Navigating Indian Labour Laws

A company’s foundation rests on the dedication and hard work of its employees. A strong and committed workforce is essential for an organization to realize its full potential and successfully bring its vision to life. To attract and retain such talent, it is vital that employees feel valued, supported, and assured that their rights are protected in the workplace.

Indian labour laws are a comprehensive framework of codes, acts, and regulations governing the relationship between employers and workers across the country. These laws apply to almost all industries, spanning both the public and private sectors. Compliance with labour laws is crucial for the smooth and ethical functioning of any organization—not only because non-compliance attracts legal penalties, but also because it can lead to an unhealthy work environment, which can hinder business growth and success.

For foreign companies planning to establish operations in India, gaining a thorough understanding of Indian labour laws is especially important. Familiarity with these regulations helps prevent legal complications, ensures operational stability, and fosters a fair and productive workplace from the outset.

Let’s take a look at some of the most important rights of employees that employers in India should know about.

Right to Leaves

Employees are entitled to various types of leave which slightly vary from state to state, including national holidays (minimum three), casual leave for unforeseen needs, earned leave that can be carried forward, sick leave, and compensatory offs when working on off days. Employers may also grant leave without pay when paid leave is exhausted.

Right to Minimum Wage, Timely Salary, and Equal Pay

Employees must receive at least the statutory minimum wage (varies by region, job type, etc.) and timely payment of salary. Under the Equal Remuneration provisions, workers are entitled to equal pay for equal work regardless of gender.

Right to Benefits

Employees in India are entitled to a range of statutory benefits designed to provide financial security and support at different stages of their employment and personal lives. One of the key benefits is gratuity, which is payable to employees who have completed a minimum of five years of continuous service with an organization. In addition to gratuity, employees are entitled to parental benefits, including maternity leave as prescribed under the Maternity Benefit Act. 

Employees may also be eligible for statutory bonuses under the Payment of Bonus Act, depending on factors such as the size of the establishment and the employee’s wage threshold. 

Right to Provident Fund

Employers with 20 or more employees must register with the Employees’ Provident Fund Organisation (EPFO) and contribute alongside employees to their provident fund—a long-term savings and retirement benefit.

Right to Protection from Sexual Harassment at Workplace

Employees are protected under the Sexual Harassment of Women at Workplace Act, 2013, which requires organizations with 10 or more employees to set up an Internal Complaints Committee (ICC) to address and redress complaints of sexual harassment.

Collectively, these rights safeguard the interests and well-being of employees, helping them feel secure and valued in their workplaces. Adherence to these Indian labour laws is essential not only to ensure legal compliance in India  but also to foster a fair, respectful, and healthy work environment.