Notice Periods for EOR Employees in India: What's Enforceable?

Every global founder hiring in India through an Employer of Record asks the same question before signing: what happens if we need to let someone go?

Notice periods sit right in the middle of both questions. And in an EOR setup, the answer is not what most people assume, because the rules that apply are not your company's HR policy.

This guide explains, in plain terms, how notice periods work for EOR employees in India. It covers what is actually enforceable under Indian law, and what it means for the employer and the employee alike.

Who's actually your employer? (the EOR setup in 60 seconds)

An Employer of Record (EOR) is a company that legally employs a worker in India on behalf of another company based abroad. Three parties are involved.

• The global company directs the day-to-day work, the projects, and the reviews.
• The EOR is the legal employer under Indian law. It holds the employment contract, runs payroll, and handles compliance.
• The employee works in India and is employed by the EOR.

This is the fact that decides everything about notice. Because the EOR is the legal employer, Indian employment law and the EOR's contract govern the exit, not the foreign company's internal rules.

Who sets the notice period?

The notice period comes from the EOR's employment contract, which is written to Indian law. A policy from the company's home country does not override it.

For the employer, this means that if you want someone to leave, the notice period in that Indian contract is what applies, not the two weeks you might be used to at home.

For the employee, it means your notice period is whatever your EOR contract states, within the limits Indian law sets. You get the same protection a directly employed Indian worker would.

What's actually enforceable in India

Two things stack up here: a legal floor, and the contract on top of it.

The legal floor depends on your category of employment.

• If you count as a worker, which now includes many supervisors earning up to Rs 18,000 a month under the new codes, the Industrial Relations Code protects you. A retrenchment generally needs about one month of notice, or pay in lieu of it, plus retrenchment compensation of 15 days of wages for each year of service.
• If you are in a managerial or senior role, your state Shops and Establishment Act usually sets the minimum, often around 30 days, and the rest is decided by your contract.

The contract then sits on top of that floor. In practice, Indian notice periods run 30 to 90 days, and 3 months is the standard in the IT industry.

All of this now sits under the four new labour codes, covering Wages, Industrial Relations, Social Security, and Occupational Safety, which came into force on 21 November 2025. A good EOR keeps your contracts current with these so you do not have to. For the general rules beyond the EOR context, see our guide to notice period rules for remote employees in India.

If you're the employer: how the EOR exit really works

A few things about EOR exits surprise global companies.

• You cannot terminate instantly. Give the EOR employee enough lead time to serve the notice period correctly.
• Skipping the notice still costs you. If you want an immediate exit and the law or contract requires notice, the EOR will charge you for that period, paid in lieu. Budget for it.
• Garden leave must be pre-drafted. Keeping someone employed but away from work during notice only works if it was written into the original contract. You cannot add it later.
• Your liability is defined. It is essentially the final settlement, passed through by the EOR, rather than open-ended exposure.

The practical rule is simple: tell your EOR service provider before you tell the employee anything. Confirm the required notice first, then set the exit date. Errors at this step are expensive to undo.

If you're the employee: what you're owed on the way out

Being employed through an EOR does not shrink your rights. The EOR is your legal employer, so Indian law protects you exactly as it would at any Indian company.

On exit, you should receive your notice period, or pay in lieu of it if the employer ends things sooner. On top of that comes a full and final settlement, which usually includes:

• Gratuity, if you qualify. This generally means five years of service, though fixed-term employees can now receive it on a pro-rata basis under the new code.
• Leave encashment for your unused paid leave.
• Your Employees' Provident Fund (EPF) balance.
• Any pending salary and dues, after Tax Deducted at Source (TDS).

If you are the one resigning, you serve the notice in your contract, or you may be able to buy it out, which we explain next.

PILON, garden leave, and buyout in plain words

• PILON (Payment in Lieu of Notice): instead of working through the notice period, one side pays the other for it, and the employment ends sooner.
• Garden leave: you stay employed and paid through the notice period, but you do not work, and your access to systems and clients is cut off. It applies only if the contract allows it.
• Buyout: an employee shortens their notice by paying the employer for the days they do not serve, often to start a new job faster. Whether it is allowed depends on the contract.

How Wisemonk EOR handles notice and final settlement

Wisemonk is the legal employer for your India hires, so it manages the entire exit under Indian law, on both sides of the table.

For the employer, you give notice of the exit, and Wisemonk confirms the correct notice period, serves it or arranges pay in lieu, and calculates the final settlement. Your liability stays limited to that pass-through, and you never have to set up an entity of your own.

For the employee, your notice, settlement, gratuity, leave encashment, and provident fund are all handled correctly and on time, the way Indian law requires.

The result is a clean, predictable exit with defined costs, rather than a scramble across a legal system you do not know. You can learn more about Wisemonk EOR.

Conclusion

Notice periods for EOR employees in India come down to a single idea. The EOR is the legal employer, so Indian law and the EOR contract decide what is enforceable, not a foreign HR policy.

For employers, that means lead time, a defined notice cost, and a clean pass-through of liability. For employees, it means the same protections as any Indian worker: your notice, your settlement, and your dues. A good EOR makes both sides of that straightforward.