In India, minimum wage regulations are intricate and determined by individual state governments. Unskilled workers face a vast array of employment opportunities, with over 2000 job types and 400 job categories, each assigned a minimum daily wage. Adhering to these minimum wage guidelines is crucial for employers to comply with the relevant authority.
Overtime pay in India is typically calculated at a higher rate, often 1.5 to 2 times the regular hourly wage, and is usually mandatory for factory workers. The standard working hours differ by state but generally amount to around 40 hours per week, from Monday to Friday. The maximum permissible working hours, as per the Shops and Establishments Act, are 48 hours per week.
Mandatory benefits for employees in India encompass contributions towards the Employee Provident Fund (EPF), Employee State Insurance (ESI), and gratuity. Additionally, employers may offer various optional benefits such as health insurance coverage, retirement plans, transportation and meal allowances, and flexible work arrangements. The cost of mandatory benefits typically ranges from 5% to 6% of the employee's gross salary.
Although there is no legal requirement for employers to provide a bonus to employees in India, many companies opt to include annual or performance-based bonuses as part of their compensation packages.
To read more about Compensation & Benefits, download the Master Guide on Hiring in India.
Employers in India usually handle payroll on a monthly basis, following a preferred schedule as outlined below:
Payroll cut-off date: 25th of each month
Payment date: Last day of every month
Individual income tax in India is calculated using a progressive tax rate system, which varies depending on an individual's income slab.
Income Tax Slabs as per the New Regime:
The monthly employer cost breakdown in India typically includes:
Furthermore, employers may need to cover additional benefits. Some of them are:
Read more details about the benefits and associated tax rules in our detailed Master Guide on Hiring in India.
An employment contract/agreement in India should encompass various essential details, including job responsibilities, compensation, benefits, working hours, leave policies, confidentiality agreements, termination procedures, and any other specific terms relevant to the employment relationship.
During the onboarding process in India, employees are typically required to provide the following documents:
In certain cases, additional documents may be requested from the previous employer, such as:
Although having a probation period for new hires in India is not obligatory, employers may choose to implement it. The probation period's duration should be clearly specified in the employment contract, typically ranging from 3 to 6 months. During this period, employers assess the employee's suitability for the role.
While India follows a standard procedure for background checks. Wisemonk offers a physical Background Check service through a KYC (know-Your-Customer) Partner. A person is sent to the candidate’s home address to check his physical presence and run a background check.
Read more about Employment Regulations in our detailed Hiring Guide.
The four major types of Leaves mandated by the Indian law are:
To read more about more types of leaves, download the Master Guide on Hiring in India.
Termination of employment refers to the end of an employee's contract or work relationship with an employer. This can occur under various circumstances and can be initiated by either the employee or the employer.
This occurs when the employer decides to end the employment relationship, often due to reasons such as company downsizing, poor performance, misconduct, or restructuring.
In India, severance pay is not mandatory unless explicitly stated in the employment contract or terms of separation. The entitlement to severance pay depends on the type of termination:
This happens when an employee decides to leave the organization on their own accord.
The notice period in India can vary depending on factors like the employee's position, duration of employment, and terms outlined in the employment contract. Typically, notice periods range from 30 to 90 days.
Read more about Employment Termination in our detailed Hiring Guide.
The Business Visa is designed for individuals intending to engage in business activities in India, such as setting up industrial/business ventures, exploring potential business or trade, sales/purchases, attending technical meetings or board discussions, and other similar activities.
Offers flexibility with 1 to 5-year validity, catering to both short-term and long-term business engagements.
Extendable up to 5 years if the business turnover is at least Rs.1 crore per annum within 2 years of setup.
Upto 180 days and no cumulative maximum stay duration per year
Multiple Entries: Allowed
Tailored for business explorations, meetings, and negotiations, aligning with the needs of U.S. companies expanding in India.
The processing time can vary but is generally around 3-5 working days, depending on the consulate and specific circumstances of the application.
Depending on the type of Business Visa granted, the dependents may be granted B-1 X, B-2 X, B-3 X and B-4 X visa.
Find more details about the duration, allowed activities and restrictions of dependents in our Visa Guide
Fee Structure: The fee for a Business Visa varies depending on the applicant's nationality and the visa duration. For U.S. citizens, the fee is generally structured as follows (as of 2023):
Additional Charges: This may include service fees or processing charges, which can vary depending on the country of application or the agency handling the visa application.
Dependents' Fees: Dependents (spouse and children) applying for an Entry (X) Visa usually pay a fee similar to the Business Visa fee for the primary applicant.
Fees can vary based on the duration of the visa and the nationality of the applicant.
If you are looking for this visa from other countries than the United States, contact us.
The Employment Visa is aimed at foreign nationals who are employed by an Indian company. This includes those who are being transferred to India as part of a company's staff, individuals coming to do voluntary work with NGOs, and expatriates employed in various sectors in India.
Extensions are possible within India, subject to employment continuation.
Continuous stay for the full visa period facilitates uninterrupted work engagement.
Multiple Entries: Offers flexibility for professionals to visit their home country when needed, maintaining international work-life balance.
Directly correlates with the professional's role, ensuring legal compliance and focused expertise.
Restrictions: Ensures that the professional is dedicated to the role they were hired for, maintaining employment integrity.
Processing times can vary but are typically around 2-4 weeks. This duration can be longer if additional documentation or verification is required.
For dependents of Employment Visa holders Depending on the type of Employment Visa granted, the dependents may be granted E-1 X, E-2 X, E-3 X, E-4 X and E-5 X visa.
Fee Structure: Similar to the Business Visa, the Employment Visa fee varies based on nationality and visa duration. For U.S. citizens, typical fees are as follows (as of 2023):
Additional Charges: These may include service and processing fees, differing based on the country of application.
Dependents' Fees: Dependents on an Entry (X) Visa generally pay a fee similar to that of the primary Employment Visa applicant.
The fees are subject to change based on nationality and the specific terms of the visa.
If you are looking for visa from other countries than the United States, contact us.
Download the comprehensive Work Permits and Visa Guide here.