Last Updated on October 29, 2026 by Abhijit Divekar
Short answer: A 10-person startup in India needs a written POSH policy and Internal Committee, appointment letters for every employee, and clear leave, working hours, pay, probation and exit rules that match your state’s Shops and Establishments Act. Add a code of conduct, a grievance policy, a data and IT policy, and a remote work policy if you allow it. At 10 people, ESIC, gratuity and maternity benefit rules also apply, so your policies should reflect them.
What are HR policies for a startup?
HR policies are short written rules that tell employees how the company handles hiring, pay, leave, behaviour, safety and exits. For a startup they do two jobs: they meet legal requirements that apply at your headcount, and they prevent disputes by putting expectations in writing before a problem arises. A 10-person company does not need a 60-page handbook. It needs 10 to 14 one-page policies that employees read, sign and can find later. Ten employees is also a legal threshold in India, because several rules switch on at that size, so this is the right moment to write them down.
Which HR policies does a 10-person startup legally need?
The table separates what the law requires from what is good practice. Start with the “required” rows.
| Policy | Required by law? | Why it matters at 10 people |
|---|---|---|
| POSH policy and Internal Committee | Yes, at 10 or more employees | The Internal Committee is mandatory once you have 10 employees |
| Appointment letter | Yes, for every employee | Required under the OSH Code; sets role, pay and terms in writing |
| Leave and holidays | Minimums set by your state’s Shops and Establishments Act | Your policy can be more generous, but not less than the state minimum |
| Working hours and overtime | Limits set by law | Avoids overtime disputes, especially for support and operations roles |
| Pay, payslips and salary structure | Rules set by the Code on Wages | Wages must be at least half of total pay |
| Maternity benefit | Yes, at 10 or more employees in shops and establishments | Explains leave and pay so there is no confusion later |
| Gratuity | Yes, at 10 or more employees in shops and establishments | Explains eligibility, including fixed-term staff |
| Health and safety | Employer duties under the OSH Code | Covers a safe workplace, first aid and reporting incidents |
| Probation and confirmation | Good practice | Sets the probation length, review and what confirmation means |
| Code of conduct | Good practice | Sets expectations on behaviour, conflicts of interest and discipline |
| Grievance redressal | Good practice | Gives employees a clear, safe way to raise problems |
| Data, IT and confidentiality | Good practice; the DPDP Act covers personal data you hold | Covers laptops, passwords, client data and employee data |
| Remote and hybrid work | Good practice | Who can work from home, availability and equipment |
| Notice period and exit | Good practice, with legal parts (final pay, gratuity) | Notice, handover, full and final settlement and relieving letters |
How do small businesses in India set up their HR policies?
Small businesses in India usually set up HR policies in six steps. First, list the rules that apply at your headcount, starting with POSH and appointment letters at 10 employees. Second, check your state’s Shops and Establishments Act for minimum leave, holidays and working hours. Third, write one-page drafts for the required policies, then the good-practice ones. Fourth, have them reviewed by an HR or legal adviser. Fifth, share them with every employee and collect a signed acknowledgement. Sixth, review them once a year and whenever the law changes. Using a ready template pack speeds up steps three and four.
What should each policy include?
Keep each policy to one or two pages. A short policy people read beats a long one nobody opens.
- POSH: what counts as harassment, how to complain, who sits on the Internal Committee, and timelines. See our POSH setup guide for small companies.
- Leave: types of leave, how much, how to apply, carry-forward rules and how sandwich leave is treated (see is sandwich leave legal in India).
- Working hours: standard hours, breaks, overtime approval and how it is paid.
- Pay: pay date, salary components, increments and deductions.
- Probation: length, review meeting, notice during probation and what changes on confirmation.
- Grievance: who to contact, timelines for a reply, and protection from retaliation.
- Exit: notice period, handover, final settlement timeline and documents issued.
Our employee handbook guide shows how to bring these together in one document.
What changed for startup HR policies in 2027?
The Labour Codes came into force on 21 November 2025, so policies and templates written before then may be out of date. Appointment letters are now required for every employee under the OSH Code. Salary structures must keep wages at least half of total pay under the Code on Wages. Fixed-term employees get gratuity when their contract ends, without the five-year rule. The PF wage ceiling is ₹25,000 a month from 17 September 2026, which matters once you reach 20 employees. Review your leave, pay, gratuity and exit policies against these points before 2027 payroll starts.
What mistakes do small startups make with policies?
- Copying a big-company handbook. It will be too long and may promise benefits you cannot afford.
- No POSH committee at 10 people. It is a common gap in small teams.
- Policies that nobody signs. Get every employee to acknowledge the policies in writing.
- No probation or grievance policy. These are where early disputes usually start.
- Never updating them. Review once a year and whenever the law changes.
How can HRTailor help?
HRTailor writes and maintains HR policies for startups with 5 to 100 employees, sets up POSH Internal Committees and keeps letters and policies in line with the Labour Codes. Start with our free startup HR policy pack, read the full HR policies for startups guide, or talk to us.
Frequently asked questions
How many HR policies does a 10-person startup need?
Most need 10 to 14 short policies: POSH, leave, working hours, pay, probation, code of conduct, grievance, health and safety, data and IT, remote work, maternity benefit, gratuity and exit.
Is a POSH policy mandatory for a startup with 10 employees?
Yes. Once you have 10 or more employees, you must form an Internal Committee and should publish a POSH policy.
Can a startup set its own leave policy?
Yes, as long as it gives at least the minimum leave set by your state’s Shops and Establishments Act.
Do employees need to sign HR policies?
It is not always a legal requirement, but a signed acknowledgement makes policies much easier to enforce.
Is there a free HR policy template for Indian startups?
Yes. HRTailor’s free startup HR policy pack includes templates you can adapt to your state and team size.
Sources: Gazette notifications S.O. 5322(E), S.O. 5319(E) and S.O. 5321(E) dated 21 November 2025; S.O. 5109(E) dated 17 September 2026; Code on Social Security, 2020 (First Schedule and section 53); Code on Wages, 2019 (section 2(y)); OSH Code, 2020; PIB release on the POSH Act, 12 February 2026. Checked 29 October 2026. Leave and working-hour minimums vary by state.
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