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Employee Database for Indian Companies: Records You Must Maintain

Every employment relationship generates paperwork, and Indian law is specific about which of that paperwork an employer must retain, for how long, and in what form. This reference covers the full ambit of employee data, from the day someone joins to the day their full and final settlement is processed, along with the statutory obligations that attach to each category.

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Personal and Contact Information

The provenance of most statutory obligations in Indian employment law is the employee's personal record. Date of birth determines PF and gratuity eligibility windows. Gender governs which maternity and paternity benefit provisions apply. Nationality is germane when engaging foreign nationals, where separate work permit and TDS rules come into force. Marital status affects insurance nominations and certain tax declarations.

These are not administrative details to collect and file away. They are the foundation against which every statutory calculation and document issued over the course of employment is validated. An error in a date of birth or name that does not match the Aadhaar card can create problems that surface months or years later, often during an audit or a dispute.

Contact information, particularly the residential address and email address, feeds into PF correspondence, payslip delivery, and official notices. Keeping these current is the employer's practical interest as much as the employee's.

  • Full name as per official documents. The name on the offer letter, payslips, and all statutory records must match the name on the employee's Aadhaar and PAN. A mismatch across documents is one of the most common causes of PF withdrawal delays and background verification flags.
  • Date of birth. Used for PF eligibility, gratuity calculations, and any age-specific benefit entitlements. Must be corroborated by a government-issued document at the time of joining.
  • Gender. Required for diversity records and to correctly apply gender-specific statutory provisions such as the Maternity Benefit Act and ESI maternity claim procedures.
  • Nationality. For foreign nationals, work permits, visa details, and the applicable tax treaty status need to be recorded and monitored for expiry dates.
  • Residential address. Used in PF forms, statutory correspondence, and, in some states, for professional tax registration. Should be updated promptly when an employee relocates.
  • Personal email and phone number. Essential for direct communication, particularly during the exit process when official access may already be revoked.

Employment Details

These fields govern every tenure-based benefit calculation and define the employee's standing within the organisation at any point in time.

Date of joining

This is the single most consequential date in an employment record. It determines when gratuity eligibility accrues, how leave entitlement is calculated in the joining year, when probation confirmation falls due, and the reference point for any tenure-linked benefit under the employment contract. Under the New Labour Codes effective November 2025, it also determines when fixed-term employees begin accruing proportional gratuity.

Employment type and probation period

Whether an employee is permanent, probationary, or on a fixed-term contract affects their benefit entitlements, notice period obligations, and statutory coverage under PF and ESI. The probation end date should be tracked so that confirmation letters are issued on time. A probationer who continues working past their probation date without a formal confirmation letter may be treated as a confirmed employee by a court or labour authority.

Job title, department and reporting manager

These three fields appear on offer letters, increment letters, separation documents, and experience letters. Inconsistency across documents issued at different stages of employment is one of the more common causes of background verification queries. Keeping them current and reflected accurately in every document issued is the cleaner approach.

Work location

The city and state of work location governs which state's Shops and Establishments Act applies, which minimum wage schedule is relevant, and which professional tax slab is applicable. For employees who relocate or work from multiple locations, the primary work location on record should reflect the location used for the bulk of statutory filings. This is worth establishing clearly at the point of engagement rather than correcting it retrospectively.

Compensation, Financial Details and Statutory Compliance

Payroll and statutory compliance are not separate functions. The salary structure directly determines PF contributions, ESI applicability, TDS deductions, and gratuity calculations. Every figure that appears on a payslip traces back to what is recorded in the employee's compensation record.

  1. Basic salary

    The basic salary is the foundation of PF, ESI, and gratuity calculations. Under the New Labour Codes effective November 2025, basic pay must constitute at least 50 percent of total gross compensation. Allowances cannot be inflated to suppress the basic salary figure to reduce statutory contribution costs. This rule applies to new contracts and to revised salary structures going forward.

  2. Allowances: HRA, medical and special allowances

    House Rent Allowance is relevant for the employee's tax exemption claims and must be documented accurately against the actual rent paid. Medical allowances up to the prescribed limit have a separate tax treatment. Special allowances are typically fully taxable. The breakdown between basic and allowances matters for both the employer's statutory contributions and the employee's Form 16.

  3. Bank account details

    Salary must be credited to the employee's registered bank account. The account number, IFSC code, and account holder name should exactly match the employee's identity documents. An employer crediting salary to an unverified account assumes the risk of the transfer not reaching the intended person, which becomes relevant if the employee later raises a non-payment dispute.

  4. PAN and UAN

    The PAN is required for TDS deductions and must be linked to the salary record from the first payroll cycle. Employees who do not submit a PAN are subject to TDS at a higher flat rate. The Universal Account Number is the PF system's identifier for the employee across all employers. It must be activated, seeded with the employee's Aadhaar and PAN, and used for all subsequent PF contributions.

  5. ESI number and professional tax

    Employees with a gross monthly salary up to the prescribed ESI threshold are covered under the Employee State Insurance scheme. The employer must obtain an ESI number for each such employee and maintain contribution records. Professional tax is levied by states that have enacted it, based on salary slabs. The applicable slab depends on the employee's state of work location, not their state of residence.

  6. Gratuity eligibility tracking

    Under the Payment of Gratuity Act, 1972, an employee becomes eligible for gratuity after five years of continuous service. The date of joining and any breaks in service must be recorded accurately to determine eligibility. Fixed-term employees are entitled to proportional gratuity after one year of service under the New Labour Codes. Gratuity liability is a real financial obligation and should be accounted for from the point an employee is likely to complete the eligibility period.

KYC Documents and Health and Insurance Records

KYC documentation establishes the identity of the employee in the employer's records and underpins every statutory filing made on their behalf.

Identity and address proof

Aadhaar is the primary identity document for most statutory purposes in India, including UAN seeding and ESI registration. A voter ID or passport serves as an alternative. Address proof is required for PF and certain state-level statutory registrations. A copy of the identity and address document should be collected at joining and updated if the employee's address changes during their tenure.

Educational certificates and prior employment records

Educational qualifications validate the employee's stated credentials for the role. Experience letters and relieving letters from prior employers are the standard expectation during background verification. Salary slips from the previous employer may be requested by the company for payroll benchmarking. These are not statutory mandates but are part of standard due diligence, particularly for roles with fiduciary or regulatory responsibilities.

Nominee details

Nominee information is required for PF, gratuity, and group insurance coverage. The nominee is the person who receives the statutory benefits in the event of the employee's death. PF nominations are made through the EPFO portal. Group insurance nominees are recorded with the insurer. An employee record without a nominee declaration is incomplete and creates a procedural lacuna if a claim is ever required.

Health insurance and ESI details

For employees covered under ESI, the ESI card and IP number are the relevant records. For employees above the ESI salary threshold, company-provided health insurance details, including policy number, coverage amount, and the names of insured dependants, should be on file. Medical fitness certificates are required in certain regulated sectors, including food handling and manufacturing, and must be renewed at the prescribed intervals.

Attendance, Leave Management and Tax Records

Attendance records are not just an operational tool. They are the basis for calculating overtime pay, validating the number of days worked in a month for payroll, and substantiating wage compliance during an inspection under the Payment of Wages Act or the applicable Shops and Establishments Act.

Leave records must distinguish between leave types because each carries a different statutory treatment. Earned leave that accrues and is not taken must be encashed at exit under most state laws. Sick leave and casual leave are typically not encashable. Maternity leave under the Maternity Benefit Act is a separate entitlement altogether, with its own eligibility conditions and benefit structure that the employer funds directly.

Tax records, primarily TDS deductions and Form 16 issuances, must be maintained in a form that can be reconciled with the company's quarterly TDS returns filed with the Income Tax Department. An employee who disputes their Form 16 or who is flagged during an income tax assessment will look to the employer's payroll and TDS records to resolve the discrepancy.

  • Attendance registers. Daily attendance records showing working hours and overtime are required under the Payment of Wages Act. Biometric or digital attendance systems generate these records automatically, but they must be stored in a retrievable format for the duration required by the applicable statute.
  • Leave ledger per employee. Tracks accrual, availed leave, and the balance for each leave type: earned leave, sick leave, casual leave, and any company-specific leave categories. The ledger is used at exit to calculate leave encashment.
  • Maternity and paternity leave records. Maternity leave of up to 26 weeks is mandated for eligible employees under the Maternity Benefit Act, 1961. Records must show the leave duration, the benefit amount paid, and the employee's return to work or otherwise.
  • TDS records and Form 16. TDS deductions must be deposited with the government by the due dates and reported in quarterly TDS returns. Form 16 is issued annually to each employee and is their primary document for income tax filing. The figures in Form 16 must be reconcilable with the employee's monthly salary slips.
  • Investment declarations and proofs. Employees submit investment declarations at the start of the financial year to guide TDS computation. Actual proofs are collected before the year ends. Mismatches between declared and submitted amounts affect the final TDS figure and must be reconciled before Form 16 is issued.

Exit Records and Legal Compliance

The documentation generated at the end of an employment relationship has a longer shelf life than most of the records created during it. These records are what gets examined in disputes, audits, and background checks years after the employee has left. For a detailed walkthrough of the exit process itself, see the employee exit guide.

  1. Resignation and acceptance letters

    A written resignation and a written acceptance are the two documents that fix the notice period start date and the agreed last working day. Without both, the departure timeline is subject to retrospective interpretation by either party. If the notice period is waived, that too should be confirmed in writing, along with the payment in lieu arrangement.

  2. Relieving letter and experience letter

    The relieving letter confirms the employee has been formally relieved of their duties and all exit formalities have been completed. The experience letter confirms the tenure and role. Both are standard requirements during background verification at most companies. Delays in issuing these documents after the last working day create reputational risk for the employer and practical difficulties for the departing employee.

  3. Full and final settlement statement

    The settlement statement covers every tranche of the final payment: salary for days worked, leave encashment, any unpaid bonuses or reimbursements, notice pay shortfall if applicable, and gratuity. It also records recoveries such as advances or company assets not returned. Both the employer and the employee should retain a signed copy. This document is the financial closure of the employment relationship.

  4. Company property return records

    A written record of assets returned by the employee, including laptops, access cards, mobile devices, and any other company property, should be signed by both parties at the time of exit clearance. This record is particularly relevant if property is reported missing after the employee has left or if there is a disagreement about what was returned.

  5. Shops and Establishments Act registers

    The Shops and Establishments Acts of most states require employers to maintain wage registers, attendance registers, leave records, and employment registers in prescribed formats. The exact requirements vary by state. Inspectors can ask to see these registers during a visit. Maintaining them in the prescribed format, for the period the state law specifies, is the apposite approach rather than trying to reconstruct them after the fact.

  6. POSH compliance records

    Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, employers with ten or more employees must constitute an Internal Complaints Committee and maintain records of complaints, inquiries, and outcomes. Acknowledgment of the POSH policy by all employees should also be documented. These records must be submitted in the employer's annual report.

Field Reference by Category

A quick reference of the fields that belong in a complete employee record, organised by category.

Category Key Fields Primary Purpose
Personal Full name, date of birth, gender, nationality, marital status Statutory benefit eligibility and identity verification across all filings
Contact Residential address, phone number, personal email PF and statutory correspondence; direct communication during exit
Employment Employee code, date of joining, job title, department, employment type, probation end date, work location Tenure-based benefit calculations and document consistency across the lifecycle
Compensation Basic salary, allowances, incentives, bank account details Payroll, PF and ESI contributions, TDS computation, gratuity calculation
Statutory identifiers PAN, UAN, Aadhaar, ESI number, professional tax code PF deposits, TDS deductions, ESI contributions, state tax compliance
KYC documents ID proof, address proof, educational certificates, prior employment records, nominee details Background verification, PF nomination, regulatory due diligence
Attendance and leave Daily attendance log, leave ledger by type, overtime records Payroll validation, leave encashment calculation, statutory wage compliance
Tax and insurance Form 16, TDS register, investment declarations and proofs, insurance policy details Income tax filing support, TDS reconciliation, insurance claim processing
Exit and settlement Resignation letter, acceptance, relieving letter, experience letter, FNF statement, gratuity records, property return acknowledgment Clean separation, background verification support, legal closure
Legal compliance Shops and Establishments registers, minimum wages records, POSH policy acknowledgments, maternity benefit records Statutory audit readiness and labour inspector visits

Frequently Asked Questions

What employee records are mandatory under Indian law?
The Employees Provident Fund Act requires UAN and PF contribution records. The ESI Act requires ESI numbers and contribution registers. The Payment of Gratuity Act requires joining date and continuous service records. The Payment of Wages Act requires wage registers. Each state's Shops and Establishments Act specifies additional registers. The New Labour Codes, effective November 2025, require appointment letters and records that substantiate the 50 percent basic wage rule.
How long should employee records be kept in India?
PF and ESI records should be kept for at least five years after an employee's exit. Wage registers and attendance records under the Payment of Wages Act require three years. Gratuity records should be held until the liability is settled. As a practical rule, retaining all employment records for seven years from the date of separation covers most statutory audit windows across different states.
What is a UAN number and why does an employer need to record it?
A Universal Account Number, or UAN, is a twelve-digit identifier issued by the Employees Provident Fund Organisation that travels with an employee across employers. The employer must seed it against the employee's Aadhaar and PAN, activate it, and route all monthly PF contributions through it. Without a valid UAN on record, PF contributions cannot be deposited correctly.
Which records are needed to calculate gratuity correctly?
Gratuity under the Payment of Gratuity Act, 1972, requires the date of joining, date of separation, last drawn basic salary plus dearness allowance, and a record of any breaks in service. Under the New Labour Codes effective November 2025, fixed-term employees accrue proportional gratuity after one year, so joining date and contract type must be recorded accurately from the outset.
What KYC documents does an employer need to collect from an employee in India?
An employer needs Aadhaar for identity verification and UAN seeding, a PAN card for TDS deductions, bank account details for salary disbursement, and address proof for statutory filings. Nominee details are required for PF. Educational certificates and prior experience letters are not statutory mandates but are standard practice for background verification at most companies.
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