What are the labor laws and regulations that GCCs need to be aware of in India?

Setting up a Global Capability Center (GCC) in India involves navigating a complex landscape of labor laws and regulations. Here's a detailed overview of the key considerations:

Employment Contracts

Written employment contracts are mandatory in India. These contracts must clearly outline:

• Job Description: Define the employee's specific duties and responsibilities.
• Compensation: Include salary, wages, and any other forms of compensation like bonuses or commissions.
• Probation Period: Cannot exceed 6 months.
• Benefits: Detail health insurance, retirement plans, vacation time, and other benefits.

Independent contractors require separate agreements that adhere to specific tax and social security regulations. Having clear and legally compliant contracts protects both employers and employees.

Working Hours and Overtime

The standard workweek in India is 48 hours, with a maximum daily workday of 9 hours. Key points include:

• Overtime: Must be compensated at double the usual wage rate.
• Weekly Rest: Employers must ensure employees take weekly rest periods.
• Adherence: Respecting working hours and overtime regulations fosters a positive work environment and prevents legal issues.

Minimum Wages and Wage Compliance

The GCC must comply with the minimum wage requirements as stipulated under the Minimum Wages Act and the Code on Wages. This includes:

• Fair Wages: Ensuring employees are paid fair wages.
• Social Security: Registering with the Employees’ Provident Fund Organization (EPFO) and the Employees’ State Insurance Corporation (ESIC) to provide social security benefits.

Occupational Health and Safety (OHS)

The GCC must comply with the Occupational Safety, Health and Working Conditions Code, 2020, to ensure a safe and healthy working environment. This includes:

• Safety Measures: Providing adequate ventilation, sanitation facilities, and protective equipment.
• Health Check-ups: Conducting annual health check-ups for employees.

Employee Benefits and Retention

Designing effective incentive structures and retention strategies in compliance with Indian labour laws is crucial. This includes:

• Leave Entitlements: Ensuring employees receive their entitled leave.
• Maternity Leave: Female employees benefit from increased maternity leave to 26 weeks.
• Security Measures: Implementing security measures for night shifts.

Engagement of Foreign Nationals

For foreign nationals working in India, the GCC must:

• Obtain Visas: Ensure valid business or employment visas.
• Social Security: Analyze the requirement under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act) for international workers.

Environmental Law Compliance

If the GCC's operations involve environmental impact, it must comply with:

• Environmental Clearances: Obtain clearances from the Ministry of Environment, Forest, and Climate Change (MoEFCC) or the State Environmental Impact Assessment Authority (SEIAA).
• Pollution Control: Implement pollution control measures and submit periodic reports to the authorities.

Data Privacy and Compliance

The GCC must comply with data localization requirements under the Personal Data Protection Bill (PDPB), which mandates:

• Data Storage: Certain categories of personal data must be stored and processed only in India.
• Cross-Border Data Transfer: Ensure compliance with the SPDI Rules and the PDPB for any transfer of personal data outside India.

How Wisemonk Can Help You Navigate Labor Laws and Regulations for Your GCC in India

Wisemonk, as an Indian payroll and employer of record (EOR) expert, can assist you in implementing these labor laws and regulations:

‍Strategic Workforce Management: We provide insights on structuring employment agreements, managing contract labor, and ensuring compliance with key regulations. Our experts help you design effective incentive structures and retention strategies in compliance with Indian labour laws.

‍Compliance and Documentation: Wisemonk ensures your GCC complies with the provisions of the Indian Contract Act, 1872, and labour laws. We assist in drafting employment contracts, ensuring they include all necessary terms and conditions, and help you navigate the complex landscape of state and central regulations.

‍Foreign Nationals: We guide you through the visa requirements and social security considerations for foreign nationals, ensuring seamless integration into your GCC.

‍Data Privacy: Our experts help you comply with data localization requirements, ensuring your GCC adheres to the PDPB and SPDI Rules for data storage and transfer.

‍Environmental Compliance: Wisemonk assists in obtaining environmental clearances, implementing pollution control measures, and ensuring compliance with environmental laws.

By partnering with Wisemonk, you can focus on leveraging India's talent pool and business-friendly environment while ensuring your GCC operates within the legal framework, reducing the risk of non-compliance and fostering a positive work environment.