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Indian Employment Lawsfor Foreign Companies

Complete guide to Indian employment laws for foreign companies. Learn about labor laws, employee rights, PF, ESI, gratuity, compliance requirements, and get expert assistance.

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Complete guide to Indian employment laws for foreign companies. Learn about labor laws, employee rights, PF, ESI, gratuity, compliance requirements, and expert assistance.

Frequently Asked Questions

What employment laws apply to foreign companies in India?

Foreign companies must comply with Indian labor laws including: Employees' Provident Fund (PF), Employees' State Insurance (ESI), gratuity, minimum wages, labor welfare, and other state and central labor laws.

What is PF and ESI?

PF (Provident Fund) is a retirement benefit scheme where employer and employee contribute 12% each of basic salary. ESI (Employees' State Insurance) provides health insurance and is applicable to employees earning up to ₹21,000 per month.

Is PF mandatory for foreign companies?

Yes, PF is mandatory for establishments with 20 or more employees. Both employer and employee must contribute 12% each of basic salary. PF registration and compliance are mandatory.

What is gratuity?

Gratuity is a retirement benefit payable to employees who have completed 5 years of service. It is calculated as 15 days salary for each year of service. Gratuity is mandatory under the Payment of Gratuity Act.

What are minimum wage requirements?

Minimum wages are set by state governments and vary by state, skill level, and industry. Foreign companies must pay at least minimum wages as prescribed by state labor departments.

Do foreign companies need to follow Indian labor laws?

Yes, foreign companies operating in India must comply with all applicable Indian labor laws including PF, ESI, gratuity, minimum wages, working hours, leave policies, and other labor welfare provisions.

What are the working hours regulations?

Working hours are regulated by state Shops and Establishments Acts. Generally, maximum 8-9 hours per day and 48 hours per week. Overtime must be paid at double the normal rate.

What leave policies apply?

Employees are entitled to annual leave, sick leave, and other leaves as per state labor laws. Typically, employees get 12-15 days annual leave, 12 days sick leave, and public holidays as per state regulations.

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