Hiring workers in India gives you a much wider pool of high-quality talent to help fill your business information technology and other staffing needs. The first thing to consider when hiring from India is whether to hire a local employee or an independent contractor.
With more than 1.3 billion people, India has top talent for international employers. If you are looking to hire a remote employee in India, work with Indian contractors, or help one of your existing employees move to India, this guide can help you get started.
Labor laws in India
India’s independent contractor law, Contract Labour Act 1970, defines independent contractors as workers who produce a given result.
Contractors in India must be able to work for multiple companies and not be subject to the control of any company they work for. Contractors must be free to choose their hours. Employers should be careful not to cross the line of misclassification in India by providing contractors work equipment or office space, as such actions could indicate an employee relationship. Any contractor agreement in India should clarify that the arrangement is not between employer and employee and that the worker is an independent party.
Payroll & Employment Law Compliance in India
There is no payroll schedule requirement, but most Indian workers are used to being paid at least monthly. First, however, there are essential labor laws and taxes you need to know, which are:
Minimum Wage: India’s minimum wage is adjusted frequently by considering over 2,000 job types. It’s currently set at 176 rupees per day (about $2.30). In addition, many municipalities have higher minimum wages broken down by different zones and industries.
Overtime: Employees receive twice their base pay for any work over 48 hours in one week.
13th Month Pay: With few exceptions, this is a mandatory bonus paid as a percentage of the employee’s annual salary at the end of the year.
Paid Time Off: Indian workers must receive at least 15 paid days off following 240 days of employment. While this is the minimum, most employers offer more time off to attract top talent.
Sick Leave: Any employee who has been employed for three months or more is entitled to 15 paid sick days per year. Sick days are paid at 70% of the employee’s regular pay rate.
Holiday Leave: There are many national holidays and local holidays in India where employees commonly take time off or where companies close. Employers are only required to give paid time off to employees during the following national holidays: Republic Day, Independence Day, and Gandhi Jayanti.
Remote Employee and Work Trend In India
Hiring Indian workers do well for your company. They are well-educated with a strong command of English. Therefore, communication won’t be an issue with them.
In the last decade, India has become a stronghold of well-skilled workers such as full stack developers, UI/web developers, QA testers and Software Design Engineers in Test (SDETs). Indian talent is also vital in cybersecurity, data analytics, DevOps and cloud infrastructure.
The advantage of hiring remote workers from India is the relative value of their wages compared to the depth of their skill sets. With the expansion of the technology industry in the past few decades, the demand for more highly trained IT developers and engineers will only continue to increase.
In India, after the recession triggered by the Covid-19 virus in 2020, the unemployment rate in an already job-scarce market has naturally grown. However, with the increased shift towards digitalisation, there has also been a rising demand for advanced artificial intelligence, machine learning, and data science skills.
In this push for remote work, even Indian companies are riding on the trend of hiring gig and contract workers. Hybrid working, remote hiring, and continual upskilling will continue to be a trend, especially in technology.
Hire Employees from India with Experttal
With laws that vary from region to region and a host of unfamiliar payroll practices, hiring in India can pose a steep challenge for employers. Remote helps businesses of all sizes hire employees in India easily and quickly with our global employment solutions. One relationship to Remote takes care of payroll, benefits, taxes, and local compliance for all your employees in India. Learn more about our global employment, employer of record, and contractor payments solutions in India.
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Kamal Rastogi is a serial IT entrepreneur with 25 yrs plus experience. Currently his focus area is Data Science business, ERP Consulting, IT Staffing and Experttal.com (Fastest growing US based platform to hire verified / Risk Compliant Expert IT resources from talent rich countries like India, Romania, Philippines etc...directly). His firms service clients like KPMG, Deloitte, EnY, Samsung, Wipro, NCR Corporation etc in India and USA.