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Recruitment

Advertising

What are the requirements relating to advertising positions?

Under the Employment Exchange (Compulsory Notification of Vacancies) Act, 1959, if the state so requires, a private sector establishment with 25 or more employees must notify vacancies to specific employment exchanges. However, this is seldom observed.

Background checks

What can employers do with regard to background checks and inquiries in relation to the following:

(a) Criminal records?

While it is possible to conduct criminal background checks, this is extremely difficult in practice because criminal records are not digitised and are not consolidated nationwide. Accordingly, where a criminal background check must be carried out, this is typically done at the police station with jurisdiction over the employee’s current place of residence or anywhere that he or she has lived for a reasonable period.   

(b) Medical history?

Employees’ medical histories cannot be accessed easily, since these are not digitised and there is no repository of medical records. Employee consent is required to disclose medical records to the employer. However, some employers require employees to undergo medical checks and have the diagnostic centre send the report directly to the employer. Subject to certain specific restrictions (eg, pre-employment testing for HIV is not permitted), there is no prohibition against this practice under Indian law. 

(c) Drug screening?

Indian law does not prohibit drug screening.  

(d) Credit checks?

An individual is entitled to obtain information on his or her credit rating. The employer can also access this information, with the employee’s permission and on providing necessary proof of identity. Access to credit rating information is more common in banks and financial institutions.

(e) Immigration status?

Indian law does not specifically require an employer to check the immigration status of a foreigner. Indian law does not prevent the employer from checking whether a foreign employee holds the necessary visa to work in India. If a foreign individual on an employment visa wishes to change employment to another company, he or she must leave India and apply afresh for a visa. The only exception is where the foreigner is changing jobs between a registered holding company and its subsidiaries or vice versa, or between subsidiaries of a registered holding company. In such case the foreigner may not need to leave India, provided that he or she fulfils specific criteria, including obtaining prior government approval for the change in employment.

(f) Social media?

There is no bar against conducting background checks through social media.

(g) Other?

The most common background checks undertaken are of educational qualifications. The employee must consent to this and the employer (or an outsourced provider) will then write to the relevant institution requesting confirmation. The institution may charge a fee for providing this information. Most institutions have a procedure in place in this regard. 

Wages and working time

Pay

Is there a national minimum wage and, if so, what is it?

There is no national minimum wage. However, the central and state governments can issue notifications on minimum wages in specific industries. The federal government has set the recommended minimum wage to Rs160 per day and advised state governments to implement the same.

Are there restrictions on working hours?

By and large, working up to nine hours a day is permitted, with a weekly limit of 48 hours. There are laws that restrict women from working at night (between 8:00pm and 6:00am). Some states also have a maximum number of hours of overtime that can be worked. 

Hours and overtime

What are the requirements for meal and rest breaks?

Most state laws provide for a break of 30 to 60 minutes after four to five hours of work. In practice, it is typical to provide a one-hour lunch break in an eight-hour day. 

How should overtime be calculated?

Overtime is usually calculated at twice the rate of normal wages. State law defines what the term ‘wages’ covers; this typically includes basic wages plus normal allowances, but excludes any bonus component. 

What exemptions are there from overtime?

There are no exemptions from paying overtime. However, the overtime provisions are seldom observed – generally, companies do not pay overtime when employees stay late to complete their work. It is recommended that employers pay overtime at least when employees are required by the nature of the assignment to work overtime – for example, call centre employees.

Is there a minimum paid holiday entitlement?

Yes. This varies from state to state, but is generally about 15 days. Most states prescribe up to 10 days of sick leave and some states prescribe another entitlement of up to 10 days of casual leave. In addition, most states prescribe about 10 days of public holidays; four to five of these are mandatory national and state holidays, while the remainder are chosen by the employer from a larger list provided by the state.

What are the rules applicable to final pay and deductions from wages?

Final pay must be made within two days of the date of termination where the employee’s services are terminated by the employer. In case of the employee’s resignation, the final pay-out can be made as part of the company’s normal payment cycle.

Deductions are permitted from an employee’s wages, but only for specified reasons (eg, on account of fines, deductions for damage to or loss of goods expressly entrusted to the employee and recovery of loans or advances). Deductions are generally permitted only up to 50% of the employee’s wages. 

Record keeping

What payroll and payment records must be maintained?

Under applicable state laws read with federal laws, the employer is typically required to maintain various payroll and payment records, such as a register of wages, a register of fines and a register of deductions. Payslips must also be issued to employees under federal and state law. An annual return under state law must usually be filed with the regulatory authorities which also contains payment-related declarations.

The law is not entirely clear on the electronic maintenance of registers. However, as long as the registers can be provided in the prescribed statutory format, electronic maintenance should be acceptable.

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