Employment Agreement Adjustments in India

PTO, notice periods, bonuses, and more.

Updated on March 15th, 2023

Can we adjust paid time off (PTO)?

Yes, you may adjust PTO so long as it exceeds the statutory requirements.
Unlimited PTO is not a common concept in India. We can accommodate this by stating that your supported employees can take additional leave above the state’s statutory requirements upon approval from their manager. However, statutory leave should be exhausted before additional PTO comes into effect.

Can we adjust working hours?

Yes, working hours can be adjusted so long as they do not conflict with the statutory requirements in India. Overtime eligibility should be stated in the agreement if applicable due to a change in working hours.

Can we remove the notice period?

No, we cannot remove the notice period from an employment agreement in India. Please note that at-will employment is generally not recognized in India except in limited states where the employee is in a high-level managerial position. 

Can we remove or increase the probationary period?

Yes, the probationary period can be removed or enhanced at your discretion. We recommend a probationary period of three to six months for indefinite agreements, and one month to three months for fixed-term agreements.

Can we add commissions, bonuses, or ad hoc payroll items?

Yes. However, if the commissions or bonuses are subject to metrics that are lengthy, the commissions, bonus, and metrics should go into a separate Variable Compensation Plan.

How can we offer equity/stocks to our supported employees?

In India, we offer you the option of issuing equity as either “nonemployee” or “employee” grants. Two conditions apply:

  • For clients that issue equity as “nonemployee” grants, we do not facilitate withholding and payroll reporting unless the award is cash settled
  • For clients that issue equity as “employee” grants, we do facilitate withholding and payroll reporting.

How can we offer equity without signing a direct agreement with our supported employee?

We require you to directly issue the grant notice (i.e., side agreement) to your supported employee. This side agreement should not include any language that indicates a direct employer or employee relationship between you and your supported employee.