Indian Labor Law Essentials
The key labor laws that affect your Indian employees — Shops Act, Gratuity, Bonus.
Indian Labor Law Essentials — Platform view
Shops & Establishments Act
This state-level law governs working hours, holidays, leave, and overtime for service-sector employees. Requirements vary by state — Maharashtra, Karnataka, and Telangana each have different rules. We register and comply in each state where your employees are located.
Payment of Gratuity Act
Employees who complete 5 years of continuous service are entitled to gratuity — a lump-sum payment calculated as 15 days' salary for each year of service. This is a statutory obligation and part of the CTC structuring.
Payment of Bonus Act
Employees earning below a certain threshold are eligible for an annual bonus (minimum 8.33% of basic). For most tech roles at typical CTC levels, this may not apply, but we handle eligibility checks and payment when it does.
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