Offering a generous benefits package can make all the difference when it comes to hiring and retaining the best talent for your global team.
In fact, a 2020 survey by Fractl found that 88% of job seekers consider health, dental, and vision insurance an important benefit when deciding whether to accept a job offer. Other benefits that can sway their decision include parental leave, daycare services, gym memberships, and wellness perks, such as yoga classes.
Therefore, benefits are a crucial aspect of employee compensation that can help attract and retain talented employees — especially in a country like India, where employee benefits have become a key point of negotiation as the job market becomes more competitive.
The Indian employee benefits landscape includes a variety of benefits, including health insurance, paid leave, retirement benefits, and more. In this article, we’ll walk you through the benefits you’re legally required to provide when hiring employees in India.
Indian labor laws dictate the minimum requirements for statutory benefits, including minimum wages, paid leave, and health insurance.
Compared to other countries, Indian employee benefits are less comprehensive in some respects, but they have improved in recent years.
Minimum wages in India vary by state and are updated periodically. When hiring remote employees in India, you’ll need to check the minimum wage in the state where your employee lives.
The following benefits are mandatory for all Indian employees, including remote employees:
The standard workweek in India is 48 hours, equivalent to 9.6 hours per day, five days a week. All work in excess of 48 hours a week must be paid as overtime and is regulated by employment contracts, calculated at a minimum of 200% of the regular pay rate.
The regulations regarding paid leave in India are set in the employment contract as a minimum of 15 days of paid holiday a year once the employee has completed 240 days of employment. However, many employers include additional leave days in the contract, along with rules on how many days can be carried over to the following year, as this can help them attract and retain top talent.
Employees must request paid time off at least 15 days prior to the start of the leave and receive approval from the employer, the works committee, and their manager.
As an employer, it’s your responsibility to provide clear and concise instructions to your employees regarding the enrollment process and offer assistance as needed. You must also ensure compliance with any legal requirements related to employee benefits in India.
The process of enrolling employees in benefit schemes in India may vary depending on the employee benefits packages your company offers or state regulations. However, generally, the process involves the following steps:
Hopefully, by now, you have a better understanding of the benefits you’ll be legally required to offer your employees in India. However, if you want to be a competitive employer, you’ll probably want to design a benefits package that goes above and beyond the minimum requirements. For example, you could include additional parental leave, supplementary social security payments, life insurance plans, or stock options.
With global employment becoming an increasingly popular way to find talented employees, you might be considering India as a place to look for your next hire. If so, you’ll need to make sure your company complies with local labor laws, as failure to do so could put you at risk of fines and even jail time.
To avoid the pitfalls of hiring remote talent in India, many companies turn to an employer of record (EOR) like Remofirst. Remofirst can help you expand your business by hiring employees in India on your behalf, relieving you of the burden of managing benefits, payroll, and other compliance issues in a foreign country.
Need more information about hiring employees in India? Check out our India country guide to learn more about hiring Indian talent, or visit our partner Uplers if you're looking to source remote Indian talent.