Employer of record in India: the statutory obligations checklist

Why this list matters before you engage anyone

Engaging contractors in India on an invoice-only basis is common and superficially simple. It stays simple right up until an audit, a client due-diligence questionnaire, a provident fund inspection or a dispute over notice. At that point the question is not whether the work was delivered, but whether the engagement was structured lawfully and whether the records exist to prove it.

The obligations below are not optional and they do not scale down for small headcounts. They apply from the first employee.

Recurring statutory filings

Thresholds, rates and applicability differ by state, by wage level and by establishment size, and they change. Treat this as a map of what exists, not as tax advice — confirm the current position for your circumstances with a qualified adviser.

The obligations that are not filings

Filings are the visible part. The administrative work around them is what consumes time:

• Written employment contracts stating scope, rate, notice period and terms before the start date
• Background and document verification before onboarding
• Payroll processing and disbursement on a fixed, committed date
• Leave, attendance and timesheet administration
• Statutory registers maintained so they can be produced without preparation
• Contract renewals, exit formalities and full and final settlement

What an employer of record changes

Under an employer of record arrangement, the professional works to your direction, on your systems, to your priorities — but is legally employed by the EOR. Every item above becomes the EOR's responsibility. You approve a timesheet and receive one invoice.

Three situations make this worth considering:

• Regularising informal engagements. Moving invoice-only contractors onto a compliant payroll removes exposure without disrupting the work.
• No local entity. Foreign organisations can engage people in India without incorporating, where setting up an entity for a handful of roles is disproportionate.
• Vendor consolidation. A contingent workforce spread across several suppliers, on different terms, becomes one contract and one consistent set of terms.

What it does not change

An EOR does not take on your scope, your architecture or your delivery outcomes. It is an employment arrangement, not a delivery one. If a supplier offers to carry both the employment and the outcome, you are looking at project outsourcing, which is a different commercial and risk structure — and should be priced and contracted as such.

Questions worth asking any EOR

• On what date each month are salaries paid, and is that date contingent on our invoice settling?
• Can you produce filing evidence for the last four quarters on request?
• What is included in the quoted rate, and what is billed separately?
• Who is the named contact if something goes wrong on an assignment?
• What happens, contractually, if a deployed professional resigns?

The answers are more informative than any capability deck. A supplier who pays late, or who cannot produce filing evidence quickly, is carrying risk that will eventually become yours.