Employer of Record (EOR) in India
India’s vast market and growing economy present significant opportunities for business expansion. Our Employer of Record India services simplify the complexities of hiring and managing employees, ensuring compliance with local labor laws. We take care of payroll, taxes, and benefits, allowing you to scale your business operations without the necessity of setting up a legal entity.
Employment Benefits
Mandatory benefits
Mandatory contributions in India play a crucial role in ensuring social security for employees. Employers are required to make contributions to various schemes that provide financial security and health benefits to workers.
| Employees’ Provident Fund (EPF) | Employers contribute 12% of the employee’s basic salary (including dearness allowance).
Of the 12% contribution, 8.33% is allocated to the Employees’ Pension Scheme (EPS), and the remaining 3.67% goes to the EPF. |
| Employees’ State Insurance (ESI) | Employers will contribute 4% of the employee’s gross salary.
Employees contribute 1% of their gross salary to the ESI scheme. |
| Gratuity | Employers must pay gratuity at the rate of 15 days’ wages for each completed year of service to employees who have worked for five or more years. |
| Professional Tax | The rate varies by state but is mandatory in many states for employees earning above a certain threshold.
Employers are responsible for deducting this tax from employees’ salaries and remitting it to the state government. |
| Labour Welfare Fund | The contribution to the Labour Welfare Fund varies by state, but generally, employers are required to contribute a nominal amount, often ranging from Rs. 10 to Rs. 50 per employee per annum. |
In India’s competitive job market, offering a comprehensive benefits package is crucial for attracting and retaining top talent. Employers often provide additional benefits such as private health insurance, performance-based bonuses, flexible work arrangements, and opportunities for professional development, in addition to mandatory contributions to Provident Fund (PF), Employee State Insurance (ESI), and Gratuity.
These extra perks not only enhance employee satisfaction and productivity but also foster long-term loyalty, helping you build a dedicated and motivated workforce. By offering a well-rounded benefits package, you can strengthen your employment offer and create a supportive environment that promotes both personal and career growth.
Our Employer of Record (EOR) service in India can help you design a benefits package tailored to your industry and workforce requirements. We ensure that your benefits offerings are fully compliant with local regulations and meet the expectations of skilled professionals. By partnering with us, you can create a compelling benefits package that strengthens your employment offer and supports both employee well-being and career growth.
Additional perks and benefits
In addition to mandatory contributions, many companies offer additional perks and benefits to enhance employee satisfaction and retention. These may include flexible work arrangements, wellness programs, and performance bonuses.
The extra non-statutory benefits for employees in India include:
| Health insurance | Many employers provide comprehensive health insurance coverage for employees and their families, ensuring access to quality healthcare. |
| Paid time off | Employers often offer additional paid leave beyond statutory requirements, promoting work-life balance. |
| Employee training and development | Organisations invest in training programs to enhance employee skills and career advancement opportunities. |
| Work-life balance initiatives | Employers may implement programs like remote work options and family-friendly policies to support employees’ personal lives. |
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Working Hours and Leave Policies
Standard working hours
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Statutory working hours
Statutory working hours in India are designed to ensure a balance between work and personal life.
- Standard working hours: The standard working hours for employees are typically set at 48 hours per week, with a maximum of 9 hours per day.
- Rest days: Rest days for employees in India generally include one day off per week, usually Sunday, though this may vary by industry.
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Overtime regulations
Overtime regulations in India are critical to ensuring fair compensation for extra work.
Key overtime regulations include:
- Employees are entitled to overtime pay for hours worked beyond the statutory limit, typically at 1.5 times their regular rate.
- The law caps overtime hours, ensuring employees do not exceed the maximum working hours without proper compensation.
- Employers must maintain accurate records of overtime hours worked by employees.
- Overtime work must be voluntary and agreed upon by the employee.
Leave entitlements
Leave entitlements for employees in India encompass various categories to support their well-being.
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Annual leave:
Employees are entitled to a minimum of 12 days of paid annual leave per year, which can be accumulated if unused.
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Sick leave:
Employees typically receive around 10 days of paid sick leave annually, allowing them to take time off for health reasons.
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Maternity leave:
Female employees are entitled to 26 weeks of paid maternity leave for the birth of a child, ensuring job security during this period.
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Paternity leave:
Male employees can avail of up to 15 days of paid paternity leave, supporting family bonding after childbirth.
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Public holiday leave:
India observes 10-15 public holidays annually, during which employees are entitled to paid leave.
In India, detailed local laws govern employee leave entitlements, making strict compliance essential for your business. At AYP, we manage leave entitlements accurately and in full compliance with India’s regulations. Let us manage the complexities of local compliance, so you can concentrate on growing your core business.
Visa and Work Permits
Employment visas
Employment visas in India are crucial for foreign nationals seeking to work in the country, facilitating the recruitment of skilled professionals. Navigating the visa application process is essential for employers to ensure compliance with immigration regulations and secure the necessary permits for foreign employees.
Major employment visas in India include:
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Employment Visa (E-Visa)
The Employment Visa (E-Visa) is designed for foreign nationals possessing specialised skills and qualifications that are in demand in India. This visa allows skilled workers to contribute to local businesses and is typically granted for a duration of one year, with the possibility of extension based on employment needs.
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Intra-Company Transfer Visa
The Intra-Company Transfer Visa enables foreign employees to be transferred from their company’s overseas branch to an Indian branch. This visa facilitates the movement of key personnel, ensuring that organisations can maintain continuity and expertise across their global operations.
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Project Visa
The Project Visa is intended for foreign professionals who are engaged in specific projects within India for a limited duration. This visa is particularly useful for workers involved in infrastructure, engineering, or construction projects, allowing them to stay in the country for the project’s duration, typically up to five years, depending on the nature of the assignment.
Business visas
Business visas in India allow foreign nationals to engage in business activities without employment. They facilitate participation in conferences, trade fairs, and business meetings.
Major business visas in India include:
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Business Visa
For individuals visiting India to explore business opportunities or attend meetings.
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Conference Visa
For those attending conferences or seminars in India.
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Investment Visa
For investors planning to establish businesses in India.
Other relevant visa types
Other relevant visas in India include:
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Research Visa
For researchers conducting studies in India.
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Family Visa
For family members of foreign nationals residing in India.
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Employment Visa for Spouses
For spouses of foreign professionals seeking employment.
Navigating India ‘s employment visa and work permit regulations can be challenging due to strict rules and detailed requirements. Our Employer of Record (EOR) service simplifies the visa application process, ensuring full compliance with India ’s immigration laws. We handle everything from documentation to approvals, allowing you to onboard international talent quickly and seamlessly without the usual complications. Avoid the stress and potential delays—partner with us to ensure a smooth, compliant visa process.
Termination and Offboarding Procedure
In India, there is no standardized procedure for terminating employment; the process is typically governed by the terms outlined in the employee’s contract and the relevant provisions of the specific employment laws applicable to the employee type. Generally, employers are required to provide a written notice period of 30 days or compensation equivalent to 30 days’ wages, depending on the employment contract.
Employers must ensure compliance with the state’s Shops and Commercial Establishments Act to avoid wrongful termination claims. Contracted employees and freelancers covered under the Indian Contract Act can seek compensation for breach of contract under Section 73 and may pursue legal action if their contractual terms are violated.
During offboarding in India, employers should ensure all final payments are made, including wages, unused leave entitlements, and any applicable severance.
Offboarding and termination in India require careful attention to local labor laws. AYP’s Employer of Record (EOR) services simplify these processes, ensuring smooth transitions and full compliance with India’s regulations. Let us take care of the legal intricacies so you can focus on your business.
Advantages of Using Employer of Record through AYP
Partnering with AYP’s Employer of Record India offers substantial benefits in navigating the country’s complex employment regulations. Our comprehensive service manages payroll, benefits, and compliance with local labor laws, mitigating the risks associated with direct hiring.
With our deep knowledge of Indian employment laws, including regulations related to Provident Fund (PF), Employee State Insurance (ESI), and other statutory requirements, your company can confidently meet all legal obligations. This proactive management streamlines your administrative processes and shields you from potential penalties and legal challenges.
By relying on AYP for these essential functions, you can focus on growing your business and achieving your strategic objectives. Let AYP be your trusted Employer of Record India partner in delivering a seamless and compliant employment experience in India.
Contact us today, and allow our EOR India experts to handle the complexities of employment on your behalf.
FAQs
What is Employer of Record India?
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What is the process of hiring EOR employees in India?
AYP’s onboarding process for employees in India includes:
- Conducting a thorough analysis of the client’s requirements
- Performing a cost simulation for employee hiring
- Assisting with obtaining necessary work permits
- Preparing employment contracts that comply with local regulations
- Enrolling employees in benefits programs
- Sending a welcome email to new hires
Hire compliantly in the India with no hidden cost
Local labor compliance, payroll management, onboarding, and expert advisory — all in one service