While India does not have a robust social security regime, there are certain key legislations that govern employee benefits in India:
ESI Act / Employees’ State Insurance Act, 1948: Benefits of this Act extend to establishments where 10 or more employees are engaged (subject to any State rules), and to all employees earning less than INR 21,000 (~USD 300) per month.
EPF Act / Employees’ Provident Fund and Miscellaneous Provisions Act, 1952: Benefits under this Act typically extend to establishments where there are 20 or more employees. Employees earning less than INR 15,000 per month (~ USD 211) have to compulsorily contribute to schemes under the EPF Act, whereas those earning above this limit may opt out subject to certain conditions.
PGA Act / Payment of Gratuity Act, 1972: the PGA Act contemplates payment of gratuity to all employees (whether workmen or not) engaged in establishments (including factories, shops and other commercial establishments) in which 10 or more persons are employed. An employee is entitled to gratuity if he/she has rendered continuous service for not less than 5 years (except in the case of death or disability), under any of the following circumstances, namely: Superannuation, Retirement or resignation, or Death or disablement due to accident or disease.
Healthcare and Insurances
The main legislation applicable to the private sector contemplates medical benefits for employees in contingencies such as sickness, maternity, disablement and death due to employment injury and provides medical care to insured persons and their families. Other than the above, most large employers in the private sector do provide medical insurance benefits to their employees and their immediate dependents, and bear the costs in this regard.
The FA Act and some of the S&E Acts state that establishment shall remain closed on at least 1 day of every week (this is typically Sunday). However, the S&E Acts of certain States (for instance, Maharashtra) also contemplate that establishments may be open for all days in a year, subject to the employees being given a weekly off and certain other conditions being satisfied.
National and Public Holidays
Across India, there are certain national holidays namely: (i) Republic Day (26th January); (ii) Independence Day (15th August); and (iii) birth anniversary of Mahatma Gandhi (2nd October). In addition to these, every employee would be entitled to other holidays, as may be declared by the concerned State Governments. In case an employee is required to work on any of these holidays, he/she will be entitled to twice the wages and also a compensatory off day.
Privileged Leave or Earned Leave
The S&E Acts prescribe different privilege leave/earned leave requirements, and in some States employees may avail privilege leave only after being in service for a certain period (such as 3 months or 1 year). The S&E Acts also allow unutilized privilege/earned leave to be carried forward at the end of the year (subject to a limit), and also contemplate that any unutilized leave may be encashed at the time of separation from employment.
Maternity / Paternity Leave
There is no separate category of paternity leave recognized under Indian law, though a bill has been introduced in this regard seeking paternity leave of 15 days across all sectors. Currently however, some corporates and public sector departments do provide paternity leave to their employees, as prescribed in the concerned leave policy/rules. With respect to maternity leave, India has recently amended its MB Act (as described in the earlier sections), in terms of which women employees who have been in service for 80 days are entitled to paid maternity leave of 26 weeks.
Sick leave typically cannot be carried forward or encashed and are not subject to any minimum service requirements.
No specific category of disability leave is recognized in India.
Other Required or Typically Provided Leave
Some of the S&E Acts also recognize casual leave, which can be availed by employees in unforeseen situations, subject to the approval of an organization. This category of leave is also not typically carried forward or encashed.
Pensions: Mandatory and Typically Provided
Employees who fall within the purview of the EPF Act will be entitled to monthly pension, as per the rules of the Pension Scheme. Other than this, employees in the public sector will be entitled to pension as prescribed in their service rules.
Other Required or Typically Provided Benefits
In addition to the above, various employers provide other benefits to employees (which also have certain tax benefits) such as food coupons, conveyance allowance, reimbursement of mobile phone and internet expenses. There are also specific benefit programs / labour welfare funds prescribed for certain sectors.