what is actually enforceable.

One line from Dr Amitava Ghosh's LinkedIn post on HR policies in India is worth pinning above the drafting table: “Companies need to strike a balance between their own best practices and local norms.” That balance is the most common failure in policy sets written from abroad.

Some organisations run all of this natively through an HRMS; others hand the hardest layers, payroll and multi-state compliance, to a specialist. Our comparison of the best payroll outsourcing companies in India lays out the options.

If you are still choosing an employment model, our guide to PEO services in India covers the co-employment route. Whichever way you go, the goal is the same: keep every policy current without burning out a two-person HR team.

How Wisemonk helps with HR policies and compliance in India

Wisemonk is an India-native Employer of Record. We help you hire, pay and manage talent without setting up a local entity, and we carry the compliance detail so your team does not have to. Here is what that covers:

• Policy drafting and compliance: We draft the mandatory seven policies and the essential layer around them, constitute ICCs and GRCs, and track state-by-state Shops and Establishments rules for you.
• Managed payroll: Payroll runs restructured under the Code on Wages, with EPF, ESI and the 50% basic pay rule handled end to end.
• Recruitment: Sourcing, screening and offer management, with background verification consent and privacy notices built into the workflow.
• GCC setup: Stand up a global capability center with entity, hiring, and compliance managed together.
• Build-versus-buy tooling: Weigh your options with our EOR vs entity calculator before you commit either way.
• Landed cost estimates: Model the fully loaded cost of a hire with our employee cost calculator.

What changed for clients who handed India HR compliance over

Senem RFP, United States. A US company with employees in India and no local HR function. We onboarded the whole team in one to two days and ran health cover enrolment directly with each employee. Founder and CEO Frank Menes: “All salary payments are timely. I would highly recommend Wisemonk and think of them as our Indian HR department.”

Minehub, Canada. A Canadian company running an India team with statutory filings sitting on the finance team's desk. CFO Monika Russell: “They've handled everything from payroll and statutory compliance to equipment procurement and benefits enrollment, with a level of responsiveness that makes managing a remote India team from Canada feel seamless.”

The pattern in both is the same. Once the policies, the filings and the state-level tracking sat with a team that does it daily, they stopped being a founder's problem.