HR Policy and Employee Handbook Drafting

There is no single law requiring a handbook, but several laws require written rules. The Labour Codes make appointment letters mandatory, the IR Code requires standing orders for establishments with 300 or more workers, and the POSH Act requires an Internal Committee for employers with 10 or more employees. A handbook is the simplest way to meet all of these in one place.

The four Labour Codes replaced 29 central labour laws on 21 November 2025. Policies now need appointment letters for all workers, the new definition of wages, wage payment within set deadlines, consent-based overtime at double wages, women’s night work with consent and safeguards, and fixed-term parity. Old policies citing repealed Acts should be rewritten. For most businesses this is an edit, not a fresh start.

Under the Code on Wages, if excluded allowances exceed one-half of total remuneration, the excess is added back to wages. That affects PF, gratuity and bonus calculations. Your pay policy should define salary components so that basic pay and dearness allowance are at least half the total. We draft that definition and flag the payroll impact, so the payroll impact is known before year end.

Yes. Under the Labour Codes, fixed-term employees qualify for gratuity after one year of service, instead of the usual five. They must also get the same wages, allowances and benefits as permanent employees doing the same or similar work. Your handbook should state this clearly so contract periods and exits are handled correctly. Once it is written down, nobody has to argue it.

Every employer with 10 or more employees needs an Internal Committee under the POSH Act, 2013. It is led by a senior woman employee, has at least two employee members and one external member, and at least half its members must be women. Complaints can be made within three months of the incident and the inquiry must finish within 90 days. We draft the policy and the committee order together.

Only if you have 300 or more workers. The IR Code raised the threshold for standing orders to 300 workers, so most SMEs no longer need certified standing orders. Smaller employers still benefit from a written conduct and discipline policy, and those with 20 or more workers must set up a Grievance Redressal Committee. A written discipline policy protects both sides in an inquiry.

Within two working days of the resignation, removal, dismissal or retrenchment, under Section 17(2) of the Code on Wages, 2019. Your exit policy should set a handover process that fits this deadline, with gratuity and other statutory dues paid as their own laws require. Plan the checklist before the last working day and the two-day rule is easy to meet.

Under Section 32 of the OSH Code, a worker who has worked 180 days or more in a calendar year earns one day of annual leave for every 20 days worked. Shops and offices also follow the leave rules in the state shops Act. You can always give more than the minimum, and many employers do. We write the leave policy to the higher of the two, so you never fall short.

You need both for senior and key staff. The handbook sets rules for everyone and can be updated as the law changes. An employment agreement fixes individual terms such as pay, notice, confidentiality and IP ownership, and is signed by the employee. The appointment letter should refer to the handbook so that the policies bind. We can draft both together so they match.