The HR Policy Starter Kit Every Surat IT Company Needs in 2026

Most Surat IT companies operate without a formal HR policy until something goes wrong — an employee dispute, a compliance notice, or the realization during a client due diligence that there is no documented leave policy. The absence of HR documentation does not just create legal risk. It creates ambiguity that compounds over time: differing interpretations of leave rules, inconsistent appraisal standards, and a culture where policy is whatever the most senior person in the room decides it is.

This guide is the minimum viable HR framework for growing IT companies. It covers the specific policies you need to document, the Indian laws you need to comply with by name, and the implementation steps to get from verbal norms to written, acknowledged policy in 30 days or less.

Why Most IT Companies Have No HR Policy

The absence of formal HR policy in early-stage IT companies is not negligence — it is a symptom of how these companies grow. A founder starts with 5 people, all of whom are trusted. Leave is taken informally. Appraisals happen in conversation. Conflicts are resolved directly. The system works because the organization is small enough that everyone can hold the rules in their heads.

Then the company grows to 20, 30, 50 people. The founder cannot be in every conversation. New employees arrive without the founder's implicit understanding of how things work. The informal norms that governed a 10-person team become unenforced assumptions in a 40-person company. The first time a dispute arises — a leave denial that someone considers unfair, a termination without a clear notice period, a performance issue without documented criteria — the absence of written policy becomes a serious problem.

The three triggers that force HR policy creation in most Surat IT companies:

• A client (especially a US or EU enterprise client) asks for an HR policy document during vendor due diligence
• A compliance notice from the Labour Department or a complaint under the POSH Act
• A termination dispute where the lack of a documented notice period or performance improvement process creates legal exposure

The goal of this guide is to help you create the policy before any of these three triggers arrive. The cost of creating a policy from scratch under legal pressure is 10x higher than creating it proactively.

Leave Policy Essentials (per Indian Law)

Your leave policy must cover five categories of leave to be compliant with Indian labour law and competitive with Surat IT market standards. Document each category explicitly — verbal policies do not protect you in a dispute.

• Earned Leave (EL) / Privilege Leave (PL) — Under the Shops and Establishments Act (Gujarat), employees are entitled to one day of earned leave for every 20 days worked (approximately 15 days per year for full-year employees). Market standard in Surat IT companies is 18–24 days per year to remain competitive with Bangalore and remote-first employers. Specify: accrual rate, maximum carry-forward (typically 30–45 days), encashment rules on resignation or year-end, and the minimum notice period for planned leave.
• Sick Leave (SL) — Typically 7–12 days per year in Surat IT. Specify whether a medical certificate is required (standard practice: required for sick leave of 3+ consecutive days) and whether sick leave can be combined with earned leave.
• Casual Leave (CL) — Typically 6–8 days per year for unplanned, short absences. Specify the maximum consecutive days allowed as casual leave (usually 3 days) and the notice requirement.
• Maternity Leave — Under the Maternity Benefit (Amendment) Act, 2017, female employees who have worked for 80+ days in the preceding 12 months are entitled to 26 weeks of paid maternity leave for the first two children. For the third child, the entitlement is 12 weeks. Non-compliance carries criminal penalties — fines and imprisonment for the employer. Creche facility is mandatory for companies with 50+ employees.
• Paternity Leave — Not mandated under central law for private sector, but market standard in Surat IT is 5–10 days. Document it clearly — ambiguity creates resentment when it is denied informally.

Additionally, document your public holiday schedule (national holidays + Gujarati regional holidays such as Navratri, Diwali, Uttarayan, and Bestu Varas) and whether the company observes optional holidays from which employees can choose.

POSH Compliance: Mandatory at 10+ Employees

The Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013 (commonly called the POSH Act) is mandatory for every company with 10 or more employees — including IT companies. Non-compliance carries fines of up to ₹50,000 for a first offence, and repeat non-compliance can result in licence cancellation.

What POSH compliance requires:

• Internal Complaints Committee (ICC) — You must constitute an ICC with a minimum of four members. The presiding officer must be a senior woman employee. At least one member must be from an NGO or association committed to women's causes. The ICC must be reconstituted every three years.
• Written POSH Policy — A written policy that defines what constitutes sexual harassment (physical, verbal, and digital), the complaint process, the investigation process, and the consequences for confirmed harassment. This policy must be distributed to all employees and displayed in the workplace.
• Annual Report — The ICC must prepare an annual report and submit it to the District Officer (under the Labour Department) covering the number of complaints received, disposed of, pending, and the number of workshops or awareness programmes conducted.
• Mandatory Training — Annual awareness workshops for all employees and specific training for ICC members on conducting fair investigations.

Several SIC member companies have been caught off-guard by POSH requirements when applying for government contracts or enterprise client onboarding — both of which now routinely verify POSH compliance. The ICC formation and policy drafting can be completed in a week with the help of a labour law consultant. Do not defer this.

WFH, Moonlighting and Conflict of Interest Clauses

Three policy areas that most Surat IT companies handle informally but that create significant disputes when left undocumented:

Work From Home Policy — Post-2020, WFH expectations are a standard part of any job conversation. Your policy must specify:

• Who is eligible: role-based (developers yes, operations staff yes, receptionist no) or seniority-based
• Default WFH allowance: fixed days per week, flexible based on manager approval, or fully remote for certain roles
• Equipment responsibility: who provides the laptop, what happens if it is damaged or stolen at home
• Availability requirements: core hours during which the employee must be reachable (e.g., 10 AM to 6 PM IST)
• Data security requirements: VPN usage, prohibition on storing company data on personal cloud drives, screen-sharing permissions for client calls

Moonlighting and Secondary Employment Policy — The moonlighting debate became a national conversation in 2022–23 when Wipro terminated 300 employees for working with competitors. Your policy needs to take a clear position:

• Option A (prohibit): No secondary employment during the period of employment. Violation is grounds for termination. Employees must disclose any pre-existing secondary work and get written approval.
• Option B (permit with restrictions): Secondary employment is permitted provided it does not involve competing work, does not use company resources or client relationships, does not affect primary job performance, and is disclosed to HR in writing.

Whichever position you take, document it in the employment contract and get employee sign-off at onboarding. Ambiguity here creates both legal exposure and cultural conflict.

Conflict of Interest Policy — Separate from moonlighting, a conflict of interest clause addresses situations where an employee has a financial, personal, or professional interest that could compromise their judgment on behalf of the company. Include: prohibition on ownership interests in competitors or clients without disclosure, prohibition on accepting gifts above a defined value (₹2,000 is common) from vendors or clients, and requirement to recuse from decisions where a personal interest exists.

Performance Appraisal and Offboarding

Performance Appraisal Framework — The biggest HR complaint in Surat IT companies is "we never know how we are being evaluated." The solution is not a sophisticated OKR system — it is documented criteria. Your appraisal policy must specify:

• Appraisal cycle: quarterly check-ins with an annual formal appraisal is the most common and effective structure in Surat IT companies of 15–100 people
• Rating framework: what does "meets expectations," "exceeds expectations," and "does not meet expectations" actually mean, in behavioral terms specific to each role level
• Who conducts the appraisal: direct manager only, or 360-degree input from peers and cross-functional stakeholders
• How appraisals connect to salary revisions: is the appraisal directly linked to a fixed increment percentage, or is it a qualitative input to a separate compensation decision?
• Timeline for communication: employees should know their appraisal outcome and salary revision within 2 weeks of the appraisal cycle closing — not 2 months

Offboarding Process — Offboarding is one of the most neglected areas in Surat IT HR policy, and one of the most legally risky. A poorly handled offboarding creates data security exposure, prevents clients from getting continuity, and damages your employer brand with the alumni who will become your future referral sources or future clients.

• Notice period: specify clearly (typically 30–90 days for senior roles). Document what happens if notice is not served — whether the company requires notice period payment or buyout
• Knowledge transfer: document the specific handover responsibilities: code documentation, project status, client communication handoff, and system access credentials
• Access revocation checklist: email, Slack, GitHub, AWS/GCP, project management tools, CRM, client portals — all must be revoked on the last working day, not "when we remember"
• Full and final settlement: under the Payment of Wages Act, 1936, final settlement must be paid within 2 working days of the last day of employment. This includes pending salary, earned leave encashment, any reimbursements, and performance bonuses that have accrued. Delay creates legal liability.
• Exit interview: structured exit interviews capture institutional knowledge about why people leave. Run them consistently and report the aggregated findings to founders quarterly — it is the most honest feedback on your company culture you will ever receive.

The Implementation Checklist

The most common failure mode in HR policy creation is writing the document and never actually implementing it. Here is the 30-day implementation checklist:

1. Week 1 — Draft: Use an HR policy template as a starting point (several are available through NASSCOM and SHRM India). Customize for your company size, work model (WFH/hybrid/in-office), and specific role types. If you have a CA or HR consultant with labour law experience, have them review the draft.
2. Week 2 — Review and finalize: Share the draft with 2–3 senior team members for practical feedback. Does the leave policy match what has been practiced informally? Does the appraisal framework reflect how evaluations actually happen? Align policy with reality — not the other way around — then document where you want to change practice over time.
3. Week 3 — Communicate: Hold an all-hands (or send a written communication for distributed teams) introducing the policy. Explain why it is being formalized, what is changing versus what was already the informal norm, and what the process is for questions or disputes.
4. Week 4 — Sign-off and accessibility: Get written acknowledgment from all current employees that they have read and understood the policy. Add it to your onboarding checklist for all new hires. Store it in a central, accessible location — Notion, Google Drive, your HRMS platform, or your company intranet. Do not store it only on the founder's laptop.

Ongoing: Review and update the policy annually, before the new financial year. Changes to central or state labour law (maternity benefit updates, minimum wage revisions, new digital privacy requirements) should trigger a policy review. The policy you write in 2026 will need updates in 2027 — build the annual review habit from day one.

The cost of building this HR policy framework is low — 30–40 hours of effort, plus a ₹15,000–25,000 one-time engagement with a labour law consultant if you want professional review. The protection it provides — legally, culturally, and in client due diligence — is real and compounding. Build it now, before you need it.