Labour Law & Employment Compliance Services in India for Foreign Companies
India recently consolidated 29 labour laws into 4 new Labour Codes covering wages, social security, industrial relations, and occupational safety — creating major compliance shifts for foreign companies with India-based employees. We help you navigate these changes, ensuring your payroll structures, employment contracts, and workplace policies stay compliant as the new codes roll out across states
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The gap between gross salary and what an employee costs you is wider in India than most foreign employers expect, and the rules sit across central statutes and state-level registrations that vary by where your people actually work.
Statutory contributions and true employer cost
Provident fund and state insurance contributions apply subject to eligibility and wage thresholds, gratuity accrues as a liability over service, and these sit on top of gross salary rather than within it. The labour codes have also changed how wages are defined for contribution purposes, which affects employers who structure compensation with a low basic component and large allowances. Budgeting from gross salary alone consistently understates cost.
Registrations that vary by state
Shops and establishments registration is state legislation, so obligations, renewal cycles and record-keeping differ depending on where your office sits. Professional tax applies in some states and not others. Employers opening a second location frequently assume their existing registrations extend and discover they do not. Each new state of operation should be treated as a fresh compliance footprint.
Employment contracts, fixed-term and permanent
Indian employment is contract-based but overlaid with statutory protections that cannot be contracted away. Fixed-term employment is permitted and offers flexibility, but carries entitlement parity with permanent staff and cannot be used to disguise what is genuinely ongoing work. Contracts drafted to a home-country template routinely contain notice, termination and restraint provisions that are unenforceable in India, which is discovered at exactly the wrong moment.
Termination, notice and exit
Termination requires notice or pay in lieu, settlement of accrued entitlements including gratuity where service qualifies, and in some circumstances statutory process beyond the contract. Full and final settlement has its own timeline and documentation. Disputes in India tend to be slow rather than expensive, which makes a clean, well-documented exit process considerably cheaper than defending an inadequately documented one.