How to create offer letters for employees in India [2024]
When you hire an employee in India, one of the first things you'll do is send an employment offer letter.
As one of the first documents establishing a business relationship between you and your prospective employee, it’s crucial to get the offer letter right. While not always a legally binding document in India, the offer letter lays the foundation for an employment agreement while making the job and work conditions clear to the potential employee. This offer of employment will also help keep you compliant with labor laws in India so you can avoid costly legal disputes and penalties.
Here’s everything you need to send a legally compliant offer letter to hire a full-time employee in India before starting the onboarding process.
India job offer letter checklist
- Position (job title), job description, start date, and probationary period. You should explain that their suitability for their job duties will be evaluated during their probationary period. In India, probationary periods vary among roles and industries, but typically last from one month to one year.
- Working hours. Outline the expected working hours and any overtime policies that the employee will be subject to. In India, the maximum working week is 48 hours, with no more than nine hours a day. While overtime rates vary for private sector employees, factory workers are entitled to double their regular pay rate for additional hours. For more on working hours and overtime, read our guide to hiring in India.
- Compensations and benefits
- Salary. Specify the employee's salary or hourly compensation in INR, as well as any other compensation they may receive (equity compensation, bonuses, incentive pay, etc.). Specify that the employee’s salary will be paid monthly, per India’s standard.
- Equity. If applicable, specify any equity compensation they will receive. The most common types of equity compensation for employees in India are stock options, restricted stock units (RSUs), and Employee Stock Purchase Plans (ESPPs).
- Benefits. Benefits could be outlined in the offer letter, but be sure to address them in general terms so that if they change in the future, an amendment to the offer letter isn't required. In India, the following benefits are mandatory for full-time employees (though not always listed in an offer letter): employee pension scheme contributions, employee provident fund, vacation entitlements, statutory holidays, sick leave, and maternity leave.
- Vacation. The employment contract should include details about your company's vacation leave policy, especially if you offer more time off than the typical 15 days of “earned leave” for private sector employees (the exact minimums in India vary between states). To learn more about leave and statutory holidays in India, read our guide to hiring in India.
- Termination policy. Clearly explain the terms of termination, including the notice that will be provided, and any conditions that may lead to termination. Note that there are limited reasons an employee can be terminated involuntarily in India, and at-will employment does not exist. The notice period required by law can vary between states, but employers have to provide at least one month.
- Confidentiality and non-disclosure. Include in the offer of employment a clause outlining the employee's responsibilities regarding confidentiality and non-disclosure of the company's information. Non-disclosure agreements (NDAs) are considered legally binding in India, though they should be stamped and registered to ensure enforceability.
- Contact information and phone number.
- Other key details. If there are any other key details relevant to your company's policies and procedures, include them in the offer letter.
- If the offer is contingent on any conditions—like satisfactory results from a routine background check, signing company policies documents, or proof of eligibility to legally work in India—then list these out.
- Request that the employee signs and returns the offer letter to confirm their acceptance of the job before their start date, or include an expiration date for the offer letter that serves as a deadline for signature.
- Non-compete and non-solicit agreements. Include provisions outlining the employee’s non-competition and non-solicitation responsibilities after leaving your company—but only if they’re reasonable for your employee. Be warned: not all non-compete agreements are legally enforceable in Indian courts, especially if it impedes the employee after they’ve been terminated.
- Personal data collection. Include information about how you will collect, use, store, and process personal employee information.
- Intellectual property. Convey the expectations for the intellectual property ownership of any improvements, inventions, discoveries, and other modifications to work products by the employee on company time.
- Workplace health and safety. Include information about how you will ensure a safe, hazard-free work environment for your employee.
- Location. Establish expectations for in-office or remote work, if applicable.
Onboard employees in India in 90 seconds with Rippling
Rippling can help you hire and onboard employees in India within minutes.
Just click "hire" and Rippling will automatically:
- Generate country-specific hiring agreements
- Run background check
- Verify minimum wage and leave requirements
- Add to locally compliant overtime policies
- Send IP agreement
- Enroll in country-specific benefits
- Assign country-specific compliance training
- Order, configure, and ship work laptop
- Set up third-party apps like Slack or Zoom
- Set up single sign-on
- Configure WiFi
- Add to payroll
- Issue and ship corporate card, and apply card limits and policies
Rippling is the only platform that offers everything you need to manage a global workforce, all in a single system.
Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.
