An Employer of Record (EOR) in India offers a valuable solution for companies looking to expand their operations or hire talent in a foreign country without establishing a legal entity. By partnering with an EOR, companies can access India’s vast talent pool while mitigating the complexities and risks associated with local compliance and employment laws. The EOR plays the role of an official employer, managing crucial tasks such as payroll management, tax compliance, benefits administration, and HR-related obligations. EORs ensure adherence to local regulations, generate employment contracts, manage employee onboarding, and provide solid support for hassle-free operations. Additionally, EORs in India offer expertise in navigating cultural nuances, managing payroll taxes, and providing localized support to companies and their workforce. This enables businesses to focus on their core operations and expansion-related activities while leaving administrative and legal responsibilities to the EOR.

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India has a highly skilled workforce, with a large pool of professionals in various industries. The country offers competitive labor costs and quality talent. 

By partnering with an EOR, you can effortlessly tap into India’s talent pool. You can onboard local employees faster without establishing legal entities in the country. Further, you can avoid risks and challenges in generating employment contracts, tax compliance, and payroll administration. 

Using EOR services in India will help you adhere to the complex employment regulations failing, which can result in hefty penalties. For example, Byju’s, an ed-tech company, recently delayed employee PF payments for almost 3-4 months. They made this error despite extensive hiring experience in the Indian market. As a result of this misstep, Byju’s may attract a penalty of up to 100% of the amount due.

As per the EPFO regulations, a company delaying PF contributions is liable to pay Damages & Interest on the amount due. Here are the rates at which damages are covered due to delayed contributions.

• 0-2 months - 5%
• 2-4 months - 10%
• 4-6 months - 15%
• More than 6 months - 25%

To avoid such employment issues, partnering with an EOR is critical. Gloroots’ India EOR services can facilitate your entry into the rapidly growing market by providing local expertise and networks. Our platform ensures 100% compliance with India’s complex labor laws, reducing legal risks and penalties. In short, you can streamline operations and keep up with the changing compliance scenario with Gloroots as your trusted EOR partner in India.

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EOR/PEO pricing in India can vary based on several factors, including the number of employees, the scope of services required, and the specific EOR provider. The pricing range for EOR services in India typically falls between 5% to 15% of the employee's total compensation. However, note that additional fees may apply for specific services or customization.

In India, the EOR pricing structure is either calculated as a percentage of the employee's salary or as a fixed monthly fee per employee. However, to determine the most suitable pricing for your business needs we recommend obtaining personalized quotes from different EOR providers. Compare the prices and offerings based on the services, expertise, and support levels provided to choose the best fit.

Gloroots offers a simple pricing model that provides optimum investment value. We manage employment-related admin tasks and legal compliances. Moreover, Gloroots offers a live dashboard that helps you track your Indian workforce expenses in real-time. It also offers HR support and benefits management to the employees hired through EOR.

Key Metrics For Foreign Employers 

India has one of the most largest skilled workforces. Since the 1990s, India has always been eyed by foreign employers as one of the most lucrative, affordable countries to hire tech and business talent.  According to Linkedin’s State of Hiring Report, India is the only country to have a talent surplus by 2030.

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The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Argentina.

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Source: The Global Talent Competitiveness Index 2022

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Through the Gloroots’ Recrew platform, you can discover amazing talent in Argentina.

India is the 5th largest economy by nominal GDP and is growing by ~7% YoY. With over 700 million people in the age group of 18-64 years and another 250 million will join the workforce in the next five to ten years.

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India is home to some of the best engineering schools in the world and graduates over 1.5 million engineers every year. With such a large english speaking talent pool, India has been the perfect destination for IT and Business Process Outsourcing. India boasts to be the satellite technology offices for companies like Google, Meta, Amazon, Microsoft, Airbnb, Nutanix, Citibank and JP Morgan.

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India provides significant cost arbitrage for talent, with average software engineering salaries of $20000.

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Through the Gloroots’ Recrew platform, you can discover amazing talent in India.

Employing in India requires navigating a complex landscape of legal and administrative requirements, including compliance with employment laws, payroll management, tax obligations, and benefits administration. This can be a challenging task for foreign employers.

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With Gloroots' global Employer of Record (EoR) service, you can streamline your expansion into India. Gloroots takes care of the intricate tasks of payroll processing, tax compliance, benefits management, and ensuring adherence to local employment regulations. By entrusting these responsibilities to Gloroots, you can focus on fostering a productive work environment and driving business growth.

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Discover how Gloroots' Recrew platform can help you find exceptional talent in India and create a successful team for your global expansion. Let Gloroots be your trusted partner in navigating the complexities of the Indian employment landscape, ensuring compliance, and empowering your business to thrive.

The issue of "employee misclassification" occurs when employers inaccurately classify workers, often labeling them as independent contractors to avoid providing employment rights and benefits typically granted to permanent employees, despite the workers performing duties similar to those of permanent employees.

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By partnering with a Professional Employer Organization (PEO) or Employer of Record (EOR) in India, you can ensure accurate worker classification and the preparation of proper employment agreements. These experienced professionals are well-versed in labor laws and can provide guidance to ensure compliance. They handle precise payroll processing, accurate classification of employees, and comprehensive benefits administration, allowing you to focus on your core business activities while entrusting employment-related obligations to seasoned experts. With their support, you can mitigate the risks associated with employee misclassification and ensure a fair and compliant workforce.

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Discover how Gloroots can help you grow your team in India and navigate the complexities of the Indian labor market, ensuring smooth operations, legal compliance, and empowering you to drive business growth.

India’s employment laws are informed by its four new labour codes are the Code on Wages 2019, the Code on Social Security 2020, the Occupational Safety, Health and Working Conditions Code 2020 and the Industrial Relations Code 2020.  

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Partner with an Indian PEO or EOR like Gloroots to help you hire compliantly amid these complex labor laws.

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Employment Contract

In India, written employment agreements are not mandatory in all states, but it is highly advisable to have a comprehensive employment contract in place due to the intricate nature of statutory and regional labor laws. The employment contract should include detailed provisions regarding payment, and it is mandatory to specify salaries in Indian Rupees.

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Indian law permits the use of fixed-term employment contracts when there is a specific short-term need for the employee's services. It is important to note that consecutive short-term contracts cannot be used to hire an employee. Unless explicitly specified, employment agreements in India are generally considered to be of a permanent nature.

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The contract must include:

• Names of the parties involved
• Job description
• Non-competition agreement
• Non-disclosure agreement
• Period of employment
• Notice period
• Leaves
• Benefits
• Compensation
• Specific terms for termination of employment

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This might sound overwhelming, but it doesn't have to be. Gloroots eliminates these barriers for you. With Gloroots' Employer of Record offering, hiring and managing employees globally is a piece of cake.

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Get an overview of what you need to know when hiring in the India. Contact us.

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Working Hour 

Any work performed beyond the regular 48 hours per week in India is considered overtime and is subject to specific regulations outlined in employment contracts. Overtime pay is typically calculated at a rate of 200% of the regular pay rate. This ensures that employees are compensated fairly for the additional hours they work beyond the standard working hours.

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Overtime

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Overtime work in India, exceeding the standard 48 hours per week, is compensated as per employment contracts. Typically, the overtime pay rate is calculated at 200% of the regular pay rate. This ensures that employees are appropriately remunerated for the additional hours they work beyond the normal working hours.

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Minimum Wage

The minimum wage in India is determined by individual state governments and varies based on different job categories and types of employment. The process of setting minimum wages involves defining numerous job roles for unskilled workers and over 400 employment categories, each with its own minimum daily wage. 

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The recent implementation of the New Labour Code has raised the minimum wage to Rs 15,000 per month, which is 14.5 times higher than the previous amount.

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Maternity Leave and Paternity Leave

Indian employees have a minimum entitlement of 15 days of paid annual leave, as mandated by labor laws. Factory workers, governed by the national Factories Act, typically receive 19 paid vacation days per year. If employees are unable to utilize their full leave entitlement within the current year, they are permitted to carry forward up to 30 days of unused leave to the following year.

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In addition to annual leave, there are three national holidays observed across the entire country. Moreover, India celebrates a significant number of regional festival holidays. Since public holidays vary from state to state, Indian legislation stipulates that employers must provide their employees with a minimum of ten paid public holidays each year.

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Annual leave

Indian employees have a minimum entitlement of 15 days of paid annual leave, as mandated by labor laws. Factory workers, governed by the national Factories Act, typically receive 19 paid vacation days per year. If employees are unable to utilize their full leave entitlement within the current year, they are permitted to carry forward up to 30 days of unused leave to the following year.

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In addition to annual leave, there are three national holidays observed across the entire country. Moreover, India celebrates a significant number of regional festival holidays. Since public holidays vary from state to state, Indian legislation stipulates that employers must provide their employees with a minimum of ten paid public holidays each year.

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Sick Leave

Employees who have completed a continuous period of at least 3 months of employment are entitled to 15 days of paid sick leave per year. To avail this benefit, employees must furnish a medical certificate within 48 hours of the first day of sickness.

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During sick leave, employees receive payment equivalent to 70% of their regular daily salary rate. It is important to note that for private sector employees, the responsibility of paying sick leave lies with the employer and cannot be reimbursed by the government. In the case of factory employees, they do not have a separate category of sick leave, and they utilize their annual leave for any sick or casual leave.

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There are no specific provisions in place for paid sick leave in situations where employees require long-term sick leave or sustain injuries during the course of their employment.

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Any unpaid time off provided to employees is entirely at the discretion of the employer and is not mandated by law.

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INCOME TAX

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Other Taxes and Social Security contribution

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Employer contribution

Termination Process

In India, the termination process follows a standard procedure that includes providing notice periods, except in cases where an employer can justify immediate dismissal without notice due to reasons such as misconduct, disobedience, lack of skill, neglect of duties, or unauthorized absence.

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It is important to note that pregnant employees or those on maternity leave are protected from termination.

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Notice Period

Employers are generally required to give a one-month notice.

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Severance Pay

In the event of redundancy, employers in India are required to provide retrenchment compensation to affected employees. This compensation is calculated at a rate of 15 days' average pay for each completed year of continuous service or part thereof exceeding 6 months.

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The provisions related to retrenchment in the Industrial Relations Code align with those stated in the Industrial Disputes Act. However, the compensation calculation for retrenchment is based on 15 days' average pay or the average pay for a specified number of days as notified by the appropriate government, for each completed year of continuous service or any part thereof exceeding 6 months.

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Furthermore, the Industrial Relations Code mandates that employers contribute an amount equivalent to 15 days' wages or the amount specified by the government, per retrenched worker, to a "worker re-skilling fund."

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Additionally, employers must provide certain termination benefits to employees who are dismissed, including encashment of accrued leave, gratuity payment for employees with 5 years or more of continuous service (regardless of whether they are classified as workmen or not), payment in lieu of notice (if no notice is given), statutory bonus payment, and any other outstanding amounts as per the employment contract.

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Employees terminated due to misconduct are not entitled to receive notice pay or retrenchment compensation.

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Probation Periods

In India, probation periods vary depending on the employee's role and seniority, typically ranging from 3 to 6 months.

Businesses face several challenges in hiring workers internationally while maintaining compliance. Employers must handle all hiring and onboarding procedures while ensuring adherence to employment rules, payroll procedures, DE&I compliance, GDPR, and other data protection regulations. 

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Additionally, setting up legal entities and employing staff abroad while keeping up with the constantly shifting regulatory landscape is monumental. But the good news is that your efforts can be kept to a minimum with Gloroots. 

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Gloroots can handle everything related to onboarding, payments, tax compliance, etc. Our EOR services can help you create employment contracts, manage on-time payments, offer employee benefits and comply with local regulation. Our team of professionals ensures that all risks associated with cross-border employment and payroll compliance are reduced, allowing you to concentrate solely on selecting candidates who are a good fit for your company.

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