Are Contract Employees Really Better for Small Software Firms? Let's Discuss the Pros and Cons

Hi, I am new to this HR field and wanted to know some details.

Leave Policies for Small Organizations
An organization with less than 10 employees may not provide leaves, and any leave taken can be deducted from wages. Does this apply even on a contract basis?

Advantages of Contract Employees
What are the advantages of contract employees over permanent employees in smaller firms, specifically in software consulting?

Probation Period and Leave Entitlement
What is the maximum probation period, and during this period, are employees entitled to leaves?

The firm will be covered under the Shop & Establishment Act of the respective state. You may consult it regarding the issues raised by you.

I do not know where your firm is located. In AP & Telangana, contract workers are entitled to one day of leave for every 20 working days. There is no probation period for contract workers. You need to assess for yourself the advantages based on your pay structure, etc. It will be difficult to advise in this regard.

Employee Classification and Legal Entitlements

Today, there is no difference between the employee of an establishment, a contract employee, and employees provided by a labor supplier agreement. All applicable laws are applied. If the contract employee is a piece-meal worker as per production, then no leave, etc., will be accrued to them. However, if they work like a company employee, then weekly holidays and other leave entitlements as per labor law, which is the minimum, are applicable.

Understanding Labor Laws and Benefits

Please buy Bare Laws of all the connected laws and familiarize yourself with them. If the law prescribes a minimum, then it is the establishment that decides whether to follow the labor laws and give additional benefits. For example, as per labor law, holidays are declared according to the Factories and Establishment Act. The government also declares holidays that are applicable to labor from time to time. Many companies follow the practice of closing whenever banks are closed during festivals (except for the weekly holidays they follow for normal working).

So, these are connected things to discuss with the company and what the law stipulates.