Most small businesses in Gujarat do not have a dedicated HR person. The owner or an accountant handles hiring, salaries and leave alongside everything else, and paperwork tends to be informal. That usually works until something goes wrong: an employee disputes their salary, a labour inspector asks for records, or a key person leaves without notice. A small amount of structure prevents most of these problems. This guide covers the basics every small business should have in place.
- Give every employee a written appointment letter and keep a file for each.
- Keep accurate attendance, leave and wage records and pay on a fixed date.
- Check which registrations apply to you with a qualified professional.
Important: this article is general guidance, not legal advice. Labour laws and rules change, and what applies to you depends on your type of business, location, headcount and wages. Confirm your specific obligations with a labour law consultant, chartered accountant or lawyer.
1. Written appointment letters
Every employee, including shop-floor, sales and part-time staff, should receive a written appointment letter. It should clearly state:
- Name, designation and place of work.
- Date of joining and probation period, if any.
- Salary structure: basic, allowances, deductions and any incentives.
- Working hours, weekly off and overtime rules.
- Leave entitlement.
- Notice period on both sides.
- Confidentiality and other conditions relevant to the role.
Keep a copy signed by the employee. A clear letter prevents most "that is not what I was told" disputes later.
2. Personnel files
Maintain a simple file, paper or digital, for each employee with:
- The signed appointment letter and any revisions.
- Identity and address proof, educational and experience documents as relevant.
- Bank details for salary payment.
- Emergency contact.
- Records of increments, warnings, appreciation and exit.
Store personal documents securely and limit who can access them.
Want help setting up appointment letters, policies, attendance and leave records? Talk to our HR team.
3. Attendance and leave records
Accurate attendance records protect both the business and the employee. Whether you use a register, a biometric device or an app, make sure you record:
- Daily attendance, with in and out times where hours matter.
- Overtime worked.
- Leave taken by type (casual, sick, earned) and the balance.
- Weekly offs and holidays.
Write down your leave policy, including how leave is applied for and approved, and whether unused leave is carried forward or encashed. Apply it consistently to everyone.
- Appointment letter
Role, salary, hours, leave and notice in writing.
- Personnel file
Documents, bank details and records for each employee.
- Attendance and leave
One system everyone uses, applied consistently.
- Payroll
Fixed pay date, salary slips and correct deductions.
- Policies
A short handbook, including POSH where it applies.
4. Payroll and wage records
- Pay on a fixed date every month, preferably by bank transfer for a clear record.
- Give a salary slip showing earnings and deductions.
- Keep wage records that match attendance, overtime and deductions.
- Check minimum wages: Gujarat notifies minimum wage rates by type of employment and area, and they are revised periodically.
- Deduct and deposit statutory contributions correctly where they apply.
5. Registrations to check
Depending on your business, location, headcount and wages, registrations and filings to discuss with your consultant may include:
- Shop and establishment registration under the applicable Gujarat law, for shops, offices and commercial establishments.
- Factory licence for manufacturing units that fall under factory law.
- Professional tax, which is levied in Gujarat.
- Provident Fund (EPF) and ESIC, which apply above certain employee and wage thresholds.
- Contract labour requirements if you engage workers through contractors.
India's labour laws are being consolidated into four labour codes, so thresholds and procedures may differ from what you followed earlier. This is one more reason to check with a professional rather than relying on old practice.
6. Workplace policies
A short employee handbook, even a few pages, sets expectations and makes decisions fairer. Common policies include:
- Working hours, attendance and punctuality.
- Leave and holidays.
- Code of conduct, including use of phones and company property.
- Prevention of sexual harassment (POSH): under the POSH Act, 2013, workplaces with 10 or more employees must constitute an Internal Committee. A written policy and awareness are good practice for every business.
- Confidentiality and data protection, especially where staff handle customer data.
- Disciplinary process: warnings, inquiry and appeal steps.
Share policies with employees, explain them in a language they understand, and keep a record that they received them.
7. Exits and full-and-final settlement
- Accept resignations in writing and confirm the last working day.
- Collect company property and remove system access on the last day.
- Settle salary, leave encashment (if applicable) and other dues within a reasonable, defined time.
- Issue an experience or relieving letter.
- Handle any gratuity or statutory dues as applicable.
A fair, quick exit protects your reputation, which matters when you hire again.
A simple starting checklist
- Appointment letters for all current employees.
- One file per employee.
- An attendance and leave system everyone uses.
- Salary paid on a fixed date with salary slips.
- A review of which registrations apply, with a professional.
- A short handbook with the key policies.
- A standard exit process.
How Job Vista can help
Job Vista is a Surat-based recruitment and HR services business. Our HR consulting team helps small and growing businesses set up appointment letters, policies, attendance and leave records, and hiring processes, and we work with your legal and accounting advisors on statutory matters. Learn more about our HR consulting service, or share an opening if you are hiring.
