How to onboard and manage teams hired via Employer of Record (EOR) in India
- Natia Gabarashvili
- Oct 6, 2025
- 10 min read
Table of contents:
Introduction: Why onboarding and management matter in India
Hire the wrong way in India, and you’ll find out fast, when your new developer messages on day three asking why their Provident Fund account isn’t active, or when a labor inspector questions why your contracts aren’t bilingual.
In a market as competitive as India’s, sloppy onboarding and weak HR management don’t just cause headaches; they drive away top talent and put you on the wrong side of compliance.
India isn’t a place where you can wing it. Each state has its own Shops & Establishments rules, payroll must include statutory benefits like PF, ESI, and gratuity, and employees expect health insurance and clear leave policies from day one.
Miss a step, and you’ll lose trust before your new hire has even cleared their probation.
That’s where an Employer of Record (EOR) changes the game.
Instead of juggling contracts, payroll registrations, benefits providers, and exit paperwork on your own, the EOR acts as the legal employer and manages everything from onboarding to offboarding. Your employees get a smooth start; you get compliance and peace of mind.
The onboarding process with an EOR in India
Onboarding in India isn’t just about getting a signature on an offer letter, it’s about making sure every legal, payroll, and benefits detail is locked in from the start. Employees expect contracts that reflect their rights, salaries paid on time with PF and ESI contributions visible, and benefits ready on day one. An Employer of Record (EOR) streamlines this entire process, taking a hiring timeline that normally stretches into months and cutting it down to just a few weeks.
Contracts That Hold Up in India
The first step in onboarding with an Employer of Record (EOR) is the employment contract. In India, contracts must go beyond just job titles and salaries, they need to reflect statutory benefits like Provident Fund (PF), Employee State Insurance (ESI), gratuity, and maternity leave. They’re often bilingual (English + local language) to stand up in state labor courts. An EOR drafts and issues these contracts so they’re airtight from day one.
Payroll Setup in INR
Next comes payroll. Employees are registered under the EOR’s existing accounts for PF and ESI. Salaries are processed in INR, with tax deducted at source (TDS) filed directly to Indian authorities. For the employee, it means their payslip looks and feels exactly like it would if they worked for a local Indian company, only you’re spared the backend compliance work.
Benefits enrollment
Indian employees expect more than a paycheck. An EOR ensures each new hire is enrolled in group health insurance, gratuity provisioning, and statutory leave entitlements. For higher-value hires, employers can also add voluntary perks like accident cover or meal vouchers, all managed through the EOR. This consistency builds trust and helps retention.
IT and equipment provisioning
Remote or hybrid employees in India typically need laptops, secure VPN access, and sometimes stipends for home office setups. A strong EOR manages equipment policies, clarifying ownership, return, and maintenance rules—so there’s no confusion when employees exit.
Timelines: Weeks, Not Months
The real advantage of EOR onboarding is speed. With entity setup, you’re looking at 3–6 months of registrations before you can legally issue an offer. With an EOR, employees can be fully onboarded in 2–3 weeks, contracts signed, payroll running, and benefits live.
In a country where top engineers accept offers within days, that speed is the difference between landing talent and losing them.
How to manage employees through an EOR in India
Onboarding is only half the job; keeping your team engaged, compliant, and supported over the long run is where the real challenge lies.
In India, employers are responsible for ongoing payroll filings, benefits administration, and exit documentation, all under strict labor regulations.
An Employer of Record (EOR) takes on this workload so you can focus on building the business instead of firefighting HR admin.
Payroll and tax filings
Every month, the EOR ensures salaries are processed in INR with the correct deductions:
Provident Fund (PF) contributions filed with the EPFO.
Employee State Insurance (ESI) contributions managed for eligible employees.
Tax Deducted at Source (TDS) payments submitted to the Income Tax Department. Miss a filing and penalties stack up fast, which is why companies lean on EORs for consistency.
Leave and attendance tracking
Each state’s Shops & Establishments Act sets rules for leave and working hours. An EOR maintains accurate attendance registers, tracks leave balances, and ensures employees get their entitled annual, sick, and maternity leave. This avoids disputes while giving employees clarity on their entitlements.
Benefits administration
From group health insurance to gratuity provisioning, benefits are a big part of employee expectations in India. An EOR enrolls and manages benefits on your behalf, ensuring every worker has statutory and optional coverage. That’s critical in competitive markets like Bengaluru, where talent retention hinges on perks as much as pay.
Performance management integration
While you oversee daily work and performance reviews, the EOR can integrate with your HR systems to reflect promotions, pay raises, or contract amendments. That way, your performance management decisions translate seamlessly into payroll and compliance updates.
Offboarding and exit compliance
Employee exits in India come with a strict checklist:
Full & final settlement of wages, unused leave, and gratuity.
Issuing a relieving letter and experience certificate—both legally required.
Closing out benefits and ensuring compliance with Shops & Establishments provisions. An EOR handles all of this, protecting your company from post-exit disputes.
Compliance & risk management under EOR in India
Managing a team in India isn’t just about salaries, it’s about surviving the legal maze. Every state has its own rules layered on top of national laws, and the penalties for missteps aren’t small. An Employer of Record (EOR) provider in India acts as your compliance shield, taking on the burden so you don’t end up on the wrong side of a labor inspector.
Labor law coverage
India’s compliance checklist is long and non-negotiable:
Shops & Establishments Acts: State-specific rules on working hours, leave entitlements, and recordkeeping.
Gratuity: Mandatory after five years of service, with provisioning required from the start.
Maternity Benefits: 26 weeks of paid leave under the Maternity Benefit Act, with additional protections for nursing mothers.
Professional Tax: Levied in states like Maharashtra and Karnataka, deducted and filed monthly.
An EOR handles all of this, drafting contracts, provisioning benefits, and filing returns on time. For employers, it means you stay compliant without needing an in-house legal team for each state.
Immigration for foreign hires
Hiring expats adds another layer of complexity. India requires Employment Visas, followed by FRRO (Foreigners Regional Registration Office) registration within 14 days of arrival if the stay exceeds 180 days. An EOR manages visa sponsorship, documentation, and renewals so foreign employees can work legally without delays.
Misclassification protection
One of the biggest risks for global companies is misclassifying employees as independent contractors. In India, this can lead to back pay claims, PF/ESI liabilities, and fines. An EOR ensures workers are classified correctly, with statutory contributions and benefits built into their contracts, eliminating the “sham contracting” risk that often trips up new entrants.
Employee experience with an EOR in India
Employee experience is the unsung hero of retention, especially in India’s competitive job market. Sure, salary matters, but in a place like Bengaluru, where top engineers are actively courted by multiple offers, the full package can make or break your hiring success. An Employer of Record (EOR) doesn’t just handle payroll; it ensures that employees feel supported from day one, with benefits, workspace, and insurance that directly impact retention.
Why benefits, workspace, and insurance matter for retention
India’s talent pool is vast, but it’s also hyper-competitive, especially in cities like Delhi, Mumbai, and Bengaluru. Top talent isn’t just looking for a paycheck; they want:
Comprehensive benefits (group health insurance, paid leave, gratuity, maternity leave).
Supportive workspaces that give them the tools they need to succeed.
Health and wellness coverage has become a baseline expectation in today’s job market.
Without these, employees will jump ship for offers that seem more complete, leaving your company with higher turnover rates and the constant headache of recruitment. An EOR streamlines the process, ensuring that employees are enrolled in statutory benefits and receive the perks they expect, seamlessly from day one.
Remote employee support: EORs go beyond payroll
With the rise of remote work, companies must adapt. Employees working remotely in India expect more than just a salary, they need:
Equipment stipends for laptops, monitors, and ergonomic desks to create a productive home office.
Coworking allowances to access professional spaces when working remotely.
An EOR provides these perks by managing policies around remote work setups, ensuring that employees are equipped with the right tools to do their jobs well. This level of support can make a huge difference in employee satisfaction, especially when you’re managing teams spread across different regions or states in India.
EOR vs payroll outsourcing: The employee experience gap
While payroll outsourcing ensures that employees are paid on time, it leaves a huge gap in the employee experience.
Payroll outsourcing vendors typically handle only salary processing and tax filings, meaning they don’t manage benefits, equipment, or leave entitlements. The result? A disjointed experience where employees feel like they're getting the bare minimum.
In contrast, an Employer of Record (EOR) delivers a full-service HR package. From benefits and insurance to equipment and leave management, the EOR creates a cohesive experience that builds trust and loyalty. Employees know they’re taken care of, and that’s why they stick around.
Use cases: Who should manage teams through an EOR?
An Employer of Record (EOR) in India isn’t a one-size-fits-all solution, it’s the best fit for companies in specific stages or situations. If you’re scaling quickly, testing the market, or need flexibility without the long timelines of entity setup, an EOR is your perfect partner. Here’s where EOR services really shine:
1. Startups scaling fast in India
Startups don’t have time to wait. They need to hire top talent fast, without getting bogged down in legal filings, state-specific labor laws, or opening a local entity.
Whether you're building a tech team in Bengaluru or setting up operations in Chennai, an EOR lets you scale quickly by managing compliance, payroll, and benefits without the overhead of entity setup.
For early-stage companies, the goal is speed to market, and an EOR gives you the flexibility to hire in weeks, not months. You’re free to focus on business development, product, and customer acquisition, while the EOR handles the heavy lifting of legal, HR, and administrative tasks.
2. Enterprises needing distributed teams across multiple states
India is a vast country, and hiring across different states means navigating a web of state-specific laws from Shops & Establishments rules to labor regulations. Setting up a local entity in every state is not only costly but time-consuming.
An EOR solves this problem by acting as your employer in every state, making multi-state hiring seamless. Whether you’re onboarding employees in Mumbai, Delhi, or Pune, the EOR handles all the complexities of compliance, benefits, and payroll across regions, while you manage operations from anywhere.
3. Businesses testing indian talent pool before entity setup
Not sure if India is the right market for your company? Test the waters with an EOR before making any big commitments. Hiring employees through an EOR allows you to dip your toes in the Indian market without needing to set up a permanent entity. It’s the perfect solution for market testing, pilot projects, or proof-of-concept teams.
If you want to validate the potential of the Indian talent pool, start with an EOR. You can hire and scale quickly, and if things go well, you can move to setting up a local entity later.
Risks of poor onboarding and management without EOR
Onboarding in India isn’t just a formality, it’s a legal requirement. Fail to do it right, and you could find your company tangled in lawsuits, fines, or worse: high employee turnover. Without an Employer of Record (EOR) managing your HR compliance, the risks multiply. Here’s how:
Misfiled Contracts = Lawsuits
Indian labor law requires airtight contracts that outline everything from salary to statutory benefits. Without these in place, you risk misclassifying employees (leading to fines or legal action) or missing key provisions like maternity leave or gratuity. Even something as small as contract discrepancies can escalate into costly lawsuits.
If your contracts aren’t ironclad, employees can challenge terms in labor courts, leading to costly settlements and reputational damage. An EOR ensures that all contracts are drafted in line with local laws and compliant with both central and state-specific regulations.
Missed PF/ESI Filings = Fines
Every employee in India has the right to Provident Fund (PF) and Employee State Insurance (ESI) benefits, but these statutory contributions must be filed on time—or you face the consequences. Miss a filing, and you’re looking at fines and interest on unpaid amounts.
For example, missing the ESI filing deadline can lead to a ₹200/day fine, and the Provident Fund has strict deadlines for deposits, too. With an EOR handling this for you, compliance is automatic, reducing the risk of penalties and employee dissatisfaction.
Poor Benefits = Attrition
In India’s competitive job market, employees expect more than just a salary, they expect benefits. Things like health insurance, paid leave, and gratuity are not just nice-to-haves, they are statutory entitlements under Indian labor law. Without them, employee morale drops, and attrition skyrockets.
Employees are quick to jump ship if they feel their employer isn’t offering the benefits they’re legally entitled to. With an EOR managing employee benefits, you ensure that employees have access to health insurance, leave entitlements, and gratuity without the hassle. This leads to higher employee satisfaction and retention, and lower turnover.
The Bottom Line
Poor onboarding and HR management in India isn’t just a paperwork problem, it’s a legal and compliance issue. Without an EOR, you’re opening yourself up to legal risks, financial penalties, and employee churn.
Conclusion
Hiring in India comes with a long list of responsibilities from contracts and compliance to benefits and tax filings. Poor onboarding and management can lead to lawsuits, fines, and high attrition, all of which are avoidable with the right systems in place.
An Employer of Record (EOR) not only ensures full compliance with Indian labor laws but also streamlines HR processes, reduces risk, and improves employee experience.
With Team Up’s flat €199/employee/month fee, you can hire and scale in India quickly, with no surprises in terms of compliance or employee dissatisfaction.
Why spend months setting up an entity when you can hit the ground running with an EOR?
