India – Employment Terms and Conditions

What are the standard working hours in India, and how is overtime regulated?

The regulation of working hours in India rests primarily on the Factories Act of 1948, which establishes protections designed to safeguard employee welfare. Adult workers aged 18 and above are subject to a ceiling of 9 hours per day and 48 hours per week. In day-to-day practice, most workplaces operate on a 40-hour week with 8-hour days. While this mirrors the standard observed across many European nations, India’s legal upper limit of 48 hours is somewhat higher.

Any employee working more than five consecutive hours is entitled to a meal break of at least 30 minutes. Workers are also guaranteed a minimum of one complete rest day per week. Daily working hours — including overtime — cannot exceed 12 and a half hours in total, meaning the additional overtime portion is capped at two and a half hours on any given day.

Hours worked beyond 9 per day or 48 per week are classified as overtime. Employees are entitled to overtime pay for these additional hours, with the exception of those in managerial or supervisory positions, who are categorised as exempt under applicable labour legislation. The mandatory rate for overtime compensation is twice the employee’s ordinary wage.

India’s overtime framework now falls under the Occupational Safety, Health and Working Conditions (OSH) Code 2020, which came into force on 21 November 2025, consolidating 13 preceding labour laws. Although the OSH Code establishes a unified national framework for working conditions and overtime payments, it does not fully supersede all state-level legislation — particularly the Shops and Establishments Acts, which continue to govern workers in retail, commercial establishments, restaurants, and comparable settings.

Under most legislative provisions, the ceiling for overtime work is 125 hours in any given quarter. That said, certain states — including Telangana and Maharashtra — have revised this ceiling upward to 144 hours per quarter. For employees in the IT sector, working hours are generally regulated by the relevant state’s Shops and Establishments Act, imposing a maximum of 9 hours daily and 48 hours weekly alongside provisions for overtime compensation.

The practical application of overtime rules varies considerably by sector and state. Manufacturing establishments follow the Factories Act uniformly, while IT companies and commercial workplaces operate under more varied state-specific provisions relating to limits, exemptions, and record-keeping requirements. Expats should obtain a copy of the Shops and Establishments Act for the state in which they are based, as it is likely to govern much of their everyday working life. Further information is available from the Ministry of Labour and Employment.

What employment rights and benefits are workers entitled to in India?

India’s leave framework encompasses annual (earned/privilege) leave, sick leave, casual leave, maternity leave, and public holidays. Entitlements are determined under a combination of central and state laws — notably the Shops and Establishments Acts — and differ according to the state, category of employment, and length of service. This introduces a level of complexity not found in countries operating uniform national entitlements; unlike France, for example, which mandates a minimum of 25 days across the board, India’s leave provisions vary meaningfully from one state and sector to another.

The minimum statutory annual leave entitlement in India is 15 paid days per year, available to employees who have completed at least 240 days of service with their employer. Under the Factories Act, adult workers accrue one day’s leave for every 20 days worked, while workers under 18 earn one day for every 15 days worked — both calculations typically yielding around 15 days of annual leave following 240 days of continuous service.

Sick leave and casual leave are provided under state Shops and Establishments legislation, with 6 to 12 days of each commonly granted annually. Mandatory public holidays include three national observances — Republic Day, Independence Day, and Gandhi Jayanti — together with state-notified festival holidays. Through the Employees’ State Insurance Corporation (ESIC), eligible employees receive 70% of their average daily wages as a cash benefit during medical absence for up to 91 days across two consecutive benefit periods, offering meaningful additional protection beyond the basic statutory minimums.

Female employees are entitled to 26 weeks of fully paid maternity leave for the birth of their first or second child; subsequent pregnancies attract a reduced entitlement of 12 weeks. Working is prohibited for the six weeks immediately following delivery or a miscarriage. Under the Maternity Benefit Act 1961, a woman must have worked with her employer for at least 80 days in the 12 months preceding her expected delivery date to qualify. Maternity leave payments are made by the employer at 100% of the employee’s average wage.

No statute in India compels private sector employers to offer paternity leave. While the Central Government provides its own employees with statutory paternity leave, this obligation has not been extended to the private sector by law. Central government employees are entitled to 15 days of paternity leave within six months of the birth or adoption of a child. Despite the absence of a legal mandate, many progressive employers — particularly large corporations and multinationals — voluntarily include paternity leave provisions in employment contracts as a means of attracting and retaining skilled staff.

These statutory entitlements apply equally to foreign nationals working in India’s formal sector. Expats holding valid employment visas who are engaged in organised establishments are entitled to the same minimum statutory benefits as Indian employees. The Ministry of Labour and Employment and the Employees’ State Insurance Corporation are the principal official resources for further information.

What are the rules around minimum wage and pay in India?

Minimum wage regulation in India is now consolidated under the Code on Wages, 2019, enforced by the Government of India to shield employees from exploitation and guarantee baseline remuneration. India’s four new Labour Codes officially came into effect on 21 November 2025, with the Code on Wages, 2019 conferring a statutory right to minimum wage on every worker across the country.

India employs a two-tier wage structure: the Central Government establishes a national “floor wage” representing the absolute minimum baseline, while each individual state sets its own minimum wage above that floor. As of 2025–26, the National Floor Level Minimum Wage is fixed at ₹178 per day. This figure serves as an advisory baseline; in practice, most states set their own enforceable minimum wage levels — frequently well above the national floor — with rates varying according to job category, geographical zone, and worker skill classification (unskilled, semi-skilled, or skilled).

State-level variation is substantial. Daily minimum wages range from ₹160 in Bihar to ₹423 in Delhi under the Minimum Wages Act of 1948. The variable component of minimum wages — the Dearness Allowance — is typically revised twice annually in April and October to reflect changes in the cost of living, while the underlying basic wage structure undergoes a comprehensive review at least once every five years.

A significant development introduced by the Code on Wages is the legal obligation on states to ensure their minimum wage rates do not fall below the national floor set by the Central Government. The Code also prohibits any gender-based discrimination in wages and recruitment. Wage rates are differentiated by worker skill level — spanning unskilled, semi-skilled, skilled, and highly skilled categories — and vary further according to the industry concerned.

For the most up-to-date state-specific wage figures, consult the Chief Labour Commissioner’s official minimum wages page or approach the relevant state labour department directly, as rates are revised on a regular basis.

How does the employment contract system work in India?

An employment arrangement sets out the mutual rights and obligations of both employer and employee. These are typically documented in a written employment contract, though they may also appear in staff handbooks, HR policy manuals, or job advertisements. India’s labour framework recognises several categories of employment, including permanent (open-ended), fixed-term, part-time, contractual, and probationary arrangements.

An employment contract in India will ordinarily include: the job title and a description of duties and responsibilities, together with details of remuneration — covering salary, wages, and any additional elements such as bonuses or commission. Contracts should also address working hours, leave entitlements, notice periods for termination, and confidentiality obligations. Written contracts are standard practice in the organised sector and are strongly advisable for all employees, including foreign nationals.

Probationary periods are customary in India, generally running for three to six months. Employers typically retain greater flexibility to end the employment relationship during this period. Upon confirmation as a permanent employee, workers acquire stronger legal protections under the Industrial Relations Code, 2020 — which consolidates earlier legislation including the Industrial Disputes Act — governing unfair dismissal and retrenchment. Establishments employing 100 or more workers (generally in manufacturing) are required to obtain government approval before proceeding with retrenchments, a requirement that has no direct parallel in jurisdictions such as Canada or Singapore.

Under the new Code on Social Security, fixed-term employees become eligible for gratuity after only one year of service — a significant reduction from the previous five-year qualifying period. Gratuity, the statutory end-of-service benefit payable under the Payment of Gratuity Act, is calculated at 15 days’ wages per completed year of service and applies to employees who have served continuously for five or more years in permanent roles. Notice periods are ordinarily specified in the employment contract; where the contract is silent on this point, one month’s notice is the standard expectation in most formal sector positions.

Expats should ensure that their employment contracts are properly aligned with Indian law and should not place sole reliance on agreements drafted under the jurisdiction of their home country. Taking advice from a qualified Indian employment lawyer before signing any contract is strongly advisable.

How does the workplace pension system work in India?

The cornerstone of India’s workplace pension system is the Employees’ Provident Fund (EPF), a mandatory contributory scheme administered by the Employees’ Provident Fund Organisation (EPFO). In contrast to the UK’s auto-enrolment framework — where employer contributions are introduced incrementally and employees retain the option to opt out — India’s EPF is compulsory from the outset for all eligible employees, with no opt-out available for those below the relevant wage ceiling.

Under the Code on Wages and Code on Social Security, both in force from 21 November 2025, every employer must contribute 12% of basic wages to the EPF, matched by an equivalent 12% contribution from the employee. Where an employee’s gross salary does not exceed ₹21,000 per month, the employer is additionally required to contribute 3.25% to the Employees’ State Insurance (ESI) scheme. Mandatory EPF enrolment applies to employees earning up to ₹15,000 per month in basic wages, though many employers opt to enrol higher-earning staff on a voluntary basis.

In broad structural terms, the EPF resembles Australia’s superannuation system — both involve compulsory employer and employee contributions to individual retirement accounts that build over the course of a career. However, India’s scheme is centrally administered by a government body rather than managed through private funds, and the rules governing withdrawals are considerably more restrictive. Within the EPF framework, a portion of the employer’s contribution is channelled into the Employees’ Pension Scheme (EPS), which provides a defined monthly pension upon retirement, subject to qualifying conditions being met.

Under the Code on Wages, 2019, Basic Pay combined with Dearness Allowance must account for at least 50% of an employee’s total Cost to Company (CTC). Any allowances that cause the non-basic component of remuneration to exceed 50% are reclassified as wages, with the direct effect of increasing EPF, gratuity, and bonus liabilities. This is a critical compliance consideration for expats and their employers when structuring remuneration packages. For comprehensive guidance, refer to the EPFO official website.

What types of pension arrangements are available to expats in India?

Foreign nationals employed in India’s formal sector are generally subject to the same EPF contribution obligations as Indian citizens, provided they work for an establishment covered by the Employees’ Provident Funds and Miscellaneous Provisions Act. The rules for overseas workers — designated as International Workers (IWs) under EPFO — are, however, distinct from those applicable to Indian employees and require careful consideration.

Under EPFO’s International Workers framework, foreign nationals employed by a covered establishment in India must contribute to the EPF at the same rates as domestic employees — 12% of basic wages from both the employee and the employer. This obligation applies irrespective of nationality. Exemptions may be granted to nationals of countries that have entered into a Social Security Agreement (SSA) with India, provided the individual holds a valid Certificate of Coverage (CoC) issued by the social security authority in their home country, confirming that they remain insured under that system.

India has concluded SSAs with a number of countries, including Germany, South Korea, Japan, France, Denmark, Finland, Luxembourg, Switzerland, the Czech Republic, Norway, Hungary, Austria, Canada, Australia, and others. This list continues to grow; it is advisable to confirm the current position with the EPFO before assuming that an exemption applies. Where a valid CoC is in place, the worker is relieved of the obligation to contribute to India’s EPF, and the employer is similarly not required to make contributions on that individual’s behalf.

Expats who have made EPF contributions during their time in India may withdraw their accumulated balance upon permanently leaving the country, subject to applicable conditions. International Workers are permitted to claim a final settlement of their EPF account on departing India for good. The EPS pension component, however, may not be fully withdrawable depending on the number of years of contribution and the provisions of any applicable SSA. Expats are advised to contact the EPFO directly and obtain advice from a qualified financial adviser, as eligibility conditions are subject to amendment and individual circumstances can differ considerably.

Private retirement solutions — including National Pension System (NPS) accounts and personal pension products — are also available in India and may suit expats who fall outside the EPF framework or wish to build additional retirement savings. The Pension Fund Regulatory and Development Authority (PFRDA) oversees the NPS. Transferring overseas pension savings into Indian schemes is generally not straightforward; the applicable rules depend on bilateral agreements in force and the nature of the scheme in question.

What is the retirement age in India, and how does the pension eligibility system work?

India has no single statutory retirement age applicable to all private sector workers — the age at which employment ends varies by industry and according to the policies of individual employers. Within the central government service, the standard retirement age is 60 years. Most state government employees also retire at 60, although certain states have set the retirement age at 58. In the private sector, retirement age is ordinarily determined by the employer and set out in the employment contract, most commonly falling between 58 and 60 years; there is no statutory minimum imposed on private employers. No distinction is drawn between men and women in terms of the official retirement age in the public sector.

Under the Employees’ Pension Scheme (EPS), a monthly pension is available only to members who have completed a minimum of 10 years of scheme membership. The standard age for commencing EPS pension payments is 58, with an option for early drawdown from age 50 at a reduced rate. Members who have contributed to the EPS for fewer than 10 years are entitled to a withdrawal benefit in the form of a lump sum rather than a monthly pension.

Under the National Pension System (NPS) — which covers central government employees and is accessible to others on a voluntary basis — the normal exit age is 60. At this point, a minimum of 40% of the accumulated corpus must be used to purchase an annuity, with the remainder available as a lump sum withdrawal. Those who exit the NPS before reaching 60 are required to annuitise 80% of their accumulated funds. The PFRDA publishes the current NPS rules and eligibility requirements.

For expats who contribute to the EPS during their assignment in India but depart before reaching the pension eligibility age, accumulated EPS contributions will not generate a monthly pension if the 10-year minimum threshold has not been met — in such cases, the lump sum withdrawal benefit applies. Given that eligibility rules are subject to revision and individual situations vary, readers should verify the current position with the EPFO or a qualified financial adviser before making any decisions. The EPFO official website is the authoritative source for up-to-date pension eligibility criteria.

What taxes and social contributions are deducted from wages in India?

Employees in India are subject to income tax deducted at source (TDS) by their employer, alongside mandatory social security contributions. Income tax is levied under the Income Tax Act, 1961 and administered by the Income Tax Department. India operates a progressive tax structure, and as of the 2025–26 assessment year, taxpayers may choose between two regimes: the established old regime, which permits various deductions and exemptions, and the newer simplified regime, which offers lower headline rates but restricts the use of deductions. The new regime now serves as the default for most individual taxpayers.

Employers calculate and deduct TDS from employees’ monthly salaries, remitting the amount to the government on their behalf. Employees are required to submit an annual income tax return (ITR) by the applicable deadline. The principal deductions from wages for social security purposes are: EPF contributions at 12% of basic wages; ESI contributions at 0.75% of gross wages for employees earning up to ₹21,000 per month (as of 2025); and Professional Tax in states where this levy applies — typically a nominal charge of around ₹200 per month.

Foreign nationals are liable to Indian income tax on any income earned in India, irrespective of their nationality. Tax residency is determined by the number of days a person spends in India during the financial year (which runs from April to March). An individual who is present in India for 182 or more days during the financial year is generally treated as a tax resident and taxed on their worldwide income. Non-residents are taxed only on income that has its source in India. India maintains Double Taxation Avoidance Agreements (DTAAs) with a wide range of countries, which can mitigate or eliminate the risk of the same income being taxed in both jurisdictions.

Expats should assess their tax residency position at an early stage and understand the implications for both Indian tax obligations and the rules of their home country. The Income Tax Department of India publishes current tax bands, DTAA details, and guidance specific to foreign workers. Engaging a qualified tax adviser with expertise in both Indian taxation and cross-border issues is strongly recommended.

What are the rules around trade unions and collective bargaining in India?

The legislative foundation for trade unions in India was historically the Trade Unions Act, 1926, now incorporated within the Industrial Relations Code, 2020. Workers enjoy the right to establish and affiliate with trade unions, and as few as seven workers may apply to register a union. India has a considerable number of registered unions, many aligned with national federations or, in a number of cases, political organisations. Union membership density varies sharply by sector — manufacturing, mining, port operations, and public utilities tend to have higher unionisation rates, while the IT industry, services sector, and gig economy have traditionally seen lower levels of formal union activity.

Collective bargaining agreements (CBAs) are reached through negotiations between recognised unions and employers and may provide for terms that exceed the statutory minimums in areas such as wages, working hours, and leave. Where a CBA is operative in a workplace, its provisions form part of the employment conditions for all covered workers. Employers in heavily unionised sectors such as steel, textiles, and transportation are more likely to have such agreements in place.

Foreign nationals in India are not legally barred from joining a registered trade union; in practice, however, most expats occupying managerial, executive, or specialist technical positions are unlikely to be eligible for — or expected to join — a union. Managerial and supervisory staff are generally excluded from collective bargaining units. Expats should investigate whether a CBA operates within their employer’s workplace and, if so, whether it has any bearing on their personal employment terms — this is not always made clear in individual contracts. The Ministry of Labour and Employment is the appropriate starting point for enquiries relating to union registration and dispute resolution.

Are there any particular employment protections or challenges that expats should be aware of in India?

Expats in India typically work under an Employment Visa, which ties their entitlement to work lawfully to a specific employing organisation. Should employment come to an end — whether through resignation, termination, or redundancy — the validity of the visa is directly affected, and the individual generally has a limited window within which to either obtain a new Employment Visa through a different employer or leave the country. Unlike certain jurisdictions where a work authorisation can be transferred independently of the employer, India’s Employment Visa is employer-specific, substantially curtailing the holder’s ability to move freely between jobs.

Certain roles and sectors impose restrictions on the employment of foreign nationals. India historically maintained industry-specific limits on foreign equity participation and workforce composition, though successive reform programmes have liberalised many of these requirements. Expats are most frequently engaged in senior management, technical, IT, finance, education, and research functions. A minimum salary threshold applies to Employment Visa holders — generally USD 25,000 per annum (current figures should be verified on the Ministry of Home Affairs website, as this figure is subject to periodic revision) — with specific exemptions applicable to professionals of Indian origin and certain specialised categories.

Employment contracts in India’s formal sector are predominantly written in English, though state-level documents and official correspondence may be issued in regional languages. In states where a regional language holds official status, certain statutory records — such as wage registers — may be maintained in that language. Expats should also be aware that resolving employment disputes in India can be a protracted process — industrial tribunals and labour courts may take considerable time to reach a conclusion, which represents a practical disadvantage when compared to countries with more expeditious employment tribunal systems.

A substantial proportion of India’s working population is engaged in the informal sector and lacks access to many of the formal protections described above, making compliance with working hours rules inconsistent across large parts of the economy and underscoring the urgent need for broader regulatory enforcement. Expats who work through informal or unregistered channels face considerably heightened risk and should ensure that all employment is conducted through a properly registered, legally compliant entity.

Overseas qualifications are assessed by individual employers in India and are generally well regarded, particularly for senior or specialist positions. However, in regulated professions — including medicine, law, and architecture — foreign credentials must be formally evaluated and validated by the appropriate Indian regulatory authority (for example, the National Medical Commission in the case of medical practitioners). Those working in regulated fields should initiate the recognition process well in advance of commencing employment, as assessments can span several months. The Ministry of Labour and Employment and the relevant sectoral regulators are the appropriate first points of contact for guidance.

Frequently asked questions

Do expats in India have the same employment rights as Indian nationals?

In the great majority of respects, yes. Foreign nationals employed in India’s formal sector on valid Employment Visas are entitled to the same statutory minimums as local workers — encompassing minimum wage, annual leave, maternity benefits, EPF contributions, and overtime protections. That said, certain entitlements — including specific social security benefits and the terms governing pension withdrawals — may be influenced by bilateral agreements between India and the expat’s home country. Always confirm your specific entitlements with your employer and, where relevant, with the EPFO or a qualified adviser.

Can I access my Employees’ Provident Fund (EPF) contributions if I leave India?

Yes. International Workers who have contributed to the EPF and are departing India permanently may apply for a final settlement of their EPF balance. Where EPS contributions cover fewer than 10 years of membership, a lump sum withdrawal benefit is payable in place of a monthly pension. Citizens of countries that have signed a Social Security Agreement with India may be subject to different rules regarding their contributions. Contact the EPFO directly or visit epfindia.gov.in for the current procedure and relevant forms.

What happens to my employment rights and visa status if my employer terminates my contract?

Your Employment Visa is linked directly to your employer. If your employment is terminated, your legal right to remain and work in India is immediately affected. In most circumstances, you will need to leave India, obtain a new Employment Visa through a new employer, or convert to a different visa category. Statutory entitlements in respect of notice, final salary, and gratuity — where applicable — continue to apply at the point of termination. Consult the Ministry of Home Affairs for current guidance on visa transition options.

Are overseas professional qualifications recognised in India?

For positions in business, IT, and the broader private sector that are not subject to statutory regulation, overseas qualifications are evaluated by the employer and are commonly accepted, particularly for senior or specialist roles. In regulated professions — including medicine, law, nursing, engineering, and architecture — foreign credentials must be formally assessed and recognised by the relevant Indian statutory body (for example, the National Medical Commission in the case of doctors). Begin the recognition process as early as possible, since assessments can take several months to complete.

Is paternity leave available to expat fathers working in India?

Statutory paid paternity leave is guaranteed only for central government employees, who receive 15 days within six months of a birth or adoption. Private sector employers are under no legal obligation to provide paid paternity leave. Nevertheless, many multinational companies and larger Indian organisations voluntarily offer paternity leave provisions ranging from a few days to several weeks. Review your employment contract and your company’s HR policy for details. If this benefit is important to you, it is worth raising during contract negotiations before accepting a position.

How does India’s income tax system treat expats?

All foreign nationals earning income in India are liable to Indian income tax on that income, regardless of residency status. Spending 182 or more days in India during a financial year (April to March) generally makes a person a tax resident, with liability extended to their worldwide income. India has Double Taxation Avoidance Agreements with a wide range of countries, which may prevent the same income from being taxed twice. Income tax is withheld at source by your employer each month, and an annual return must be filed by the applicable deadline. The Income Tax Department of India and a specialist cross-border tax adviser are the recommended resources for personalised guidance.

Does the minimum wage in India apply to expat workers?

Yes. India’s minimum wage legislation applies on the basis of where the employee physically performs their work, regardless of where the employing organisation is incorporated. Expats must receive at least the applicable state minimum wage for their sector, role, and skill classification. In practice, Employment Visa holders are required to earn well above the minimum wage threshold by virtue of the visa’s own minimum annual salary requirement — currently USD 25,000 per annum, though current thresholds should be verified with the Ministry of Home Affairs. Consult the Chief Labour Commissioner’s office for current state wage tables.

Can I join a trade union as a foreign national working in India?

Foreign nationals are not legally precluded from joining a registered trade union in India. In practice, however, most expats working in managerial, executive, or specialist technical roles are unlikely to fall within the coverage of a collective bargaining unit, as such units generally represent non-managerial employees. If your role falls within the scope of a union’s recognised bargaining unit, you may be eligible to join. Check with your employer and the relevant union to establish whether membership is open to you and whether it has any bearing on your employment terms and conditions.