HR for multi-site businesses in India
Reviewed by Mellow Editorial Team, HR & payroll content team
Managing HR across multiple locations in India is harder than managing it in one place — different state labour rules, varying cost structures, and employees who may never meet each other or their managers. The guidance below focuses on what actually breaks down across sites and how to prevent it.
Why multi-site HR is structurally different
A single-site business has one set of relationships: one office, one local labour department, one vendor for statutory filings. Add a second city and you double the complexity before you hire a single new person.
Each state in India has its own Shops and Establishments Act, its own Professional Tax (PT) slabs and registration requirements, and its own labour inspectorate. A factory in Tamil Nadu operates under different rules from a warehouse in Maharashtra or a sales office in Delhi. Your HR processes need to account for each of these, separately.
The four consolidated Labour Codes — which came into force in 2025 — have standardised some definitions and procedures at the central level, but state governments still notify their own rules under each Code. Compliance is not uniform yet. Do not assume a process that works in Bengaluru will automatically satisfy Hyderabad.
Statutory compliance by location
The minimum viable compliance checklist for each new site includes:
Shops and Establishments registration. Required in most states before you open. The applicable Act, the fee, the renewal cycle and the inspection regime vary by state.
Professional Tax. States including Maharashtra, Karnataka, West Bengal and Tamil Nadu levy PT on salaried employees. Slabs and due dates differ. You need a separate PT registration in each applicable state and a mechanism to deduct the correct amount per location.
EPF and ESI. Employee Provident Fund (12% employee, 12% employer contribution) and ESI (for employees below the applicable wage threshold) are central-level registrations, but your ECR (Electronic Challan cum Return) must correctly report employees by establishment. If you run multiple establishments under a single EPFO code, be precise about sub-codes.
TDS and payroll tax. TDS is deducted at source regardless of location. Employers file Form 24Q quarterly and issue Form 16 annually. Under the new income tax regime, slabs rise to a top rate of 30%, with a section 87A rebate for lower-income earners and a 4% health and education cess. The deduction mechanics do not change by state, but payroll inputs — particularly PT deductions — do.
Gratuity. Payable after five years of continuous service. This is a central-level obligation but factor it into your per-location cost modelling, especially for sites where attrition tends to cluster just under the five-year mark.
Structuring your HR team for multiple sites
The two common models are a centralised HR function that manages all sites from a head office, or an HR business partner (HRBP) embedded at each site with central oversight.
Centralised HR is cheaper and consistent, but it creates distance. A grievance in a Chennai warehouse that takes three days to reach someone with authority to act is a grievance that festers.
Embedded HRBPs are more responsive but require rigorous process alignment. Without it, each site develops its own norms — different leave approval habits, different onboarding quality, different documentation standards — and you accumulate compliance risk silently.
A practical middle path: keep statutory compliance, payroll processing and policy ownership central, and place a generalist or senior HR executive at each significant site with a defined scope. The generalist handles day-to-day people matters; the central team handles filings, audits and anything that creates legal exposure. This also means you have one person accountable for each type of risk.
Keeping records and documentation consistent
Multi-site businesses fail HR audits most often because of inconsistent record-keeping, not deliberate non-compliance. Forms are filed late in one location, attendance records are kept in a different format, appointment letters use outdated templates.
Set mandatory document standards centrally: a single appointment letter template (updated for each state-specific clause where needed), a single leave management system, a single performance review format. Give site HR teams no discretion on these. Give them discretion on things that do not create legal risk — team events, local engagement activities, informal check-ins.
Audit each site at least once a year against your compliance checklist. Do not rely on self-reporting.
Managing payroll across sites
Running payroll for employees in multiple states means multiple inputs arriving from different sources on different timelines. A site manager in Pune may submit attendance data late. A new PT registration in Gujarat may not be in place before the first payroll run.
Build your payroll calendar to close inputs from all sites two to three days before the processing deadline — not one. Build in a review step where a central payroll owner checks that each location's statutory deductions (PT, EPF, ESI, TDS) are correctly applied before salaries are released. One payroll run with wrong PT deductions in Karnataka can require amended returns and employee reconciliation that costs more time than the original error.
If you are managing payroll across international contractors or employees in addition to your India sites, how Mellow runs payroll across six countries on one platform covers how that consolidation works in practice.
What to prioritise first
If you are opening a second or third site and feel the HR complexity mounting, address these in order: get your statutory registrations right for each location before you worry about culture or engagement; standardise your payroll inputs and processing so errors do not compound across sites; then build a documentation and record-keeping system that does not depend on any individual's memory or goodwill.
Everything else — employer branding, learning programmes, engagement surveys — has value, but it sits on top of this foundation. If the foundation is inconsistent across sites, you carry compliance risk that will eventually surface.
---
Run HR and payroll in India with Mellow
Mellow brings HR, payroll and 12 AI agents into one platform — built to handle India properly, with payroll included, from £4 per employee per month. The AI agents don't just answer questions; they generate contracts, run cost estimates and draft letters for you.
[Start a free trial →](/register)