How do I write an employment contract for an employee in India?
Give every employee a written appointment letter or employment agreement, because since the Labour Codes took effect on 21 November 2025 an appointment letter is mandatory for all workers. It should state the role, start date and place of work, the pay and how it is split (allowances may not exceed 50% of total pay, or the excess counts as wages for PF and gratuity), working hours and leave, probation, the notice period on both sides, confidentiality, an assignment of all work and IP to the company, and the grounds for termination. Two Indian points: a non-compete after the person leaves is generally unenforceable, so use non-solicitation and confidentiality instead, and a fixed-term employee now gets the same benefits as a permanent one, with gratuity after one year. Startup India hosts a basic hiring contract and a confidentiality and IP assignment template to start from; have a lawyer check the final version against your state's rules.
The Ministry of Labour's 21 November 2025 release bringing the four Labour Codes into force, with the before-and-after table: mandatory appointment letters for all workers, and gratuity for fixed-term employees after one year.
An employer's guide, from an Indian payroll company, to the four Labour Codes that took effect on 21 November 2025 and replaced 29 older laws, covering the new wage definition, fixed-term gratuity, appointment letters and gig-worker social security.
This is the legal spine for doing it cleanly under Indian rules. It spells out why parting during probation is the cleanest exit (lighter notice, no retrenchment machinery), the full-and-final settlement clock (exit wages due within 2 working days of the last day under the Code on Wages), and exactly what to document: termination letter, settlement statement, payment records, and the employee's acknowledgment. It also flags state-by-state notice differences (Maharashtra, Karnataka, Delhi), so a Bengaluru fire follows different paper than a Mumbai one.
From
India Briefingby Dezan Shira & Associates15 min read
Firing during probation is materially cleaner than firing a confirmed employee, so move inside the 60-to-90-day window if you can
Full-and-final settlement (salary, leave encashment, statutory dues) is legally due within 2 working days of the last day, so pay fast and issue the relieving letter
Keep the paper trail: termination letter, settlement statement, payment proof, and a signed acknowledgment protect you if it is ever disputed
This is the plain-English India explainer that maps exactly to your problem: it walks through Section 17(c) (employees vest in the employer, freelancers do not) and Sections 18-19 (a valid assignment must be written, signed, and specify rights, duration, and territory), then spells out that without it a freelancer gives you only an implied license. Written by a working Indian IP firm, it closes with the investment angle, ambiguous ownership chains delaying diligence and cutting valuation, which is the exact reason to fix this before your round.
From
Khurana & Khuranaby Khurana & Khurana, Advocates and IP Attorneys10 min read
Under Section 17(c) employee works vest in the employer by default, but freelancers and contractors retain copyright unless a written assignment says otherwise, and payment alone does not transfer it
A valid assignment under Sections 18-19 must be in writing, signed by the freelancer, and specify the rights, duration, and geographical scope, else you hold only an implied license
Moral rights (Section 57) stay with the author even after economic rights transfer, and a clean copyright chain is what due diligence, mergers, and acquisitions scrutinize
A short employer-employee agreement template from the Startup India templates library, to adapt as a starting point and have checked against the Labour Codes.
This is a ready-to-fill IP assignment and confidentiality agreement hosted on the government's own Startup India portal, so it is drafted for Indian law and free to use. It gives a non-lawyer the actual assignment and confidentiality language to adapt for a developer and get signed. Treat it as a starting point: it is written employer to employee, so swap the party labels for a contractor engagement and, ideally, have a lawyer glance at the final version.
