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Hiring Remote Workers in India: A Guide for UK Employers

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For a UK Employer, there are many advantages to hiring an employee based in India. The talent pool is large to choose from, and in business culture, English is the main language used. There are, however, differences in culture that are important to know when developing a business relationship. Knowing these differences can enhance the overall relationship and lead to a more positive, respectful, and understanding work environment.

What to Consider When Hiring a Remote Worker in India

What are some cultural differences to be aware of?

It is important for a UK employer to be aware of certain facets of Indian culture during the recruitment stage. In India, job titles and permanent jobs hold significant weight. Contract and freelance jobs aren’t as common in India as they are in the UK, and so when offering a role to an Indian employee, UK employers should keep in mind that permanent contracts will hold far more appeal. Job titles also carry more weight in India than in the UK, with social status, eligibility for a mortgage, and even marriage prospects all affected by their role. The UK company itself is also significant from an Indian employee’s perspective. 

UK culture is also more open than the Indian culture. Though UK citizens are notoriously polite, they are also more likely to convey what they are thinking. In comparison, Indian workplace culture more closely follows the ethos of, if you have nothing nice to say, don’t say it at all. It may be harder to gain an Indian employee’s perspective and opinion on tasks as it is encouraged to avoid offending the other person. Therefore, the UK employer may need to press their Indian employee and emphasize that honest opinions are encouraged.

What is the working style like in India?

UK employers must be sensitive to certain differences, such as how managers and employees in India are generally more formal and will appear to have more hierarchy than in the UK. This is exemplified in how Indian workplaces will generally have clear indications on who the leaders are and where the employees are required to report to.

This is in contrast to the UK, where the working structure is flatter. Furthermore, Indian culture overall has a more collective mindset, whereas the UK culture is more individualistic. This generally means that Indian culture has more focus on group efforts, and how their actions affect the group they are in. In comparison, the UK (along with most Western societies) regard their actions and status as an individual. In a workplace context, goals are more personal in western culture, whereas goals are a group effort in Indian (and many other Eastern) cultures.

What are the typical working hours in India? 

The typical working hours in India are between eight to nine hours a day, with a weekly limit of 48 hours.

What is the time difference between India to the UK?

The time difference between the UK and India is compatible during working hours. 9 am in the UK is 2:30 pm in India. This means that the UK and India will share at least two hours with India depending on the working hours that the UK worker sets.

How do you recruit employees in India?

The largest recruitment platform in India is Naukri. Other job boards that UK employers should consider include LinkedIn, Times Jobs, Monster India, Indeed, Shine, Freshersworld, Glassdoor, Job Sarkari, Upwork, and Placement India.

How do you interview remote workers in India for a UK company? 

Similarly to the UK, Indian workers will expect interviews to be formal, structured, and even potentially have some psychometric testing. There are general guidelines to follow when it comes to remote recruitment. The use of video conferencing and calendar scheduling software is extremely helpful, especially if you have a lot of potential candidates. 

How do Indian CVs differ from British CVs?

Indian CVs tend to be longer and can span several pages. Indian CVs typically contain an entire career history and details on each position held. Although not mandatory, a professional photo of the candidate may also be included with the CV. Some Indian resumes also contain some personal information such as race or gender. Similarly, UK CVs also usually provide an overview of the employee’s entire career, sometimes even detailing academic grades and hobbies.

However, UK CVs usually manage to fit everything into two pages, so British employers should prepare themselves to either receive a long CV or specify in the job description to only apply with a page limit on the CV (this may even test your future employee’s attention to detail!).

Is making an offer to an employee in India different than hiring in the UK? 

It’s commonplace to negotiate the salary after extending a job offer in India. Salaries will often be quoted in terms of CTC or cost to the company which will include pay as well as any other costs the company will incur due to employment. This could include benefits like health insurance, the cost of a  driver or company car, subsidies for food, clothing, or equipment, contributions to provident fund and will also include your gratuity amount. Generally, the take-home pay amounts to about 70% of the CTC.  

Salaries are also offered using the Lakh unit, which is equal to 100 000.  For example, 150 000 rupees is 1.5 lakh rupees.

How much annual leave do employees get in India? 

UK employers should note that each province in India has its own Leave Rules governed by the respective state government acts. Usually, the employee will be entitled to 15 days of annual leave (at 1.25 days of paid leave for every month of service). Employees additionally are entitled to 12 days of paid casual leave, and 10 days for public holidays (this may also differ slightly on the province). 

More information on annual leave in India can be found in this guide.

What are the national public holidays in India?

Officially, only three holidays are fully covered national public holidays. These are Republic Day (January 26), Independence Day (August 15), and Mahatama Gandhi’s Birthday (October 2). If the employee is required to work on that day, the relevant state may increase wages for that day or allow a claim for compensatory leave. It is, however, standard for companies to provide 10-12 days paid off for public holidays, depending on which state as different public holidays are celebrated across the country. Larger companies will have standardized public holiday schedules across all locations. 

At Shield, we offer our employees the choice of 3 different public holiday schedules. It’s a bit tricky to keep track of but it can be helpful for employees to match against their religious preferences. 

We offer 20 days of annual leave and classify the 12 casual leave days in India’s legislative framework as sick days. 

How to Pay Remote Employees in India 

Do Indian employees get paid differently than UK employees?

Salaries in India are structured with a number of components totaling a net salary figure. This includes a basic salary, allowances such as for housing, transport, health, and can include a number of perquisites as well. Both the UK and India are familiar with monthly payments, and the UK employer will be expected to make the relevant deductions.

Do you have to pay overtime in India? 

Overtime is the norm and must be paid under employment law. However, this amount is usually capped per month.

What are some common benefits that UK employers offer remote employees in India?

Remote work inherently provides a number of benefits including increased productivity, shorter (if any) commute times, flexible work scheduling, and more savings for the employer and employee. Many foreign employers provide additional allowances to their employees such as payment of business expenses, and the ability to work from a co-working space if so desired. Employers commonly pay a stipend for reasonable expenses such as travel where necessary.

Can employers pay a stipend for expenses?

At Shield GEO, we provide our remote employees in India with a health and wellbeing allowance and cover our employees under our Professional Indemnity and Public Liability insurance as well as any other employment-related insurances required by the laws of the host country such as workers compensation or medical insurance. We also provide our employees with a stipend for their internet expenses and the ability to work from a co-working space, if so desired.

How is work equipment provided to remote employees in India?

Employers also commonly provide a stipend to remote employees for work equipment such as a laptop and other peripherals. Some employees in India are given free rein to choose their own equipment as well, provided their employer’s approval. In this case, employers can provide a stipend up to a certain amount or pay the full amount. Employers must remember to take note that some electronics are expensive to buy locally, and some items may be difficult to ship to new employees due to customs.

At Shield GEO, we ensure our Indian remote employees have the correct equipment to complete their day-to-day tasks efficiently. We provide our employees with a laptop, keyboard and mouse, and a headset for conferencing. At our employee’s primary place of work, we also provide a monitor, desk, ergonomic chair, and desk lamp.

Do Indian employees have to be paid in Indian Rupees (INR)?

Yes, remote employees in India must be paid in Indian Rupees. India has strict controls on its currency and holding foreign currencies. Employees might ask for their salary to be set in USD, but they will receive it in INR unless they hold a foreign currency account in India. These accounts are strictly regulated and their financial activity is monitored. To pay employees in other currencies, employees must hold a foreign currency account in India. In most cases, remote employees in India for companies in the UK must receive payment in Indian Rupees.  

What is required for issuing payslips in India?

All employers must issue their Indian employees with payslips. An Indian payslip will require personal information such as age, start date, bank account information, and job title. It will also require leave information and calculations, such as a balance of leave available versus the leave taken.

The earnings and deduction portion of the payslip will find the breakdown of the compensation they are receiving, alongside the deductions taken from their pay to arrive at their net pay or what is deposited in their bank account each month. They can also see what they contribute to their pension/retirement, which is titled under the Provident Fund. 

Social Security in India Explained

What are the employer’s social security obligations in India?

Employers will have to pay social security. They are required to pay 12% of basic wages into the Provident Fund. There is a 1% Employer PF administration charge so at Shield GEO we reflect this as 13% ER PF on our quotes and LOAs.

PF is not mandatory for salaries above INR 25000. However, we still recommend our clients continue to pay their employees PF regardless of their salaries. 

Do Indian employees have to pay social security?

Employees have to contribute 12% of their monthly base salary towards the Provident Fund Scheme and 1.75% to the national insurance scheme. 

More information on India’s Social Security can be found here

What is the pension equivalent for remote employees in India?

The Employees’ Provident Fund Act encompasses the Provident Scheme, Pension Scheme, and the Employee Deposit Linked Insurance Scheme. The Provident Fund is most similar to the UK Pension, and in India, the employee can claim from their PF settlement after attaining 55 years of age and retires from service. 

Do Indian employees need health insurance? 

In India, health insurance is a voluntary but common benefit, especially for foreign employers. It is comparatively, a much lower expense than UK insurance premiums, and when the employer provides the insurance directly there is no tax impact for the employee.

Terminating Remote Employees in India

How is the termination process different in India than in the UK?

It is not a difficult termination process in India provided that the steps are followed and the employee is properly compensated. Similarly to the UK, notice periods and severance pay requirements will need to be strictly followed.

A detailed guide on termination and statutory notice periods in India can be found here.

Are there probation periods in India? 

There are no direct laws around probation periods, but it is customary to allow up to three months at the start of the contract. Each state will vary with notice period requirements. Typically, the worker is not entitled to any dismissal notice or payment in lieu of notice during the period of probation. 

Do you have to pay severance in India? 

UK employers are required to pay severance to employees in India. Employees who are dismissed are entitled to three different payments: severance, leave encashment, and gratuity payments. Severance payments are equivalent to fifteen day’s average pay for every completed year of continuous employment. 

Leave encashment is the entitlement to payment of wages for accrued and unused leave days up to the date of termination of employment. The employee will be entitled to 12 days of paid casual leave and 10 days of public holiday leave. Casual leave payment is customary, not statutory, so the UK employer can refuse to pay it out. 

Gratuity payments are relevant to employees who have worked continuously for an employer for at least five years. This payment is calculated with this formula: 

Gratuity = Last Drawn Salary × 15/26 × No. of Years of Service

The 15/26 reflects the 15 out of 26 working days per month, the ‘last drawn salary’ pertains to the basic salary + the dearness allowance, and the years of service must be rounded to the nearest full year. 

Gratuity is limited to INR 1,000,000. 

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