Employers of Record (EORs) in India: Everything you need to know

Learn all you need to know about EOR services in India.

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India is a popular choice for firms interested in expanding their hiring efforts to international markets. With nearly half a billion people in its labor force, India offers a large, diverse talent pool that appeals to many employers. In particular, the country is a hotbed for tech talent. Companies looking to hire international employees can’t overlook India as a potential source of new hires. 

Unfortunately, hiring across borders can be complicated, time-consuming, and expensive. With all the difficulties associated with setting up an entity in a foreign country, many companies look to EORs in India to solve the problem.

EORs in India

An employer of record (EOR) is a third-party organization that acts as the legal employer for a company’s international employees in a certain region or country. In this case, an employer of record in India would take on the legal and tax responsibilities of employing an international company’s remote workers in India.  

The advantage of working with an EOR in India is that you don’t have to go through the long, tedious process of setting up an entity in the country. Instead, you can turn to the EOR for expert insights into local labor laws, statutory benefits, work culture, and other relevant details for managing remote Indian talent. 

Using an EOR in India, you can tap into this talent pool without worrying about the legal and logistical details of global employment. For example, Oyster makes hiring across borders simple by handling all aspects of employment for you, including:

  • Compliance with local laws
  • Onboarding
  • Payroll
  • Benefits
  • Time off management
  • Offboarding

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A few things to know about hiring in India

If you’re considering hiring team members who live in India, you have to be aware of some key details. Indian labor laws and customs may be different from what you’re used to, so it’s important to keep these cultural differences in mind before hiring. Here are some of the key considerations for hiring talent in India.

Working hours and probationary period

Typical working hours in India are 48 hours per week, with people working eight or nine hours each day. If you require employees to work overtime, you must pay double their normal pay. The standard probationary period for new employees is three to six months. 

Vacation days

Depending on your industry and the state where your Indian workers are located, they are typically entitled to between 12 and 21 days of vacation time each year. Make sure these holidays are clearly outlined in the employment contract. Some employers choose to offer an additional 10 to 15 days of “casual leave” for urgent matters that may come up. 

Gratuity payments

Employees in India are entitled to a gratuity payment from their employer when they leave their jobs. This payment only applies if they’ve been working at the company for five or more years and were not terminated for gross negligence or misconduct. The gratuity is equal to 15 days’ wages for each year of service, up to a cap.  

Parental leave

If an employee in India has worked for 80 or more days in the last 12 months, she is entitled to anywhere from 12 to 26 weeks of maternity leave. The amount of maternity leave is dependent on how many children she has. 

Though paternity leave is not mandatory in India, some employers choose to grant it voluntarily. 

Employee termination

If you’re planning on firing an employee, you must provide at least one month of notice (or one month’s wages instead of this notice). The notice period only applies to employees who have been with the company for at least one year and weren’t terminated for misconduct.  

Employers must pay severance to employees who are being terminated for redundancy if they have worked for the company continuously for at least two years. The amount of the severance payment depends on the employee’s salary, performance, and duration of employment. 

Mandatory employer costs

Employers of workers based in India must pay 12% of every employee’s salary to the Employee Provident Fund (EPF). Additionally, employers may need to contribute to the Employees’ Deposit Linked Insurance Scheme (EDLI) for some employees, depending on their job types. 

For even more details, check out our complete guide to hiring in India

How much does it cost to hire in India?

Use our India employment cost calculator to get a better idea of how much you’d have to pay to employ a worker in the country. The calculator will break down how much tax you’ll pay as an employer, in addition to salary payments.   

If you’re interested in hiring and onboarding employees in India, Oyster can help. With Oyster’s global employment platform, you can easily hire, pay, and manage employees from anywhere in the world—including India. The platform ensures that you meet all local requirements and lets you seamlessly onboard your new hire. Managing a global workforce has never been so simple.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, hire, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.

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