Sep 23, 2025
10 min read
10 Essential HR Policies Every Startup in India Must Have in 2025 (Statutory + Internal)
10 Essential HR Policies Every Startup in India Must Have in 2025 (Statutory + Internal)
10 Essential HR Policies Every Startup in India Must Have in 2025 (Statutory + Internal)
Learn the 10 HR policies every startup in India needs in 2025, from statutory compliance like POSH and maternity benefits to internal policies like ESOPs and wellness.
Learn the 10 HR policies every startup in India needs in 2025, from statutory compliance like POSH and maternity benefits to internal policies like ESOPs and wellness.
Learn the 10 HR policies every startup in India needs in 2025, from statutory compliance like POSH and maternity benefits to internal policies like ESOPs and wellness.
Learn the 10 HR policies every startup in India needs in 2025, from statutory compliance like POSH and maternity benefits to internal policies like ESOPs and wellness.
Author
Clapsa Editorial Team
For Indian startups, HR policies aren’t just about compliance; they are the foundation of workplace culture, employee trust, and legal safety. Many founders ignore HR policies until it’s too late, facing penalties, disputes, or high employee turnover rates due to confusion and loopholes.
This guide breaks down the must-have statutory HR policies (legally required in India) and the internal HR policies (best practices for startups) you should adopt in 2025 to build a compliant, transparent, and growth-ready workplace without getting into unnecessary hassles.
For Indian startups, HR policies aren’t just about compliance; they are the foundation of workplace culture, employee trust, and legal safety. Many founders ignore HR policies until it’s too late, facing penalties, disputes, or high employee turnover rates due to confusion and loopholes.
This guide breaks down the must-have statutory HR policies (legally required in India) and the internal HR policies (best practices for startups) you should adopt in 2025 to build a compliant, transparent, and growth-ready workplace without getting into unnecessary hassles.
For Indian startups, HR policies aren’t just about compliance; they are the foundation of workplace culture, employee trust, and legal safety. Many founders ignore HR policies until it’s too late, facing penalties, disputes, or high employee turnover rates due to confusion and loopholes.
This guide breaks down the must-have statutory HR policies (legally required in India) and the internal HR policies (best practices for startups) you should adopt in 2025 to build a compliant, transparent, and growth-ready workplace without getting into unnecessary hassles.
1. Why HR Policies Matter for Startups in India
Compliance → Protects you from legal penalties.
Clarity → Employees know their rights, benefits, and duties.
Culture → Policies set the tone for fairness and transparency.
Scalability → Strong HR systems make it easier to grow without chaos.
1. Why HR Policies Matter for Startups in India
Compliance → Protects you from legal penalties.
Clarity → Employees know their rights, benefits, and duties.
Culture → Policies set the tone for fairness and transparency.
Scalability → Strong HR systems make it easier to grow without chaos.
1. Why HR Policies Matter for Startups in India
Compliance → Protects you from legal penalties.
Clarity → Employees know their rights, benefits, and duties.
Culture → Policies set the tone for fairness and transparency.
Scalability → Strong HR systems make it easier to grow without chaos.
2. Statutory HR Policies (Legally Mandatory in India)
These are required by Indian labour laws. Failing to implement them can result in penalties or legal disputes.
1) Anti-Sexual Harassment (POSH) Policy
Law: Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013
Requirement: Every company with ≥10 employees must have a POSH policy, constitute an Internal Complaints Committee (ICC), and conduct awareness training. Complaints must be handled per legal timelines.
Source: POSH Act PDF – DOE
2) Payment of Wages Policy
Law: Payment of Wages Act, 1936 and Code on Wages, 2019
Requirement: Employers must pay salaries on time (usually by the 7th/10th of the month), maintain wage records, and restrict unauthorised deductions.
Source: Payment of Wages Act PDF
3) Minimum Wages Policy
Law: Minimum Wages Act, 1948 (now under Code on Wages, 2019)
Requirement: Employers must pay at least the minimum wage prescribed by the state government for scheduled employment. Rates vary by state and industry.
Source: Minimum Wages Act (IndiaCode)
4) Gratuity Policy
Law: Payment of Gratuity Act, 1972
Requirement: Companies with ≥10 employees must pay gratuity to employees with 5+ years of continuous service. Payment is due upon resignation, retirement, or termination (with exceptions).
Source: Payment of Gratuity Act PDF
5) Equal Opportunity & Non-Discrimination Policy
Law: Equal Remuneration Act, 1976 + Rights of Persons with Disabilities Act, 2016
Requirement: Equal pay for equal work regardless of gender, no discrimination in hiring, and workplace accessibility for persons with disabilities.
Source: Equal Remuneration Act
6) Shops & Establishments Policy (State-Specific)
Law: State-specific Shops & Establishments Acts (e.g., Maharashtra Shops & Establishments Act, 2017)
Requirement: Register your startup under the state’s act. Rules include work hours, overtime, weekly offs, leave entitlements, and record-keeping.
7) Maternity Benefit Policy
Law: Maternity Benefit Act, 1961 (amended 2017)
Requirement: Female employees are entitled to 26 weeks of paid maternity leave (subject to eligibility). Companies with 50+ employees must provide crèche facilities.
Source: Maternity Benefit Act (Govt PDF)
8) Social Security Policies – EPF & ESI
Law: Employees’ Provident Fund Act, 1952 and Employees’ State Insurance Act, 1948
Requirement:
EPF: Mandatory for establishments with ≥20 employees; employers contribute 12% of wages.
ESI: Mandatory for establishments with ≥10 employees (threshold varies); covers medical benefits for employees earning ≤ ₹21,000/month.
9) Industrial Relations & Grievance Policy
Law: Industrial Disputes Act, 1947
Requirement: Employers must have procedures for grievance redressal, retrenchment, and termination compliance. Larger organisations may need standing orders and conciliation mechanisms.
Source: Industrial Disputes Act PDF
10) Exit & Termination Policy
Law: Governed under Shops & Establishments Act, Industrial Disputes Act, and other employment laws.
Requirement: Employers must define notice periods, reasons for termination, and ensure final settlement of wages, gratuity, and PF dues.
Source: Industrial Disputes Act PDF
For more government policies check the blog
2. Statutory HR Policies (Legally Mandatory in India)
These are required by Indian labour laws. Failing to implement them can result in penalties or legal disputes.
1) Anti-Sexual Harassment (POSH) Policy
Law: Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013
Requirement: Every company with ≥10 employees must have a POSH policy, constitute an Internal Complaints Committee (ICC), and conduct awareness training. Complaints must be handled per legal timelines.
Source: POSH Act PDF – DOE
2) Payment of Wages Policy
Law: Payment of Wages Act, 1936 and Code on Wages, 2019
Requirement: Employers must pay salaries on time (usually by the 7th/10th of the month), maintain wage records, and restrict unauthorised deductions.
Source: Payment of Wages Act PDF
3) Minimum Wages Policy
Law: Minimum Wages Act, 1948 (now under Code on Wages, 2019)
Requirement: Employers must pay at least the minimum wage prescribed by the state government for scheduled employment. Rates vary by state and industry.
Source: Minimum Wages Act (IndiaCode)
4) Gratuity Policy
Law: Payment of Gratuity Act, 1972
Requirement: Companies with ≥10 employees must pay gratuity to employees with 5+ years of continuous service. Payment is due upon resignation, retirement, or termination (with exceptions).
Source: Payment of Gratuity Act PDF
5) Equal Opportunity & Non-Discrimination Policy
Law: Equal Remuneration Act, 1976 + Rights of Persons with Disabilities Act, 2016
Requirement: Equal pay for equal work regardless of gender, no discrimination in hiring, and workplace accessibility for persons with disabilities.
Source: Equal Remuneration Act
6) Shops & Establishments Policy (State-Specific)
Law: State-specific Shops & Establishments Acts (e.g., Maharashtra Shops & Establishments Act, 2017)
Requirement: Register your startup under the state’s act. Rules include work hours, overtime, weekly offs, leave entitlements, and record-keeping.
7) Maternity Benefit Policy
Law: Maternity Benefit Act, 1961 (amended 2017)
Requirement: Female employees are entitled to 26 weeks of paid maternity leave (subject to eligibility). Companies with 50+ employees must provide crèche facilities.
Source: Maternity Benefit Act (Govt PDF)
8) Social Security Policies – EPF & ESI
Law: Employees’ Provident Fund Act, 1952 and Employees’ State Insurance Act, 1948
Requirement:
EPF: Mandatory for establishments with ≥20 employees; employers contribute 12% of wages.
ESI: Mandatory for establishments with ≥10 employees (threshold varies); covers medical benefits for employees earning ≤ ₹21,000/month.
9) Industrial Relations & Grievance Policy
Law: Industrial Disputes Act, 1947
Requirement: Employers must have procedures for grievance redressal, retrenchment, and termination compliance. Larger organisations may need standing orders and conciliation mechanisms.
Source: Industrial Disputes Act PDF
10) Exit & Termination Policy
Law: Governed under Shops & Establishments Act, Industrial Disputes Act, and other employment laws.
Requirement: Employers must define notice periods, reasons for termination, and ensure final settlement of wages, gratuity, and PF dues.
Source: Industrial Disputes Act PDF
For more government policies check the blog
2. Statutory HR Policies (Legally Mandatory in India)
These are required by Indian labour laws. Failing to implement them can result in penalties or legal disputes.
1) Anti-Sexual Harassment (POSH) Policy
Law: Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013
Requirement: Every company with ≥10 employees must have a POSH policy, constitute an Internal Complaints Committee (ICC), and conduct awareness training. Complaints must be handled per legal timelines.
Source: POSH Act PDF – DOE
2) Payment of Wages Policy
Law: Payment of Wages Act, 1936 and Code on Wages, 2019
Requirement: Employers must pay salaries on time (usually by the 7th/10th of the month), maintain wage records, and restrict unauthorised deductions.
Source: Payment of Wages Act PDF
3) Minimum Wages Policy
Law: Minimum Wages Act, 1948 (now under Code on Wages, 2019)
Requirement: Employers must pay at least the minimum wage prescribed by the state government for scheduled employment. Rates vary by state and industry.
Source: Minimum Wages Act (IndiaCode)
4) Gratuity Policy
Law: Payment of Gratuity Act, 1972
Requirement: Companies with ≥10 employees must pay gratuity to employees with 5+ years of continuous service. Payment is due upon resignation, retirement, or termination (with exceptions).
Source: Payment of Gratuity Act PDF
5) Equal Opportunity & Non-Discrimination Policy
Law: Equal Remuneration Act, 1976 + Rights of Persons with Disabilities Act, 2016
Requirement: Equal pay for equal work regardless of gender, no discrimination in hiring, and workplace accessibility for persons with disabilities.
Source: Equal Remuneration Act
6) Shops & Establishments Policy (State-Specific)
Law: State-specific Shops & Establishments Acts (e.g., Maharashtra Shops & Establishments Act, 2017)
Requirement: Register your startup under the state’s act. Rules include work hours, overtime, weekly offs, leave entitlements, and record-keeping.
7) Maternity Benefit Policy
Law: Maternity Benefit Act, 1961 (amended 2017)
Requirement: Female employees are entitled to 26 weeks of paid maternity leave (subject to eligibility). Companies with 50+ employees must provide crèche facilities.
Source: Maternity Benefit Act (Govt PDF)
8) Social Security Policies – EPF & ESI
Law: Employees’ Provident Fund Act, 1952 and Employees’ State Insurance Act, 1948
Requirement:
EPF: Mandatory for establishments with ≥20 employees; employers contribute 12% of wages.
ESI: Mandatory for establishments with ≥10 employees (threshold varies); covers medical benefits for employees earning ≤ ₹21,000/month.
9) Industrial Relations & Grievance Policy
Law: Industrial Disputes Act, 1947
Requirement: Employers must have procedures for grievance redressal, retrenchment, and termination compliance. Larger organisations may need standing orders and conciliation mechanisms.
Source: Industrial Disputes Act PDF
10) Exit & Termination Policy
Law: Governed under Shops & Establishments Act, Industrial Disputes Act, and other employment laws.
Requirement: Employers must define notice periods, reasons for termination, and ensure final settlement of wages, gratuity, and PF dues.
Source: Industrial Disputes Act PDF
For more government policies check the blog
3. Internal HR Policies (Best Practices for Startups)
These are not mandated by law, but adopting them helps startups build a strong culture and employee trust.
Remote Work / Hybrid Work Policy -
Defines eligibility, communication rules, work-from-home allowances, and expectations. Essential for startups hiring talent outside metros.Employee Stock Option Plan (ESOP) Policy
Clarifies vesting, exercise, and exit terms for ESOPs. Helps attract and retain top talent when startups can’t match corporate salaries.Flexible Working Hours Policy
Allows flexibility within defined “core hours.” Improves work-life balance and reduces burnout.Learning & Development (L&D) Policy
Covers reimbursement for certifications, online courses, or internal training programs. Shows employees that the startup invests in their growth.Social Media & Communication Policy
Guidelines for how employees represent the brand online. Protects against reputational risk while encouraging advocacy.Workplace Etiquette & Collaboration Policy
Defines norms for meetings, internal communications (Slack/Teams/email), and conflict resolution. Crucial in remote teams.Employee Referral Policy
Encourages employees to refer talent with incentives. Reduces hiring costs and improves cultural fit.Wellness & Mental Health Policy
Provides access to counselling, mental health days, and wellness programs. Not legally required, but highly valued by employees today.
3. Internal HR Policies (Best Practices for Startups)
These are not mandated by law, but adopting them helps startups build a strong culture and employee trust.
Remote Work / Hybrid Work Policy -
Defines eligibility, communication rules, work-from-home allowances, and expectations. Essential for startups hiring talent outside metros.Employee Stock Option Plan (ESOP) Policy
Clarifies vesting, exercise, and exit terms for ESOPs. Helps attract and retain top talent when startups can’t match corporate salaries.Flexible Working Hours Policy
Allows flexibility within defined “core hours.” Improves work-life balance and reduces burnout.Learning & Development (L&D) Policy
Covers reimbursement for certifications, online courses, or internal training programs. Shows employees that the startup invests in their growth.Social Media & Communication Policy
Guidelines for how employees represent the brand online. Protects against reputational risk while encouraging advocacy.Workplace Etiquette & Collaboration Policy
Defines norms for meetings, internal communications (Slack/Teams/email), and conflict resolution. Crucial in remote teams.Employee Referral Policy
Encourages employees to refer talent with incentives. Reduces hiring costs and improves cultural fit.Wellness & Mental Health Policy
Provides access to counselling, mental health days, and wellness programs. Not legally required, but highly valued by employees today.
3. Internal HR Policies (Best Practices for Startups)
These are not mandated by law, but adopting them helps startups build a strong culture and employee trust.
Remote Work / Hybrid Work Policy -
Defines eligibility, communication rules, work-from-home allowances, and expectations. Essential for startups hiring talent outside metros.Employee Stock Option Plan (ESOP) Policy
Clarifies vesting, exercise, and exit terms for ESOPs. Helps attract and retain top talent when startups can’t match corporate salaries.Flexible Working Hours Policy
Allows flexibility within defined “core hours.” Improves work-life balance and reduces burnout.Learning & Development (L&D) Policy
Covers reimbursement for certifications, online courses, or internal training programs. Shows employees that the startup invests in their growth.Social Media & Communication Policy
Guidelines for how employees represent the brand online. Protects against reputational risk while encouraging advocacy.Workplace Etiquette & Collaboration Policy
Defines norms for meetings, internal communications (Slack/Teams/email), and conflict resolution. Crucial in remote teams.Employee Referral Policy
Encourages employees to refer talent with incentives. Reduces hiring costs and improves cultural fit.Wellness & Mental Health Policy
Provides access to counselling, mental health days, and wellness programs. Not legally required, but highly valued by employees today.
Conclusion
Startups in India need to balance compliance with statutory HR policies and culture-building through internal HR policies. From POSH and wage compliance to ESOPs and mental health initiatives, these policies are the pillars of sustainable growth.
If you’re an early-stage founder, don’t wait for legal trouble or employee turnover to force you into action. Put your policies in place now, and scale with confidence.
Conclusion
Startups in India need to balance compliance with statutory HR policies and culture-building through internal HR policies. From POSH and wage compliance to ESOPs and mental health initiatives, these policies are the pillars of sustainable growth.
If you’re an early-stage founder, don’t wait for legal trouble or employee turnover to force you into action. Put your policies in place now, and scale with confidence.
Conclusion
Startups in India need to balance compliance with statutory HR policies and culture-building through internal HR policies. From POSH and wage compliance to ESOPs and mental health initiatives, these policies are the pillars of sustainable growth.
If you’re an early-stage founder, don’t wait for legal trouble or employee turnover to force you into action. Put your policies in place now, and scale with confidence.
FAQs
FAQs
Are all HR policies legally mandatory for startups in India?
Are all HR policies legally mandatory for startups in India?
Are all HR policies legally mandatory for startups in India?
Are all HR policies legally mandatory for startups in India?
How often should policies be updated?
How often should policies be updated?
How often should policies be updated?
How often should policies be updated?
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