Why hire in India?

December 17, 2021

hiring in India

Colorful revelry, cultural diversity and economic potential reach far and wide

Celebration is a way of life in India, with festivals and fairs occurring across this vast country seemingly daily. Some commemorate the start of a new season, while others recognize religious deities or symbols. And though there’s no festival marking the country’s ascension as the highest ranked economy in South Asia and advantages of globalization, they do give India—and organizations looking to do business there—reason to celebrate.

Laws and norms to consider when hiring in India

If hiring in India is on your radar, it’s important to consider how labor laws, recruitment and hiring practices, and cultural norms can affect your growth and workforce strategy. Here are a few factors your HR team or hiring manager should weigh:

  • Working hours: Under India labor laws, the normal workweek is 48 hours, with a limit of 10.5 hours of work in a day. Employees cannot work for more than five consecutive hours without a 30-minute rest break, and they cannot work for more than 10 days in a row. If work is required on Sundays or holidays, there must first be a prior agreement, and employees who work on Sundays or holidays must be provided time off equivalent to those days within two months.
  • Mandatory bonuses: As part of the compensation structure in India, employees are entitled to a minimum annual bonus of 8.33% of their annual wages—regardless of whether their employer is making no profit or running losses. Under the employment law, the maximum bonus allowed is 20%, and the percentage the employer applies must be the same for all eligible staff.
  • Equality: Under the Indian Equal Remuneration Act, employers are required to follow gender diversity hiring practices. This means companies should provide men and women equal pay for equal work, and they are prohibited from discriminating on the basis of sex in hiring, employment and recruiting decisions.
  • Vacation: As part of the employee benefits policy in India, non-factory employees, vacation leave entitlements—referred to as “annual” or “privilege” leave—are governed by the Shops and Establishments Act and vary from state to state, but workers can generally expect 15 to 30 days of leave. Factory workers, protected by the national Factories Act, receive 19 days of annual leave and may accrue up to 30 days of leave.
  • Holidays: In addition to the three national holidays that India observes—Republic Day, Independence Day and the Birthday of Mahatma Gandhi—employers are required to provide five to nine festival holidays. Festival holidays are determined by the state where a company has operations. When employees are required to work on a public holiday, they are entitled to double pay.
  • Culture: Probably the most recognizable of India’s many festivals and celebrations is Holi, also known as the “Festival of Colors,” which celebrates the start of spring. Although it’s traditionally a Hindu festival, it has become part of the national fabric, celebrated by Indians across religions and cultures.

Whether you’re just beginning to explore growing your workforce in India, or you already have contractors in country and are looking to expand their roles compliantly, Global Employment Outsourcing (GEO) can help you navigate the employment laws, recruitment and hiring practices, and cultural considerations in India.

As an employer of record in India, Safeguard Global has helped 45 companies employ more than 220 people in India. Contact us today to schedule a free consultation with one of our global solutions experts.


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