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AI Contract Generator

Hiring employees in India means navigating employment laws that vary by state, each with its own notice period rules, leave entitlements, and compliance requirements. Drafting a compliant employment contract from scratch requires deep knowledge of Indian labor law — or an expensive local legal team.

The AI Contract Generator handles this for you. Enter your employee's details, and it produces a fully compliant Indian employment contract in seconds, complete with state-specific clauses and plain-English explanations of every section. You get a contract that protects both parties and meets Indian legal standards, without needing to become an expert in Indian employment law.

How It Works​

Step 1: Navigate to the Contract Generator​

From the main menu, go to the EOR section and click "Contract Generator" in the sidebar. You can also access it from the EOR Dashboard when onboarding a new employee.

Step 2: Enter Employee Details​

Fill in the basic information about the employee:

  • Full legal name as it appears on their identity documents.
  • Role / job title for the position they are being hired into.
  • Department the employee will belong to.
  • Start date for the employment.

Step 3: Enter Compensation Details​

Specify the employee's annual CTC (Cost to Company). You can enter the amount in USD or INR — the system will convert automatically. The contract will reference the CTC along with the full salary breakdown.

If you have already used the CTC Optimizer to structure the salary, the contract generator will pull in that structure automatically.

Step 4: Select the Indian State​

Choose the state where the employee will be working. This is important because Indian employment law is not uniform across the country. Different states have different rules for:

  • Notice periods — some states mandate minimum notice periods that override whatever you put in the contract.
  • Leave entitlements — earned leave, sick leave, and casual leave quotas vary by state.
  • Professional Tax — not all states levy it, and rates differ where it applies.
  • Shops and Establishments Act — state-specific rules governing working hours, overtime, and holidays.

The contract generator automatically includes the correct clauses for the selected state.

Step 5: Review and Generate​

Click "Generate Contract". The system produces a complete employment contract within seconds.

What the Contract Includes​

Every generated contract covers the following sections, tailored to the specific employee and state.

Employment Terms​

The core terms of the employment relationship:

SectionWhat It Covers
Position and DutiesJob title, reporting structure, and scope of responsibilities.
Employment TypeFull-time employment through Omnivoo as the Employer of Record.
Probation PeriodDuration and terms of the probationary period, including early termination provisions.
Working HoursStandard hours, overtime rules, and any state-specific restrictions.
Place of WorkOffice location or remote work arrangement, with the state of employment clearly stated.

CTC and Salary Schedule​

A complete breakdown of the employee's compensation:

ComponentDescription
Basic SalaryThe base salary from which statutory contributions are calculated.
HRAHouse Rent Allowance, set based on whether the employee is in a metro or non-metro city.
Special AllowanceFlexible component that makes up the remainder of the package.
Employer PFThe employer's Provident Fund contribution.
GratuityProvisioned amount for gratuity, payable after 5 years of service.
Total CTCThe all-in annual cost, with monthly breakdown.

Notice Period​

The required notice period for both the employer and the employee to terminate the relationship. The generator checks the applicable state law and ensures the notice period in the contract meets or exceeds the statutory minimum.

Intellectual Property Assignment​

A clause assigning all work product, inventions, and intellectual property created during employment to your company. This section is drafted to be enforceable under Indian law, which has different IP assignment requirements than the US.

POSH Policy (Prevention of Sexual Harassment)​

Indian law requires every employer to have a POSH policy and communicate it to employees as part of the employment agreement. The contract includes a reference to the policy and the employee's acknowledgment. This is a legal requirement under the Sexual Harassment of Women at Workplace Act, 2013, and applies to all employers regardless of size.

Gratuity​

A clause explaining the employee's entitlement to gratuity under the Payment of Gratuity Act, 1972. Gratuity is a mandatory lump-sum payment to employees who complete five or more continuous years of service. The clause explains how it is calculated and when it is paid.

Confidentiality and Non-Disclosure​

Standard confidentiality obligations covering proprietary information, trade secrets, and business data. Drafted to be enforceable under Indian contract law, which takes a different view of non-compete clauses than US law (post-employment non-competes are generally unenforceable in India).

Termination​

Grounds for termination, the process for both voluntary resignation and employer-initiated termination, and any severance obligations. This section accounts for state-specific requirements around termination procedures.

Clause Explanations​

Every clause in the generated contract includes a plain-English explanation in a sidebar or tooltip. These explanations are written for US employers who may not be familiar with Indian employment law.

For example:

  • "Gratuity Provision" — "This is a mandatory benefit in India. You set aside 4.81% of the employee's Basic salary each month. If the employee stays for 5 or more years, they receive a lump-sum payment when they leave. Think of it as a legally required retention bonus."

  • "Professional Tax Deduction" — "This is a small state-level tax on employment, similar to a state income tax but capped at a very low amount (around $30/year). Not all states charge it. The employee's state determines whether it applies and how much."

These explanations help you understand what you are agreeing to without needing to consult a lawyer for every clause.

Why State-Specific Clauses Matter​

India does not have a single, uniform employment law. Employment is governed by a combination of central (federal) laws and state-specific legislation. Two employees working in different states for the same company can have different legal entitlements.

Here are some examples of how state laws affect employment contracts:

AreaHow It Varies
Notice PeriodKarnataka requires a minimum of 30 days. Some other states allow shorter periods.
Leave EntitlementsEarned leave ranges from 12 to 18 days per year depending on the state.
Professional TaxMaharashtra charges up to Rs 2,500/year. Rajasthan does not charge Professional Tax at all.
Working HoursMost states follow a 48-hour work week, but specific rules on overtime and breaks differ.
Gratuity EligibilityThe central rule is 5 years, but some states have specific provisions for certain industries.

The contract generator handles all of these variations automatically. You select the state, and the correct clauses are included.

Frequently Asked Questions​

Can I customize the generated contract?​

Yes. The generated contract is a starting point. You can edit any section before sending it to the employee. However, be cautious about modifying clauses that reference statutory requirements — the generator includes them because they are legally required.

Is the contract legally binding in India?​

The contract is drafted to be compliant with Indian employment law and enforceable in Indian courts. Omnivoo, as your Employer of Record, is the legal employer on the contract. Your company is referenced as the client directing the employee's work.

What language is the contract in?​

All contracts are generated in English. Indian employment contracts are commonly executed in English, and English-language contracts are legally valid across all Indian states.

What if the employee moves to a different state?​

If an employee relocates to a different state during their employment, the contract should be updated to reflect the new state's requirements. You can generate a revised contract or amendment through the contract generator.

How is this different from a US employment agreement?​

Several key differences:

  • Indian contracts must reference specific statutory benefits (PF, gratuity, ESI) that have no US equivalent.
  • Post-employment non-compete clauses are generally unenforceable in India.
  • Notice periods are often longer than US norms (30-90 days is standard in India vs. at-will in most US states).
  • The POSH policy acknowledgment is a legal requirement with no direct US equivalent.
  • Termination procedures are more regulated than in at-will US employment.

What's Next?​