As an employee you should know your rights, as an employer you should know your obligations - but you should not leave the implementation to third parties or the staff themselves. Especially in subsidiaries or other presences abroad, it is important to know and implement the applicable laws, regulations and recommendations. 

Other countries other manners. This also applies to the laws and legal requirements that you must adhere to. At the same time, it is important to know these well and to apply them to your own company in order to avoid misuse. As in many other areas, German or European requirements cannot be transferred 1:1 to the Indian workforce. The requirements there must be observed, understood and integrated into company policy - in the form of an HR policy. 

HR policy as a preventive measure

An important part of this HR policy is social security (Provider fund). If companies do not set clear regulations in this regard, they can be confronted with enormous costs. 

The same applies to retirement age and retirement. Here, too, there are rules and laws that determine the age. However, since there are different retirement limits, employees quickly receive vague information and demands that are disadvantageous for the company or even unjustified. It is essential that retirement limits are defined before employment contracts are signed in order to avoid unnecessary costs. In our work with European companies in India, we have experienced cases where 5 to 6-digit euro amounts had to be paid.

Identify and mitigate tripping hazards

In addition to the classic vacation days that we also know in Germany, India has the so-called casual leave and designated sick days. Unused vacation days can usually be accumulated and carried over to subsequent years. 

  • The limit of these accumulated vacation days, i.e. the maximum number of days accumulated, depends on the company. For example, if a company has set a limit of 45 days and allocates 15 days per year, employees can accrue all of their vacation for three years if it is 15 days per year.  
     
  • The accumulated vacation days can be paid out. However, you are only entitled to payment if, for example, an employee leaves the company or vacation requests have not been approved by a certain point in time. In our example, it would not be mandatory to have your vacation paid out after three years. Because the employee does not leave the company and has had the opportunity to take vacation in the meantime.  
  • Vacation days should be submitted for a vacation. Sounds logical, but it is not always implemented in reality. Instead of vacation days, sick leave or casual leave -Days used so as not to 'waste' the vacation days. Because sick days and casual leave-Days cannot be carried over to the following year nor paid out. 

As a company, you should know, among other things, how many vacation days can be accumulated or ensure that the correct days are used (sick days for illness, vacation days for trips, etc.). If staff takes advantage of their lack of knowledge and misleads the employer, the company can suffer financial damage.

Another example from our practice is how we deal with public holidays. Due to the many religious communities in India and the diverse public holidays, companies have to decide at the beginning of the calendar year which public holidays will actually be days off. As a rule, the choice depends on the location and the religious communities represented there and the religious affiliation of the employees.  

Protect against serious consequences

In order to prevent such 'pitfalls', clear guidelines must be developed, communicated and, above all, consistently implemented. The HR policy, which, among other things, also the Travel or Leave policy must be integrated into the corporate culture. If these guidelines are missing, a free interpretation and own rules can arise.  

We work with you to develop policies that are appropriate for your company, which contain the relevant guidelines and enable clear corporate standards. 

Missing guidelines or incomplete ones Policies can lead to companies being held liable in certain extreme situations. This can result in criminal prosecution of the management or even prison sentences.  

If an HR policy already exists in the company, it is important to check its content and completeness. The same applies here: A clear guideline as a preventive measure protects the company from possible discrepancies and limits disputes. 

Discover differences and optimize measures

As a company with business in India, you should not blindly rely on the fact that all information that ends up in the European headquarters corresponds to the actual specifications and, above all, is in the economic sense of the company - regardless of the location of the subsidiary.  

With defined, concrete guidelines that we can develop together with you, there is no room for 'misunderstandings' or the staff or HR department's own interpretations. Based on our experience, we know what consequences certain steps will entail and can therefore proactively develop appropriate policies for every company. 

This allows us to discover differences and optimize them with appropriate measures. The development and implementation of company guidelines also enable more transparency in the cooperation between the parent company and the presence abroad.  

Would you like to check your guidelines or need support in developing (new) guidelines that suit your company? Call us or write to us a message.