written by Khatabook | December 21, 2021

Must-Have HR Policies By All Companies

Human Resource policies are the structure and principles that an organisation uses to manage its staff. They ensure that the firm complies with local government regulations. This is accomplished through developing processes to satisfy the ever-changing needs of the government. 

HR policies are the rules and procedures that regulate one’s working relationship with their co-workers. When it comes to working together, HR rules define the rights, obligations, and anticipated behaviours of individuals and their co-workers. HR policies are frequently created and maintained by an organisation's human resources staff (or individuals in charge of HR functions). Most HR regulations apply to all workers in a business, whether temporary, permanent, full-time or part-time workers.

Need for Good HR policies

 HR policies in India are concerned with striking a balance between protecting employees and the company's interests and goals. Even foreign enterprises must compromise between their own best practices and local regulations in India while implementing human resource (HR) policies. As a foundation for their HR practices in the nation, foreign enterprises should strive to grasp the laws and regulations governing HR administration. This is especially significant in India, where state, federal, and industry-specific boundaries govern labour rules.

Another factor is the age of modern workplaces that are heavily influenced by shifting times and trends. Employee manuals that only address a few of the most important concerns in the workplace should no longer be used in modern companies. HR rules should reflect the developments in the workplace, which are continually evolving and updating. The following are some of the reasons why it's critical to maintain current, ethical, and successful HR policies: 

  •  Employee complaints, difficulties, and grievances are addressed by the company’s HR policies, which define how to resolve them effectively.
  • HR rules guarantee that every company employee is cared for, that their requirements are met, and that appropriate benefits are provided for their job.
  • They assist employees in obtaining appropriate and equitable pay.
  • They assist in the training and development of personnel who are aligned with the company's needs.
  • They assist in maintaining workplace discipline, 
  • Protecting people from the consequences of their co-workers’ poor behaviour and even the business itself, and 
  • Providing paid vacations and holidays to qualifying employees. 

Types of HR policies

 In India, there are primarily two types of HR policies of a company: general and specific policies. 

1. Specific HR policies

HR rules that are customised to a single organisation's difficulties or concerns are known as specialised policies. The HR department tailors them to the unique needs of the company. These policies include topics such as employee salary, recruiting, benefits, etc.

2. General HR policies

General policies are the kind of policies that are required and present in any organisation. The company's leaders generally formulate them.

Some sample HR policies from the above distinctions are:

  • Code of Conduct
  • Employee Wages
  • Employee Provident Fund

New HR policies designed to comply with a modern workplace are:

  • Work from home policy
  • Maternity and paternity policy
  • Sexual harassment at workplace policy

Also Read: What Is a Flexible Benefit Plan?

Crucial HR Policies that Companies Should Implement

1. Employee Wages

 One of the most important parts of personnel management is payroll. The HR department's job is to handle the company's employee payroll efficiently. Offering competitive compensation to employees and adhering to government rules are all part of this policy.

 Employee pay is covered by government acts like the Minimum Wage Act of 1948. This statute establishes a certain wage as the minimum wage for both skilled and unskilled workers. Employees must earn the 'Basic' income to cover their living needs, according to the statute.

Furthermore, according to the Payment of Wages Act of 1936, an employee is entitled to receive their monthly salary on the agreed-upon date, free of any unauthorised deductions. As a result, businesses must adhere to the regulations to remain compliant while being competitive. This is one of the most important aspects of India's HR policies.  

2. Flexible Work Culture Policy

 Various firms' work cultures have shifted dramatically since 2019-20. Many of them have been compelled to ask their workers to work from home due to the pandemic. As a result, a flexible workplace culture policy of HR is required to provide employees greater freedom in choosing their work location or workplace. 

The strategy for an adaptable work culture should include adequate rules and frameworks for managing workers who work remotely or from home. Employees will be able to follow a framework or set of guidelines when working from multiple places due to this.

3. Contract for an Employee

Local employees in India are not required to sign a formal employment contract. On the other hand, contracts are a good way for businesses to restrict risk and specify employment terms and conditions. The employment rules in India are diverse and complicated, requiring companies to tread carefully while drafting contracts. Apart from labour regulations, India's employment circumstances are governed by industrial legislation, the Companies Act, and the Contract Act of 1872.

Employment regulations are created and enforced by both the state and federal governments, making compliance difficult for people unfamiliar with the nation. To avoid future legal issues, HR managers should keep themselves up to date and establish employee contracts in compliance with this.

However, not all occupations and people are well-suited for remote work, so it's critical to understand your company's HR policy on the subject. The following are some of the issues that should be addressed in a remote worker policy:

  • Are there any restrictions on working from home?
  • Who is eligible to work from home?
  • How will you keep track of your remote workers?

Your policy for remote employees should adhere to any applicable regional regulations, have a particular time and pay policy for remote workers, and state that you have the right to terminate your capacity to work remotely at any time.

4. Employment Termination

 Some employees may want to further their careers at some time. You may also believe that an employee no longer fits within the organisation's overall plan. As a result, the employer must guarantee an appropriate HR policy of leaves, laying out the requirements for an employee who wants to leave the organisation. This will assist the HR staff in following the necessary processes for terminating an employent or processing a resignation request following labour rules. 

5. Code of Conduct

 A company's code of conduct rules incorporates the organisation's vision, ethics, and mission and is designed to promote and maintain a positive working environment for workers. It comprises the company's work regulations, which all workers must follow. Equal rights policies, technology usage policies, clothing codes, enabling work environments, media policies, conflict of interest policies, and other policies are included in India's code of conduct policy. A method for reporting a breach of the code of conduct must also be included in the code of conduct.

Employees must be ready to work by following the HR policy for employees. It includes office arrival timing, lunch breaks, and any extra rules or limits pertaining to them if there is a clear policy in place. Regional regulations may specify breastfeeding breaks, rest intervals, and meal periods, so make sure your practices are in line with them. 

6. Leave Policy

 Every firm should have a decent leave policy to provide employees with a clear picture of how many days of vacation they are entitled to each year. For example, a correct division of leaves in HR policies should include paid leaves, sick, or casual leaves. It is also necessary to note public holidays in the list of leaves.

 In India 2020, an HR policy should include provisions for unpaid leave and explicit guidelines for wage reductions for late arrivals and half days. Employees are entitled to paid holidays per week, as well as compensation for any extra labour performed outside of normal working hours, under the Factories Act of 1948.  

7. Maternity and Paternity Policy

According to The Maternity Benefits (Amendment) Act, 2017, any firm with more than ten workers is obligated by law to give maternity leave benefits to female employees. Benefits are available to any woman who has worked for the firm for at least 80 days. A pregnant working woman is entitled to a minimum of 26 weeks of paid leave for the first two children and a further 12 weeks of unpaid leave, according to the statute.

 There is currently no law governing paternity expenses for private-sector employees. Employees in the federal government are entitled to 15 days of paternity leave to care for their wives and children. A draught paternity benefits law was introduced in 2017, but it is still awaiting government approval. Therefore, HR policies pertaining to this aspect is crucial. 

8. Sexual Harassment Workplace Policy

The Indian government has prioritised the protection of women in the workplace while enacting legislation. All firms with more than 10 workers must establish an Internal Complaints Committee in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013. All concerns should be aggressively pursued, documented, and resolved as soon as possible.

 Companies must establish proper HR policies and ensure that they are effectively conveyed to all employees to ensure employee safety. To establish an organisational culture that provides a fair and safe working environment for all workers, HR officials should arrange workshops or sensitisation programs and encourage communication. 

9. Holidays and Time-Off Policy

 Every firm should have a decent leave HR policy to provide employees a clear picture of how many days of vacation they are entitled to each year. A correct division of the leaves into paid leaves, ill leaves, or casual leaves, for example, should be included in the policy. It is also necessary to note public holidays. 

Three national holidays are observed in India: Republic Day (January 26), Independence Day (August 15), and Gandhi Jayanti (October 2nd). On these certain days, all public and private institutions must stay closed. Any group that wants to operate these days needs government clearance. Only specific businesses, such as factories and industries where the work process is deemed continuous, such as hospitals and travel agencies, are permitted to operate 24 hours a day, 365 days a year. However, businesses that operate on certain days are required to provide extra salaries to employees who work on such days.

10. Employee Provident Fund (EPF) and Gratuity

Every employer is responsible for establishing a provident fund account for each of their employees. The Employees Provident Fund Act of 1947 ensures employees' economic stability once they retire. This acts as a safety net for employees, providing housing, medical insurance, and a retirement pension, among other things.

It's worth noting that businesses with more than ten employees are required to give provident fund benefits to their workers. As a result, if you have more than ten workers, you must have a provident fund program in place for them.


 A company HR policy uses the gratuity policy to show their appreciation for their employees' services to the firm. The gratuity policy applies to all workers who have worked for the company for more than 5 years in a row.

Employees who are being laid off or quitting but have worked for the firm for 5 years or more are entitled to a one-time payment called a gratuity payout. This is critical for retaining happy and engaged personnel. Furthermore, firms are required by law to pay gratuity to their employees under the Payment of Gratuity Act, 1972. 

Also Read: 8 Best Thank You Email Samples for Coworkers and Employees


 Strong HR policies in place make a concrete foundation for any company. They establish and ensure various laws and regulations within an organisation. A robust set of HR rules may ease an employer’s burden by methodically defining performance and growth targets and sculpting a pattern of disciplinary actions and operational standards to keep individuals on track to success.


Q: Which company HR Policy came into effect in compliance with Prevention, Prohibition, and Redressal) Act, 2013?


 It was the Sexual Harassment of Women at workplace policyThe Indian government has prioritised the protection of women in the workplace while enacting legislation. All firms with more than 10 workers must establish an Internal Complaints Committee in line with the Sexual Harassment of Women at Workplace

Q: What question should an organisation ask while determining remote workplace policies and their qualifying factors?


The following are some of the issues that should be addressed in a remote worker policy:

  • Are there any restrictions on working from home?
  • Who is eligible to work from home?
  • How will you keep track of your remote workers?

Q: What are the two types of HR policies?


The two types of HR policies: Specific and General Policies

Specific- These HR policies include topics such as employee salary, recruiting, benefits, and so on

General- These are the kind of policies that are required and present in every organisation.

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