Legal Guide

Everything You Need to Know About Contract Employees in India

by Bhavya Choudhary · 3 min read

contract employees in india

The majority of companies have at least a few different types of employees, such as those that work full-time, part-time, or on a contractual basis. When it comes to taxes, paperwork, fair treatment, and other aspects of the working relationship both the employee and the employer might have an idea of what to anticipate based on the employment contract

In this blog, we will learn about the definition, characteristics, and rights of a contract employee in India.

Who are contract employees in India?

  • Contract employees in India, also known as “independent contractors,” “contract workers,” “freelancers,” or “work-for-hire staffers,” are hired or “contracted” for a particular project or timeframe for a set fee. 
  • Other names for contract employees include: “contract workers” or “freelancers. Contract workers are often chosen for their skill in a certain field, such as writing or artwork, while the position is being filled. 
  • Contractual workers and contract employees in India are different terms for the same kind of laborers who are not regarded to be regular employees of a firm or business. 
  • A worker like this may be recruited on a temporary or part-time basis, often for the purpose of completing a particular assignment or project.
  • A Contract employee in India is often employed for a specific project for a certain period of time at a predetermined compensation rate. 
  • They may be paid on a weekly, biweekly, or monthly basis, or they could get payment after the job is finished.

What are some of the characteristics of a contract employee in India? 

  • Contractual workers and contract employees in India have a far wider degree of influence over their job. 
  • They may do a part or all of the job off of the company premises. 
  • Independent contractors may also manage the speed at which they work, but they must normally complete by a set date. 
  • Additionally, independent contract employees in India will generally have control over the intricacies related to how the task is completed, as well as sourcing essential resources.
  • It is inappropriate for contractual workers and contract employees in India to engage in activities (without taking legal advice) that go beyond the terms of their agreement with the business that has employed them, such as entering into a contract with a third party or otherwise establishing any kind of responsibilities for the firm.

What Are the Rights of a Contract Employee in India? 

  • Employment Agreement

As far as rights of a contract employee in India is concerned, it is a common practice these days to engage in an employment contract that outlines the conditions of employment, including remuneration, location of work, designation, work hours, and so on. 

These terms are often outlined in great detail. Both the employer and the employee have their rights and responsibilities laid forth in a clear and concise manner. 

  • Protection against unfair treatment at the workplace

Every individual who calls India home has the legal right to live free from discrimination. In accordance with the Constitution of India, no citizen may be subjected to discrimination or be deemed ineligible for any employment, either permanent or a contract employee in India, solely on the basis of their religion, race, caste, sex, descent, place of birth or residence, or any combination of these factors. 

  • Benefits for Expectant Mothers

Prenatal and postnatal care are both covered under the Maternity Benefit Act, which makes these services available to females even if she is a contract employees. 

Following the revisions that took place in 2016, the amount of time that a pregnant female employee is entitled to receive paid leave has been expanded to a total of 26 weeks, which also includes eight weeks of postnatal paid leave.

There is no such thing as paid paternity leave for males in India. Both unpaid paternity leaves, and paid leave for parents caring for children are benefits offered by the Central Government. On the other hand, in the case of contract employees in India, the right to do so lies solely with the employer.

  • Fair Salary & Bonus for workers

The provision of fair and suitable compensation to an employee is the raison d’être of the employment relationship. Equal compensation for equal labor is mandated by the Constitution whether you are a permanent or a contractual employee in India.

  • Work Schedules That Take into Account Overtime Pay

Every contractual employee in India has the right to demand that their employer provide a clean, well-kept environment, together with the most fundamental conveniences.

The Factories Act and the Shop and Establishment Acts (which vary from state to state) both safeguard the rights of employees as well as those who are not employed by a factory.

  • The Legal Right to Leave

A contract employee in India is entitled to paid time off in the form of leaves, including vacation time, time off due to illness or privilege time, as well as other types of leaves.

 A contract employee in India earns one additional day of paid vacation for every 24 days worked in their position. If the employment agreement does not prohibit the employee from doing so, the employee is allowed to take leave for urgent matters during the notice period.

  • Protection of employees against unwanted sexual advances in the workplace

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act provides legal protection against sexual harassment for all women who are employed in settings where it may occur, whether she is a permanent or a contract employee in India. 

You can also consult a professional lawyer and take legal advice for the same. In addition, the Indian Penal Code stipulates that sexual harassment may result in a sentence of up to three years in jail, in addition to or instead of a fine.


In India, the words contractual worker and contract employee refer to the same category of non-regular employees of a company or organization. A Contractual employee in India has the right to have their employer respect all contract provisions. 

If a corporation discriminates against a contract employee, the employee has the right to make a formal complaint. An employment lawyer who is both experienced and local to your region will be in the best position to comprehend the specific regulations governing contract labor in your state and to give you situation-specific guidance.

In case of any unfair treatment by the employers, the Contractual-based employees must take legal consultation.

Bhavya Choudhary

Written by

Bhavya Choudhary

Get Expert Legal Advice For

Legal Consultation

Related Articles

Hi there 👋!

How can I help you?