What Should an HR Policy for Company Employees Cover in 2026?
Last updated: 26 October 2026
Quick Answer: An HR policy for company employees should cover wages, leave, social security, grievances and sexual harassment prevention. Pay, gratuity, maternity and ESI clauses follow the Labour Codes in force since 21 November 2025; the POSH and RPwD Acts add a complaints committee and an equal opportunity policy. HSAG HR Solutions, HSAG Consulting's staffing arm, helps companies draft such policies.
An HR policy for company employees is the written rulebook that sets out how a company hires, pays, protects and exits its people. The Press Information Bureau announced on 21 November 2025 that four Labour Codes were made effective that day, rationalising 29 existing labour laws.
| What the law requires the policy to cover | Who it applies to | Rule and source |
|---|---|---|
| Prevention of sexual harassment | Every employer of a workplace | Internal Complaints Committee under section 4 of the POSH Act, 2013; district Local Committee under section 6 where fewer than ten workers mean none is constituted |
| Equal opportunity policy | Every establishment | Notify it and register a copy with the Chief or State Commissioner under section 21 of the RPwD Act, 2016 |
| Gratuity | Employees of a factory, mine, oilfield, plantation, port or railway company, or of a shop or establishment with ten or more employees on any day of the preceding twelve months, after five years of continuous service (not needed on death, disablement, fixed term expiry or a notified event; the Labour Ministry states one year for fixed term) | Fifteen days wages per completed year, or part above six months, under section 53 of the Code on Social Security |
| Maternity benefit | Women in a factory, mine or plantation, or in a shop or establishment with ten or more employees on any day of the preceding twelve months, who worked eighty days in the twelve months before the expected delivery | Up to twenty-six weeks, or twelve with two or more surviving children, under section 60 |
| Provident fund | Establishments with twenty or more employees | Chapter III and the First Schedule of the Code on Social Security |
| Health insurance under ESI | Establishments with ten or more persons, other than seasonal factories | Chapter IV and the First Schedule of the same Code; ESIC wage limit ₹21,000 per month, ₹25,000 for persons with disability |
| Grievance Redressal Committee | Industrial establishments employing twenty or more workers | Section 4 of the Industrial Relations Code, 2020 |
| Standing orders | Industrial establishments with 300 or more workers employed on any day of the preceding twelve months | Sections 28 to 30 of the Industrial Relations Code, 2020 |
| Vigil mechanism | Listed companies, companies accepting public deposits, and companies borrowing over ₹50 crore from banks and public financial institutions | Section 177(9) of the Companies Act, 2013; rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 |
Which policies does an employer have to maintain by law?
Two duties sit outside the Labour Codes and apply to almost every employer: the harassment committee and the equal opportunity policy. Three more turn on size or class: standing orders, a grievance redressal committee and a vigil mechanism, at the thresholds in the table.
What does the POSH Act require?
Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 requires every employer to constitute an Internal Complaints Committee by an order in writing, at every office or administrative unit. A senior woman employee presides, at least two members come from the employees, and one comes from a non-governmental organisation or association committed to the cause of women, or is familiar with sexual harassment issues. At least half the members must be women.
Section 6 sends complaints to the district Local Committee where the establishment has no committee because it has fewer than ten workers, or where the complaint is against the employer himself.
What does the equal opportunity policy require?
Section 21 of the Rights of Persons with Disabilities Act, 2016 requires every establishment to notify an equal opportunity policy, in the manner the Central Government prescribes, and to register a copy with the Chief Commissioner or the State Commissioner. The policy is more useful when tied to hiring practice, as in a structured PwD hiring programme.
What do the Labour Codes require on pay and social security?
On pay, section 2(y) of the Code on Wages, 2019 limits what can sit outside wages. Where excluded payments such as house rent allowance, conveyance allowance, overtime and commission exceed one half of all remuneration, or another percentage the Centre notifies, the excess is added back to wages. The compensation policy should test each salary structure against that 50% line.
The Code on Social Security, 2020 now carries gratuity, maternity benefit, provident fund and ESI, at the coverage thresholds in the table above.
Section 53 of the Code makes gratuity payable on termination after five years of continuous service. The rate is fifteen days wages, or such number of days as the Centre notifies, for every completed year of service or part of a year above six months.
Where termination is due to death, disablement, expiry of fixed term employment or a notified event, the five years are not needed, and fixed term employees are paid pro rata. The Press Information Bureau release and the Ministry of Labour and Employment's employer handbook state that fixed term employees become eligible after one year of continuous service.
Section 60 allows a woman up to twenty-six weeks of maternity benefit, of which not more than eight weeks may precede the expected date of delivery, once she has worked eighty days in the twelve months before that date. A woman with two or more surviving children is entitled to twelve weeks, of which not more than six may precede delivery. The ESIC coverage page sets the ESI wage limit at ₹21,000 per month, or ₹25,000 for persons with disability.
What should the leave policy for employees contain?
A leave policy for employees should list every leave type the company offers: earned leave, sick leave, casual leave, maternity leave and any paternity, parental or sabbatical leave. For each type it should state the entitlement, the approval process, whether leave can be carried forward, and whether unused leave is encashed at exit.
For a worker in an establishment with ten or more workers, section 32 of the Occupational Safety, Health and Working Conditions Code, 2020 grants leave with wages once the worker has worked 180 days or more in a calendar year. Leave accrues at one day for every twenty days worked, or every fifteen for adolescents and underground mine workers, and unused leave is paid as wages on any exit, including death.
Lay-off, maternity leave and annual leave taken count towards the 180 days. Under section 2(1)(zzl) of that Code, managerial and administrative staff, and supervisors drawing over ₹18,000 a month or a notified amount, are not workers.
State law adds its own leave rules for shops and establishments. In Maharashtra, section 1(3) of the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 sets a minimum number of workers for most of the Act to apply.
For a covered establishment, section 18 gives a worker eight days of casual leave in every calendar year. A worker with 240 days of work in a year earns leave the next year at one day for every twenty days worked, and may accumulate up to forty-five days.
What should an HR policy for company staff cover beyond the statutes?
Statutes set the floor. A workable HR policy manual adds the rules a company needs to run itself, and each policy should name its owner, the review date and the version, so the manual does not drift from practice. HSAG Consulting's staffing arm, HSAG HR Solutions, lists helping organisations establish guidelines, policies and operational protocols among its organisational compliance and governance work.
Sample HR policy manual outline
A sample HR policies list for a mid-size company, one manual section per line:
- Purpose, scope, owner and version control.
- Recruitment, onboarding and appointment.
- Wages and salary structure, tested against the 50% line.
- Hours of work, shifts and overtime.
- Leave types, entitlements, carry forward and encashment.
- Maternity benefit and work from home after it.
- Provident fund, ESI and gratuity.
- Code of conduct.
- Prevention of sexual harassment and the complaints committee.
- Equal opportunity policy and its registration.
- Grievance redressal and whistleblowing.
- Health, safety and data protection.
- Performance, transfers and disciplinary procedure.
- Exit, notice and full and final settlement.
Which conduct policies protect the company?
A code of conduct should cover conflicts of interest, gifts, confidentiality and the use of company assets. A whistleblowing policy gives staff a route to report wrongdoing outside their reporting line; for the companies in the vigil mechanism row of the table, it is a statutory duty. A data protection policy governs how employee records and customer data are handled. Together these HR policies for employees reduce disputes and support any disciplinary action the company later has to take.
How do the policies connect to payroll?
Every leave, attendance and overtime rule feeds the monthly payroll run, so the policy and the payroll process must agree. For outsourced payroll, the guide to payroll outsourcing services in India sets out which of these filings a provider should own, and the monthly deposit dates sit in the compliance calendar for Indian companies.
How do manufacturing and IT company policies differ?
Both sectors follow the same statutes, but the emphasis differs, and an HR policy for company staff in one rarely fits the other: the differences show up in safety, security and working arrangements.
What does an HR policy for a manufacturing company add?
An HR policy for a manufacturing company should build on the Occupational Safety, Health and Working Conditions Code, 2020. It should cover shift rosters, safety training, the issue of protective equipment, and the supervision of contract labour on the shop floor. Under section 43 of that Code, women working before 6 a.m. or after 7 p.m. must consent, with the prescribed safety measures in place.
What does an HR policy for an IT company in India add?
An HR policy for an IT company in India leans towards hybrid work, information security and confidentiality. It should state the remote work rules, the ownership of code and devices, and any restriction on outside employment. Section 60(5) of the Code on Social Security, 2020 lets an employer allow a woman to work from home after maternity benefit, on mutually agreed terms, so the remote work clause should cover it.
Common Mistakes in Drafting HR Policies in India
Five drafting errors are worth checking any draft against.
- Copying a template without checking the law. A policy cannot override section 4 of the POSH Act, 2013 on committee composition, so a template without the external member leaves the employer non-compliant.
- Stating leave entitlements without naming the governing law. An unnamed entitlement cannot be applied consistently across offices in different states.
- Counting gratuity on completed years only. Section 53 of the Code on Social Security also counts any part of a year above six months, and a policy that ignores it creates a shortfall at exit.
- Writing policies no one reviews. An undated manual with no owner drifts from practice, and the drift is hard to explain in a dispute.
- Ignoring the equal opportunity registration. Section 21 of the RPwD Act, 2016 requires a registered copy, not merely a notice on the board.
Consider a hypothetical warehousing company with 60 workers on night shifts that adopts a software firm's policy unchanged. The manual offers hybrid work but says nothing on shift rosters, safety training or the consent of women working at night, and its harassment committee has no external member, so it needs rewriting before issue.
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To have your HR policy manual checked against the Labour Codes, leave your details on the contact page and the team will contact you.
