Starting the employee onboarding process in India can be tough for global companies due to cultural differences and complex laws. Managing a global workforce is a challenge worth experiencing. Employer of Record (EOR) services, like Wisemonk, make hiring and onboarding employees in India easier. EOR Partners can guarantee 100% compliance. This article will discuss how EOR services can help international businesses smoothly onboard new Indian employees, making the process simpler and more successful.

Let's learn what Employee Onboarding is and how does it work for Indian workers.

Employee Onboarding in India

Employee onboarding in India presents a unique set of challenges and opportunities for international companies. The process involves familiarizing new hires with organizational culture and expectations and navigating a complex regulatory environment that governs employment practices. This is where the strategic use of Employer of Record (EOR) services becomes invaluable.

EOR services like Wisemonk offer a comprehensive solution for companies looking to expand their team in India without the burden of establishing a local entity or grappling with intricate labor laws. Businesses can seamlessly onboard international employees, ensuring compliance with local employment laws, and providing competitive benefits packages to attract top talent.

Overcoming Employee Onboarding Challenges with EOR India

Onboarding employees in India can present specific hurdles for international employers. Here are some of the prevalent challenges encountered by our clients before they began utilizing Wisemonk's services:

Legal and Compliance Complexities

India's employment landscape is governed by a multitude of regulations, including gratuity payments, parental leave entitlements, and termination procedures.

Navigating these complexities for new employees can be daunting for foreign companies. 

Gratuity Payments 

In India, gratuity is a benefit given to employees after five years of service. EORs handle compliance, calculate amounts, and manage payments to avoid legal issues.

Parental Leave

Indian laws govern maternity and paternity leave, which can be complex. EORs assist by ensuring compliance, managing leave requests, and guaranteeing employees receive their entitled benefits.

Termination Procedures

Ending employment in India requires following specific laws. EORs guide through the termination process, notice periods, settlements, and due process, to avoid legal disputes and maintain positive relationships.

Employer of Record services reduce this load by resolving legal issues and assuring compliance with local labor regulations. They have competence in deciphering legislation, ensuring efficient onboarding processes, and mitigating legal concerns.

Tax Obligations

Understanding tax obligations is crucial for both employees and corporations operating in India. From income tax deductions to corporate tax filings, compliance is essential to avoid penalties and maintain good standing with tax authorities. EOR services take care of these complexities by managing payroll taxes, ensuring accurate withholdings, and filing necessary tax returns. EORs relieve companies of this administrative burden by leveraging their expertise in tax compliance and acting as the local legal entity for Indian employees.

Simplified Processes and Compliance Assurance

The primary role of EOR services in employee onboarding is to simplify processes and ensure compliance for remote workers. EORs take responsibility for payroll management, benefits administration, and compliance with local regulations by acting as the legal employer of record. They streamline the entire process of onboarding, from contract management to setting up payroll systems, enabling companies to focus on integrating new hires into their teams without worrying about legal or administrative hurdles.

The Onboarding Process

From the moment the EOR agreement is signed to the integration of new hires into their roles and beyond, a systematic process is followed for onboarding employees. Here's a streamlined plan tailored to ensure a seamless, efficient, and value-driven onboarding experience for Indian talent on behalf of an international employer.

The onboarding process involves several critical steps, from background verification to setting up payroll-related accounts. Each step has its designated responsible party—either your EOR partner or your company. 

Here's a detailed breakdown of these steps, highlighting the responsibilities and timelines involved.

Signing the EOR Agreement

Responsible: Employer and EOR

Timeline: Upon agreement

Details: The employer and the EOR sign the agreement, outlining the terms and responsibilities for onboarding the new employee.

Background Verification

Responsible: EOR

Timeline: 1-2 weeks

Details: This initial step is crucial for ensuring the reliability and compliance of the Indian employees. Your EOR partner leverages local expertise to perform thorough background checks, aligning with India's employment regulations. The EOR conducts comprehensive background checks on Indian employees to ensure compliance with local laws and regulations. This step is crucial for verifying the reliability and integrity of the new employee. Wisemonk conducts a special in-person background check for Indian Workers to ensure 100% compliance with Indian employment regulations.

Offer Letter Release

Responsible: EOR (or EOR/Client)

Timeline: Immediate

Details: The Offer Letter is issued by both the EOR Provider and the client for the new employees. Typically, the EOR can release a written employment contract on behalf of your company to streamline the process.

The EOR releases offer letters to the new hire on behalf of the employer, ensuring that all legal and regulatory requirements are met. This helps streamline the onboarding process and provides clarity to the candidates.

Document Collection

Responsible: EOR

Timeline: 1 week

Details: Collecting the necessary documentation is vital for compliance with employment laws. Your EOR partner's knowledge of local labor laws simplifies this otherwise complex task. The EOR collects all necessary documentation from the new hire for employment, visas, and permits. This includes verifying identity proofs, educational certificates, and any other required documents.

Introductory Meetings

Responsible: Employer

Timeline: Within the 1st week

Details: The client conducts introductory meetings with the new hires to welcome them to the company and integrate them into the company culture. These meetings help set expectations, build connections, and play a major role in employee retention. This will ensure that the employee's experience is good and will lead to eventual employee satisfaction.

Setting Up Payroll Accounts

Responsible: Wisemonk

Timeline: 2-3 weeks

Details: The EOR takes charge of setting up all necessary accounts for payroll processing. They are also responsible for setting up all mandatory employee benefits including Provident Fund (PF), health insurance, Employee State Insurance (ESI), and other benefits like the Employee Pension Scheme, etc., ensuring adherence to India's labor laws and tax regulations.

Onboarding Indian workers as an international employer is a crucial process. Most businesses emphasize the importance of documentation like written employment contracts, orientations with the new hire's manager, a round-up of the employee handbook, an introduction to the onboarding software, etc., for an effective onboarding experience. As your EOR Partner, Wisemonk also familiarizes the company's employees with employee compensation, social security contributions, deposit-linked insurance, and other such aspects of the payroll as a part of the onboarding program.

‍

Choosing the Right EOR Partner in India

Selecting the ideal Employer of Record (EOR) partner in India is critical for seamless operations and compliance. You  must consider these key criteria when evaluating potential partners:

Compliance Record

You must ensure the EOR has a strong track record of compliance with Indian labor laws and regulations.

Services Scope

You can evaluate the range of services offered by the EOR, including payroll management, HR administration, and legal support. You must choose a partner whose service offerings align with your specific needs and requirements. All the required administrative tasks like new hire paperwork, setting up a benefits package, paying employees, etc., should be fulfilled by the EOR Partner. 

Pricing

Make sure you understand the EOR's pricing and fees to avoid surprises. Compare the costs with the services you get to see if it's worth it. Know all the expenses upfront to avoid unexpected charges later.

Technology Capabilities

Consider your EOR's technology setup, like payroll software and employee management systems. A modern system can make processes smoother and improve efficiency. With Wisemonk, you get a personalized dashboard to keep track of all your employees.

Client Base

Assess the EOR's client portfolio and industry experience to gauge their expertise and suitability for your business. Look for testimonials or case studies that showcase successful partnerships.

In addition to these considerations, choose EORs that provide transparency, specialized account management, and continuous compliance services. Clear communication and devoted assistance promote smooth cooperation and assist in addressing any issues that may occur, ultimately contributing to the success of your India growth initiatives.

Wisemonk: Your Trusted EOR Partner in India 

Wisemonk serves as the premier EOR partner for founders and leaders of small early-stage companies aiming to tap into the Indian market. Our tailored solutions are designed to streamline the employee onboarding process, ensuring a seamless transition for both employers and employees.

Frequently Asked Questions (FAQs)

Who is responsible for sending the employment contract/offer letter/employment agreement?

The offer letters are usually issued by both the client and the EOR. Then, the employment contracts are sent by the EOR Partner.

While paying the employees, the salary will be disbursed in Indian Rupees?

Typically, the international employer will disburse the salary in their preferred currency in the EOR Partner's account. From here, it becomes the responsibility of the EOR Partner to process the employee's salary in Indian Rupees in their account.

How are leaves determined in the case of an international employee in India?

Foreign employers can adjust some of the leaves as per their calendar. As per the Indian employment regulations, it is mandatory to observe a minimum number of public holidays. Apart from this, the minimum number of paid leaves and sick leaves must also be given. As per the Maternity Benefit Act, female employees are entitled to paid maternity leave.

How long should onboarding process take?

The entire onboarding process can take anywhere between 1 week to 1 month, depending upon how fast the background checks and compliance are done. Remote workers also require equipment to suit their custom job requirements. For an efficient onboarding experience, the client should ensure that all these requirements are met during the onboarding period. Wisemonk has recorded a swift 2-day onboarding process for some of its clients from the US and Canada.

These are our usual timelines:

EOR Contracting: 1-3 days
Employee Documentation: 1-2 days
Verification Post Joining: 3-5 days

How can I avoid a poor onboarding experience?

A subpar onboarding experience lacks a system and fails to introduce the organizational culture to the full-time employees. You can avoid this by ensuring the new employee gets time to become acquainted with the organization. HR Professionals must familiarize the full-time employees with all the organizational procedures. The job must match the job description on the employment contracts, the salary must reach on time and there must be scope for employee engagement.

‍