What is an Employer of Record?An Employer of Record is just what the name suggests. It is the employer of your workers in India's record or legal framework. Employer of Record is a third-party organization that manages payrolls, HR duties, and benefits of your Indian employees. You hire employees according to the required job profile and keep them on the EOR’s payroll. You will have complete authority in all the day-to-day operations of the project. But the official employer in India will be the Employer of Record.
Why do you need an Employer of Record in India?When setting up a business in India, you need to form a legal entity. Failure to do so can cost heavy penalties. These legal entities can be of seven types:
- Public Limited Company
- Private Limited Company
- Joint-venture Company
- Partnership Firm
- Solo Proprietorship
- Branch Office
- Non-governmental Organizations (NGOs)
- Tax filings
- Statutory Compliance issues
- Culture Shocks
- Expenditure- Saving you the cost of setting up your legal entity.
- Tax Filing- As the legal employer in India, they file all your taxes.
- Statutory Compliance- They are acquainted with the laws and regulations of India. Hence, you will stay compliant.
- Culture Shocks- They will connect better with your employees as they understand the work culture and languages in India.
How does the Employer of Record work?An Employer of Record will perform the following duties:
- Onboarding- EOR will send out the offer letters, explain the company motto, and organize orientation programs for your employees.
- Payroll- EOR will process accurate payrolls of your employees after cutting appropriate taxes.
- Statutory Compliance- EOR is updated about any changes related to laws, worker unions, insurance, and working days.
- Termination- EOR will also take care of the termination of your employees and distribute the severance package and final settlement.
- Immigration- EOR will supervise the work visa process for transferred employees.