Employer of Record (EOR) Services in Chhattisgarh
Chhattisgarh, located in central India, is renowned for its lush forests, vibrant tribal culture, and abundant natural resources. The state’s diverse landscape, ranging from dense forests to rolling hills, offers a haven for nature enthusiasts and adventurers. With a rich tribal heritage and vibrant cultural traditions, Chhattisgarh celebrates a tapestry of festivals and rituals throughout the year, providing visitors with a glimpse into its rich cultural heritage. Additionally, the state’s economy thrives on its mineral-rich resources, including coal and iron ore, which contribute significantly to its growth and development. As a gateway to India’s heartland, Chhattisgarh beckons travelers to explore its scenic beauty, delve into its cultural heritage, and experience the essence of central India. With its captivating landscapes, rich cultural tapestry, and economic potential, Chhattisgarh offers a unique blend of natural beauty, cultural richness, and opportunities for exploration and discovery.
Employment Terms and Regulations
Types of Contracts
- Fixed-term (minimum 3 months)
- Indefinite
- Part-time (hours negotiated between employee and client, typically 20-30 hours per week)
Job Titles
No restrictions on job titles in India.
Working Hours
- Standard: 48 hours per week; overtime to be agreed upon in the contract; time off instead of overtime possible (Maximum 50 hours in Quarter in most of Cities)
Minimum Wage
As per the Indian Constitution, ‘Minimum Wage’ has been defined as the level of income for skilled and unskilled workers which ensures a sustaining standard of living while also providing for some measure of comfort. A minimum wage not just supports the bare level of employment, but also seeks for viable continuous improvement. It aims at preventing exploitation of labour.
It is minimum INR 259 per day and Maximum goes to INR 992 per day.
Probation Period
Typically 3-6 months, extendable based on performance.
Taxation and Contributions
Employee Taxes and Contributions:
INCOME TAX SLAB RATES FY-2023-24 (AY – 2024-25) IN INDIA:
Employees can be taxed according to the “old” and “new” tax regimes, which the employee can choose between. Below are the income tax slabs (bands) for 2023:
Old Tax Regime
INR 0 – 250,000 = 0% Tax Rate
INR 250,000 to 5, 00,000 = 5%
INR 500,000 to 10, 00,000 = 20%
Above INR 10, 00,000 = 30%
New Tax Regime
INR 0 to 3, 00,000 = 0% Tax Rate
INR 3, 00,000 to 6, 00,000 = 5%
INR 6, 00,000 to 9, 00,000 = 10%
INR 9, 00,000 to 12, 00,000 = 15%
INR 12, 00,000 to 15, 00,000 = 20%
Above INR 15, 00,000 = 30%
Income Tax
Employee Provident Fund
The Employees’ Provident Fund (EPF) is a mandatory benefit for Indian employees, governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. It aims to secure employees’ financial futures post-retirement or when leaving employment, including benefits for dependents of deceased employees. Contributions, 12% of PF wages, are made by both employers and employees, with the employer’s share divided into 8.33% for the Employees’ Pension Scheme and 3.67% for the EPF Scheme. Employers also contribute 0.50% for Employees’ Deposit-linked Insurance Scheme and 0.50% for administrative charges. Certain rules apply, such as opting out for high-earning employees and mandatory enrollment for salary increases exceeding Rs. 15,000 during employment.
ESIC and its Applicability
ESIC, governed by the ESI Act 1948, offers a self-financed social security scheme to safeguard employees from financial difficulties due to sickness, disability, or employment-related injuries. It applies to establishments with 10 or more employees (20 or more in some states), earning monthly wages not exceeding Rs. 21,000 (or Rs. 25,000 for persons with disabilities). Contributions are made at rates of 0.75% by employees and 3.25% by employers.
Professional Tax
Professional Tax in India is a state-level tax imposed on individuals earning income from professions or employment. Professionals like lawyers, teachers, doctors, and chartered accountants are obligated to pay it. For salaried workers, employers deduct and remit the tax to the state government, while others must pay it themselves. Tax rates and amounts differ by state, with a maximum annual limit of INR 2,500.
Types of Leave
Annual Leave:
Employees can accrue up to a maximum of 45 days of annual leave. This accrual happens at a rate of 1 day earned for every 21 days worked, although employer-employee agreements may set a lower threshold.
Sick and Casual Leave:
Sick leave accrues at a rate of 1 day per month of completed service. When taking sick leave, employees are entitled to receive 100% of their average basic salary, with the employer covering the cost.
Maternity Leave:
Employees who have completed a minimum of 80 days of service in the preceding year qualify for a minimum of 26 weeks of paid maternity leave, with 8 of those weeks required to be taken before childbirth. For subsequent children beyond the first two, maternity leave reduces to 12 weeks. Employers are responsible for paying the employee 100% of their average basic salary. Additionally, employees have the option to take unpaid leave beyond the 26-week period.
Paternity Leave:
Government employees are entitled to 15 days of paid paternity leave, while there is no legally mandated paternity leave for other sectors.
Public Holidays:
India observes 14 public holidays, and employees are entitled to a minimum of 15 days of paid time off annually after completing 240 days of service with their company. Many employers may also provide additional paid time off as specified in employment contracts. The availability of extra holidays can vary by state, with the decision to grant them typically at the discretion of the employer, depending on local regulations.
Benefits:
Bonus
Every employee drawing not less than Rs. 21,000/- per month and who has worked for not less than 30 days in an accounting year shall be eligible for the Bonus. Every employee will be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than 30 working days in that year.
Minimum Bonus
The minimum bonus payment is capped at Rs 7000 per month “or the minimum wage for the scheduled employment, as fixed by the appropriate Government” (whichever is higher). Therefore, the cost associated with bonus payments could be double, based on the organization’s performance.
Termination Process:
Notice Period
During the probation period, there is no legally mandated minimum notice period. However, after completing one year of service, employees are entitled to a notice period of one month. Alternatively, the employer can choose to provide payment in lieu of notice.
Additional Information:
In the event that an employee has served the same employer for five years or more, they are eligible for a Service completion benefit known as “gratuity.” Gratuity is calculated as 15 days’ wages for each completed year of service. It’s important to note that any policies or regulations concerning the pay out of accrued leave at the end of employment should be clearly outlined in the employment contract, as there are no statutory rules governing this matter.
Statutory Payments
In India, it’s customary for employers to provide a 13th-month salary bonus, typically paid as a portion of the annual salary before the end of the year. Notably, India implemented a new tax regime in recent years, which eliminated various tax exemptions while offering lower tax rates. Employees have the flexibility to choose which tax system they prefer to follow based on their individual preferences and financial circumstances.
EMPLOYER TAXES
13% (estimated)
Employee’s Provident Fund (%)12%
Administration Fee (%)1%
FAQ's
How STM Manages Employment in India
Establishing an entity in every hiring location can be cost-prohibitive. STM simplifies the process by employing and paying your Indian talent on your behalf. We handle the intricate HR procedures and employment contracts in compliance with local laws. You can conveniently approve invoices through our platform. By partnering with an Employer of Record (EOR), you can efficiently and compliantly hire top talent globally.
Payment Processes for Indian Employees
We streamline payroll management for your Indian workforce. Employee hours, leaves, holidays, bonuses, and commissions are meticulously calculated. STM invoices you around the 15th of each month in your preferred currency, including US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), or Singapore Dollars (SGD). This ensures your Indian employees receive their salaries promptly in Indian Rupees (INR). Simplify further by consolidating your global team’s salaries into a single payment.
Full-time Employees vs. Global Contractors
Contractors engage with multiple companies and are self-employed, while full-time employees focus solely on their employer and receive additional benefits like health insurance, equity, and time off. While hiring international contractors can be cost-effective, it comes with misclassification risks. Partnering with an EOR for contractor onboarding and payments ensures compliant and timely compensation.
Reliable Employee Support
Our platform offers accessible support for employees and employers with inquiries about benefits, visas, and global employment in India. Utilize the chat function to connect with our expert team. Additionally, every STM client is assigned a dedicated account manager, serving as the primary contact for global HR assistance.
