FAQ: Employment Compliance India

India's four new labour codes — Wages, Industrial Relations, Social Security, and Occupational Safety — consolidate 29 existing laws and introduce a uniform definition of 'wages' that will require restructuring compensation so basic pay is at least 50% of total cost-to-company, directly affecting PF and gratuity calculations once fully implemented across all states.  Read full answer →

An India employment contract must comply with the applicable state Shops & Establishments Act and the new labour codes as they roll out, and should clearly define wages and their breakdown, working hours, leave entitlements, notice period, and termination grounds — verbal or informal arrangements leave both employer and employee exposed if a dispute arises.  Read full answer →

An employee becomes eligible for gratuity after completing 5 years of continuous service with the same employer, and it's calculated as 15 days' wages (based on the last drawn basic salary plus dearness allowance) for each completed year of service, payable on resignation, retirement, termination, or death.  Read full answer →

Provident Fund (PF) registration becomes mandatory once an establishment has 20 or more employees, and Employee State Insurance (ESI) becomes mandatory at 10 or more employees in most states — both apply from the date the threshold is crossed, not from a later compliance deadline, so hiring plans should account for this trigger in advance.  Read full answer →

Termination in India requires following the notice period and process specified in the employment contract and applicable state law, documenting the grounds (performance, conduct, or redundancy), and paying full and final settlement including any accrued leave, gratuity, and notice pay — skipping documented process is the most common source of wrongful termination claims.  Read full answer →