Employment Agreement Generator (India)

About the Employment Agreement Generator (India)

Choose an appointment letter (a letter from the employer that the employee signs to accept) or a two-party employment agreement, and permanent (with probation) or fixed term employment. Fill in the employer, the employee, the role, hours, leave, the monthly salary components and the notice period. The generator writes the appointment, duties, place of work, probation or term, working hours and overtime, salary and statutory benefits, leave, conduct, confidentiality, ownership of work, optional non-solicitation, notice and termination, full and final settlement, and a salary-structure annexure with the cost to the employer.

It follows the four Labour Codes: a letter of appointment for every employee (OSH Code s.6(1)(f)), monthly wages before the 7th and final wages within two working days of exit (Code on Wages s.17), and gratuity for fixed-term staff after one year (Industrial Relations Code s.2(o)). The checks work out wages under the Codes with the 50% rule, flag hours and leave below the law for workers, and warn that a non-compete after employment is void under s.27 of the Contract Act. A generic template, not legal advice.

Common uses

• Startups and small businesses issuing appointment letters that meet the OSH Code requirement for every employee.
• HR teams drafting fixed-term contracts with the equal-treatment and gratuity terms the IR Code requires.
• Checking whether a salary structure keeps wages at half of the pay before an offer is made.
• Employees reading an offer: what the notice, non-compete and final-settlement clauses should say.

What the Labour Codes require in an appointment

• Letter of appointment for every employee. An employer must issue one on appointment, with the information and in the form prescribed by the appropriate Government; employees appointed earlier had to receive one within three months of the Code starting (OSH Code 2020, s.6(1)(f); S.O. 5321(E)). The Code applies to establishments with ten or more workers (s.2(1)(v)).
• Hours and overtime for workers: not more than 8 hours a day (s.25) and six days a week (s.26); overtime only with the worker’s consent, at twice the rate of wages (s.27).
• Annual leave for workers: one day for every 20 days worked once 180 days are worked in the calendar year; up to 30 days can be carried forward (s.32).
• Paying wages: monthly wages before the end of the 7th day of the next month (Code on Wages s.17(1)), by bank credit or other permitted mode (s.15), with only the deductions the Code allows, never more than half the wages (s.18).
• Equal pay: no discrimination on the ground of gender in wages or recruitment for the same or similar work (Code on Wages s.3).

Wages under the Codes and the 50% rule

“Wages” in the Code on Wages 2019 (s.2(y)) and the Code on Social Security 2020 (s.2(88)) means all remuneration, including basic pay, dearness allowance and retaining allowance, but excluding items such as house rent allowance, conveyance allowance, the employer’s provident fund contribution, overtime, commission, statutory bonus and gratuity. If the excluded payments are more than one-half of all remuneration, the excess is added back to wages. Provident fund, gratuity and other wage-linked dues are worked out on this figure, which is why a very low basic pay no longer reduces them.

The tool applies the rule to the fixed monthly components you enter, treating HRA and conveyance as excluded and the other allowances as wages. Variable pay and employer contributions are left out of the test.

Provident fund, gratuity and other benefits

• Provident fund: the Code’s provident fund chapter applies to establishments with twenty or more employees (First Schedule). Membership is mandatory for wages up to Rs. 25,000 a month (S.O. 5109(E)). The employee contributes 12% of wages; the employer contributes 12%, of which 8.33% of wages up to the ceiling goes to the pension scheme.
• Gratuity: payable after five years’ continuous service on resignation, retirement or superannuation, and without the five years on death, disablement or the end of a fixed term; 15 days’ wages for every completed year (monthly wages ÷ 26 × 15), pro rata for fixed-term staff (Code on Social Security s.53), paid within 30 days (s.56(3)). The gratuity chapter applies to factories, mines, plantations and to shops and establishments with ten or more employees.
• Maternity benefit: up to 26 weeks (12 weeks with two or more surviving children), after 80 days’ work in the previous twelve months (s.60).

Fixed term employment

A fixed term employee is engaged on a written contract for a fixed period. Their hours, wages, allowances and benefits cannot be less than those of a permanent worker doing the same or similar work; they get all statutory benefits in proportion to their service; and they are eligible for gratuity after one year (Industrial Relations Code 2020, s.2(o)). The employment ends when the term ends, and that is not retrenchment (s.2(zh)(iv)). Retrenching a worker with a year’s continuous service needs one month’s notice or wages instead, and compensation of 15 days’ average pay per completed year (s.70).

Non-compete and non-solicitation clauses

An agreement that restrains anyone from a lawful profession, trade or business is void to that extent (Indian Contract Act 1872, s.27). The Supreme Court distinguishes a restriction that applies during employment — such as a promise to work only for the employer, which is valid (Niranjan Shankar Golikari v Century Spinning & Mfg Co, AIR 1967 SC 1098) — from one that applies after it ends, which is void (Superintendence Co. of India v Krishan Murgai (1981) 2 SCC 246). That is why this tool includes exclusive service during employment and continuing confidentiality, makes the post-employment non-compete optional with a warning, and keeps any non-solicitation short.

Leaving: notice and full and final settlement

Notice periods are contractual; the tool lets you set one for probation and one afterwards, with salary in lieu. When the employment ends, wages must be paid within two working days of removal, dismissal, retrenchment or resignation (Code on Wages s.17(2)); a worker’s wages for unused leave are also due within two working days (OSH Code s.32(1)(vi)); and gratuity, if due, within 30 days (Code on Social Security s.56(3)). Work the employee creates in the course of employment belongs to the employer unless agreed otherwise (Copyright Act 1957, s.17(c)); the IP clause also assigns other rights in writing.

Signing and stamp duty

Print two copies; the employer’s signatory signs and the employee signs to accept, keeping one copy each. An employment agreement is generally stamped as an “agreement or memorandum of an agreement” not otherwise provided for (Article 5(c) of Schedule I to the Indian Stamp Act 1899, and the matching article of your State’s stamp law); the duty is set by each State, so check your State’s rate. Employment contracts are not among the documents excluded from electronic signatures by the Information Technology Act 2000 (First Schedule).

Sources

• Occupational Safety, Health and Working Conditions Code 2020 — ss.1 (S.O. 5321(E)), 2(1)(v), 6(1)(f), 25–27, 32
• Code on Wages 2019 — ss.1 (ss.1–41 and most other provisions, S.O. 5322(E)), 2(y), 3, 15–18
• Code on Social Security 2020 — ss.2(88), 53, 56, 60, First Schedule (S.O. 5319(E)); EPF wage ceiling S.O. 5109(E)
• Industrial Relations Code 2020 — ss.2(o), 2(zh), 70 (S.O. 5320(E))
• Indian Contract Act 1872 — s.27; Superintendence Co. of India v Krishan Murgai (1981) 2 SCC 246; Niranjan Shankar Golikari v Century Spinning AIR 1967 SC 1098
• Copyright Act 1957 — s.17(c)
• Child and Adolescent Labour (Prohibition and Regulation) Act 1986 — ss.3, 3A

Limitations

• A generic template, not legal advice. Senior executive contracts, ESOPs, training bonds, retainers and contracts governed by standing orders or a settlement need a lawyer.
• States prescribe the particulars or form of the appointment letter in their rules under the OSH Code, and their Shops and Establishments laws can add requirements; check yours.
• Minimum wages, the ESI wage limit, statutory bonus and the gratuity ceiling are notified by governments and are not checked here.
• The wages calculation uses the fixed monthly components entered; overtime, commission, bonuses and reimbursements are not included.
• The first DOCX or PDF download needs a connection to load the document engine; Copy and Print work offline.

Privacy

Everything happens in your browser. Names, addresses and salary figures are not uploaded or stored by MySmartCoPilot. If you tick Keep a draft in this browser, the form is saved in this browser’s local storage until you untick it — leave it off on a shared computer.