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Hiring in India
Background check in India
Classification of workers in India
Language requirements in India
Setting up payroll in India
Simplify global expansion with CXC
Hiring in India offers tremendous benefits for international companies looking to expand into new markets. India’s educational system, notably strong in IT and technical domains, produces a large pool of highly skilled professionals who are equipped to drive innovation and growth.
However, the process of hiring and managing a workforce across borders comes with its own set of challenges, from navigating local employment laws to establishing efficient payroll systems and ensuring full compliance with both local and international tax regulations. Understanding and adhering to the country-specific laws and regulations in India is crucial. These include labour laws, tax obligations, and employment standards, which can vary significantly from those in the U.S. or other countries.
Companies can bypass all these challenges by utilising the employer of record (EoR) solution for their global expansion efforts.
An Employer of Record (EoR) is a third-party service provider or organisation that acts as the legal employer for your employees in any country or region where your company does not maintain a local presence.
Partnering with a reliable EoR provider like CXC enables you to offload the HR and administrative aspects of international employment, such as payroll processing, tax handling, benefits administration, and ensuring regulatory compliance. Opting for an EoR solution not only mitigates risks but also presents a cost-effective alternative to the traditional entity setup process, which can be costly and time-consuming.
Choosing a trusted EoR service provider in India can make or break your international expansion strategy. It requires careful consideration of various factors to protect your business from legal and financial risks. Key considerations include evaluating the provider’s substantial track record, depth of expertise in global employment, and the extent of their global reach.
With CXC, you gain a partner with over 32 years of experience in the global employment space. Our dedicated team of experts is well-versed in the intricacies of local labour laws and regulations, ready to support your expansion with informed, compliant hiring practices.
To help with your international expansion journey, we’ve created this full guide to help you gain valuable insights on how to utilise EoR services in India, including some hiring best practices, employment policies in the country, and other factors you need to keep in mind to compliantly hire talent in India.
When hiring in India, there are several factors that international companies should consider ensuring a smooth and successful market entry, including:
While there is no specific legislation that governs employee background checks in India, certain legal frameworks critically influence how these checks must be conducted in order to ensure both compliance and ethical practice, including:
As a best practice, companies conducting employee background checks in India should:
In India, companies conduct background checks to ensure the authenticity of potential employees’ information and to mitigate risks. The process typically involves several key steps, including:
Criminal background check in India
In India, it is common to conduct criminal background checks, especially for positions that require high security or trust. This process is often part of a broader employee background verification process that companies conduct to assess the suitability of a candidate for a role.
A Police Clearance Certificate (PCC) is one of the documents that can be issued to Indian passport holders if they need proof of their criminal record status for employment, long-term visas, or immigration purposes. The PCC certifies that the individual has no criminal records within the duration specified by the authority issuing the certificate.
Moreover, employers can also utilise online platforms or portals that aggregate criminal record data.
To ensure compliance and due diligence, companies in India conduct pre-hire checks for foreign nationals working in the country. Typically, performing a basic immigration check is essential to verifying the legal right of a foreign national to work in India. Employers are required to ensure that the worker obtains either a Business Visa (‘B’ Visa) for short stays involving activities like training or business meetings, or an Employment Visa (‘E’ Visa) for longer durations of employment in India. This must be obtained before the foreign national can legally commence work. If the planned period of stay exceeds 180 days, the employee must register with the Foreigners Regional Registration Office (FRRO) or local Foreigners Registration Offices (FRO) within 14 days of their arrival.
In addition to verifying visa status, comprehensive employment and educational background checks are common too.
When hiring talent in India, there are various classifications of workers that you need to consider, such as:
In the India’s employment landscape, employees are primarily categorised into two groups: workmen and non-workmen.
These distinctions have significant legal implications. Workmen are protected under various labour laws that stipulate conditions regarding work hours, overtime compensation, and other workplace rights. On the other hand, employees in managerial or administrative roles may not face the same rigorous labour protections, yet they frequently benefit from increased flexibility and benefits linked to corporate policies.
In India, an independent contractor is distinguished from an employee by the nature of the contractual relationship that exists between the parties involved. Essentially, a ‘contract of service’ pertains to an employment relationship, while a ‘contract for service’ identifies an independent contractor scenario. The key factor that distinguishes an independent contractor is the lack of a “master and servant” relationship typical of employment, which denotes an absence of obligation to follow orders in the work execution beyond specific task directives.
Businesses must correctly classify workers as independent contractors or employees to avoid misclassification, which can result in legal complexities and financial obligations, including providing employee benefits typically offered for permanent staff.
Moreover, the rise of gig and platform workers is redefining traditional employment structures in India. Under the Social Security (SS) Code, gig workers are identified as individuals engaging in work arrangements outside the conventional employer-employee relationship, earning from such activities. Similarly, platform workers operate through online platforms to provide specific services or solutions, which are also outside of the traditional employment model. The SS code mandates that gig and platform workers be registered.
Agency workers or contract labour in India are common across all industries and services. They are typically individuals employed by an agency to work temporarily for a company or organisation. The term “agency workers” is not explicitly defined in the Indian labour laws, but they closely relate to contract labour, defined under the Contract Labour (Regulation and Abolition) Act, 1970, as workmen hired in or in connection with the work of an establishment through a contractor.
These workers are provided to a client company, and the agency handles the worker’s remuneration, taxes, and other administrative aspects. While the workers are on the client’s premises and under their supervision, they are not directly employed by the client company. The regulatory framework for such arrangements includes ensuring workers’ rights and the terms of employment, which are governed by this specific act, as well as various other labour regulations in India.
While there is no specific language requirement for hiring talent across the board, employment contracts should be drafted in a language understood by both contracting parties, which is typically English. This is common in settings involving multinational corporations or foreign businesses operating in India. This practice ensures clear communication and mutual understanding of contractual obligations and rights.
Given the diversity of languages spoken across the country, English often serves as a common language spoken in professional environments, particularly in sectors that deal with international clients or partners. However, depending on the nature of the job and the geographical location within India, additional language proficiency (such as Hindi or other regional languages) might be necessary or beneficial to facilitate effective communication with the workforce, customers, and stakeholders.
International companies looking to hire talent in India must establish a legal presence in the country before they can directly hire workers. These businesses have the option to operate as sole proprietorships, partnerships, or incorporated entities.
To enter India’s market, foreign companies typically launch subsidiary organisations, create joint ventures with Indian or international partners, or establish offices such as liaison, branch, or project offices with the Reserve Bank of India’s permission. It is also imperative that these companies institute a meticulous payroll system to manage withholdings and deductions accurately.
Compliance with India’s labour regulations—enacted by both central and state authorities—requires employers to complete tasks such as securing registrations, maintaining detailed employee records and registers, posting required notices, and submitting periodic returns. These documents must be readily available for review by governmental inspectors.
To streamline this process and encourage a more business-friendly climate, the local government has introduced integrated registration platforms and self-certification schemes. Additionally, efforts to consolidate record-keeping and introduce electronic filing of returns are underway, simplifying adherence to labour laws. These initiatives are part of a broader strategy to ensure that doing business in India is a smooth and efficient experience for all involved.
Managing payroll in-house can be overwhelming, especially when you lack the expertise and experience to deal with India’s labour laws and regulations. You can bypass all these challenges by partnering with a reliable EoR provider like CXC. An EoR service takes care all the HR and administrative tasks associated with international hiring, including managing payroll and meeting your tax obligations. This frees up the time of your team, allowing them to focus on other important aspects of your business.
As you expand your international workforce, we understand that navigating in country-specific labour laws and regulations can be overwhelming — requiring careful attention to maintain compliance and mitigate risks.
That is where CXC excels. With CXC, you can confidently find, hire, manage, and pay workers anywhere in the world, all while remaining fully compliant. By leveraging our Employer of Record (EoR) solution, you can bypass the complexities and expenses of setting up a legal entity, enabling you to focus on what truly matters: growing your business.
Since 21 November 2025, employers hiring in India must comply with four Labour Codes: The Code on Wages, 2019; Industrial Relations Code, 2020; Code on Social Security, 2020; and Occupational Safety, Health and Working Conditions Code, 2020. These Codes consolidate 29 previous central labour laws and form the core framework for employment compliance in India.
Employers must meet requirements covering appointment letters, minimum and timely payment of wages, working conditions, social security and workplace health and safety. The applicable obligations can vary based on factors such as establishment size, industry and employee category.
Businesses must also manage applicable payroll and social security obligations, including Employees’ Provident Fund (EPF) and Employees’ State Insurance (ESI) requirements where coverage applies. State-level employment rules may impose additional requirements based on where the employee works. These can include state Shops and Establishments requirements, professional tax, labour welfare fund contributions, working-time rules and local registration or record-keeping obligations.
Foreign nationals must also have the appropriate immigration and work authorisation before commencing employment. The proposed role, salary and visa documentation should be reviewed before a start date is confirmed.
Hiring an employee in India can take several weeks if a foreign company first needs to establish an Indian entity, complete employer registrations and set up local payroll. Using an EOR in India can reduce the employment setup significantly, with some providers able to complete onboarding more quickly once employee information and employment terms are complete.
For a company hiring through its own entity, the process includes incorporation where required, tax and employer registrations, payroll setup, employment documentation and statutory social-security registrations. The timeline can increase where the business is making its first Indian hire or needs additional state-level registrations.
With an Employer of Record in India, the employing infrastructure already exists. The EOR prepares the local employment contract, completes onboarding and sets up payroll and statutory benefits without requiring the overseas company to establish its own employing entity first.
For companies that need to hire employees in India quickly, this makes EOR particularly useful for market entry, urgent specialist hires and small initial teams. The actual onboarding period still depends on background checks, employee documentation, benefit enrolment and immigration requirements.
A foreign company generally needs an appropriate Indian employment structure to employ workers locally and operate Indian payroll. If it does not want to establish its own entity, it can use an Employer of Record in India to employ workers on its behalf.
Setting up your own entity means taking responsibility for incorporation, employer and tax registrations, payroll, statutory contributions, employment documentation and ongoing compliance under India’s Labour Codes and applicable state requirements. This can make sense for businesses building a substantial permanent operation in India, but it creates additional setup and administration before hiring begins.
An EOR in India provides an alternative. The EOR is the employee’s legal employer in India and manages the local employment contract, payroll, tax withholding, Provident Fund, ESI where applicable, statutory benefits and employment administration. The provider must also maintain the registrations, records and licences required for its employment model and operations.
Your company continues to direct the employee’s role, projects and day-to-day work. Employment changes, disciplinary action and termination should be coordinated with the EOR before they are implemented.
For businesses testing the Indian market or making their first hires, EOR services in India can provide a faster route to building a local workforce without establishing an entity first.
Using an EOR in India generally makes more sense when a company needs to hire quickly, is testing the Indian market, has a small local workforce or is managing employees across several countries. In these situations, establishing an entity can add cost and administration before the business knows whether a permanent Indian operation is necessary.
An Employer of Record in India is particularly useful in four situations:
An EOR in India already has the local employment infrastructure to manage contracts, payroll and statutory compliance. It can also coordinate benefits, employee queries and state-specific employment requirements through one local process.
Once Indian headcount becomes substantial and long term, establishing your own entity may become commercially more appropriate. The decision should consider headcount, hiring duration, local revenue activity, management presence, tax exposure and the level of operational control the business requires.
Employer of Record services in India are usually charged as a fixed monthly fee per employee or as a percentage of payroll. Pricing varies considerably depending on the provider, employee population, benefit package and level of support required.
The EOR fee is separate from the employee’s salary and statutory employer costs. Businesses should therefore budget for the employee’s compensation plus applicable Provident Fund, ESI, gratuity and other mandatory employment costs, alongside the EOR management fee.
When comparing EOR services in India, look at what the monthly price includes. Contract preparation, payroll, tax withholding, statutory filings, benefits administration, onboarding and employee support should be clearly identified, along with any separate charges for deposits, off-cycle payroll or termination.
For a small Indian workforce, an Employer of Record in India can be considerably simpler than funding entity incorporation, payroll infrastructure, local administration and ongoing compliance solely to employ a few people.
Companies choose an EOR provider in India to access local talent quickly while avoiding the time and administration required to establish and operate their own Indian employing entity. The EOR becomes the legal employer and manages the local employment requirements, while the company continues to direct the employee’s day-to-day work.
This is particularly valuable in India because employment compliance now sits under the four Labour Codes introduced on 21 November 2025, alongside state-level requirements. Employers must manage wages, appointment letters, social security, working conditions and other statutory obligations correctly from the beginning. The 2026 central rules and subsequent notifications add further implementation detail that payroll and HR processes must reflect.
An EOR in India brings these responsibilities together through one employment structure, covering contracts, payroll, tax withholding, Provident Fund, ESI where applicable, statutory benefits and employee administration.
For international HR teams, EOR services in India also remove the need to build local payroll and employment expertise internally for the first few hires.
This gives businesses a practical way to enter India, access talent and scale before deciding whether a permanent entity is commercially justified. A suitable provider should be able to explain its Indian employing structure, registrations, benefit administration and approach to state-specific compliance clearly.
Yes, a foreign company can engage independent contractors in India, but a contractor should not be used simply to avoid employing someone. If the working relationship functions like employment, the worker may be treated as an employee regardless of what the contract calls them.
The risk increases where the company controls how and when the individual works, the person is integrated into the business, works primarily for one company or is economically dependent on that relationship. A misclassification finding can expose the business to employment claims, unpaid statutory contributions, tax issues and other liabilities.
India’s Code on Social Security, 2020 also formally recognises gig and platform workers and provides a framework for social-security schemes, including contributions from qualifying aggregators. This recognition does not automatically convert every independent contractor into an employee or give every contractor the same benefits as an employee.
Companies should therefore assess the real working relationship before choosing contractor status. A genuine contractor should normally control how the services are delivered, assume commercial risk, invoice for defined services and remain operationally independent from the client.
Where the role is genuinely an employee position, using an Employer of Record in India provides a cleaner structure. The EOR employs the individual locally and manages payroll, statutory benefits and employment compliance, helping reduce worker-classification risk.
An Employer of Record in India manages Provident Fund (PF) and Employees’ State Insurance (ESI) registration, contributions and statutory filings for eligible employees as part of local payroll administration. These obligations now sit within the Code on Social Security, 2020 and its 2026 implementation framework.
Provident Fund provisions generally apply to establishments with 20 or more employees, while ESI generally applies to establishments with 10 or more persons. Under the Social Security Code, ESI can also apply to an establishment with even one employee where specified hazardous or life-threatening work is carried out. Coverage can also depend on government notifications, employee wages and the nature and location of the establishment, so headcount is not the only factor that should be checked.
When you hire through an EOR in India, the EOR determines the employee’s statutory coverage, calculates required deductions and employer contributions, processes them through payroll and completes the relevant filings.
Employees who are already EPF members may remain covered even where their wages later exceed the applicable wage threshold. International workers can also be subject to specific EPF rules unless a social-security agreement or another exemption applies. This is particularly useful for foreign employers unfamiliar with Indian social-security administration. Instead of establishing their own PF and ESI processes, businesses can rely on EOR services in India to manage these requirements as part of the employee’s local employment.
A foreign company hiring in India without its own compliant local structure or an Employer of Record can face employment, tax, social-security and foreign-exchange risks. One important area is the Foreign Exchange Management Act, 1999 (FEMA), which regulates foreign-exchange transactions and cross-border payments involving India.
FEMA breaches should not be treated as an administrative technicality. Under section 13, a contravention can attract a penalty of up to three times the amount involved where the amount can be quantified, or up to INR 200,000 where it cannot, with further penalties of up to INR 5,000 per day for continuing breaches.
Employers must also comply with the four Labour Codes effective since November 2025, including requirements covering wages, social security, employment documentation and working conditions.
Using an Employer of Record in India provides a recognised local employment structure for contracts, payroll and statutory compliance, helping international businesses avoid trying to employ Indian workers through an unsuitable overseas arrangement.
CXC provides Employer of Record services in India, helping international companies hire and employ Indian talent without establishing their own local entity. CXC manages compliant employment contracts, onboarding, payroll, tax withholding, Provident Fund, ESI where applicable, statutory benefits and ongoing employment administration.
Our local employment expertise helps businesses navigate India’s four Labour Codes, which have governed wages, industrial relations, social security and workplace conditions since 21 November 2025. This means employers can build their Indian workforce without having to create local HR, payroll and compliance infrastructure from the ground up.
Whether you need to hire employees in India for a new market entry, specialist role or growing local team, CXC combines local employment knowledge with more than 30 years of global workforce experience.
By partnering with CXC for EOR services in India, your teams can focus on managing people and growing the business while we manage the local employment, payroll and compliance administration behind your Indian workforce.
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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