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Key Takeaways:
- Two offer letters need to be sent: the first is from the company to secure the candidate, and the second is from the Employer of Record (EOR) partner for formal onboarding.
- The EOR partner acts as the legal employer in India, handling compliance, payroll, and other administrative tasks on behalf of the client company.
- The initial offer letter is a formal intent and not legally binding. The employment letter, provided by the EOR partner, holds legal value and formalizes the employment terms.
Lisa, a seasoned HR professional at a growing tech company in the U.S., has just finished a video interview with Raj, a brilliant software developer based in Bangalore. Excited about bringing Raj on board, she’s ready to send him an job offer letter but soon finds herself entangled in a web of questions. Who should send the job offer letter—the company or their India-based Employer of Record (EOR) partner? And how should she present Raj’s salary, ensuring it reflects the total cost to company (CTC) without causing any confusion?
Navigating these nuances can be tricky, especially for companies new to hiring remote talent in India. To help ease this process, we’ve crafted a step-by-step guide that will walk you through creating and sending offer letters with CTC for your remote employees in India. From clarifying responsibilities to breaking down salary components, this guide will ensure you’re well-prepared to make your new hires feel valued and informed from the get-go.
Job Offer Letter & Onboarding Flow for a Remote EOR Employee
The client company (the overseas company that wants to hire the remote employee in India) works with the Employer of Record (EOR) service provider to identify potential candidates. The client company then directly conducts interviews and selects the candidate they want to hire.
Once a candidate is selected, the client company sends the first offer letter to secure the candidate from applying to other opportunities before the Employer of Record (EOR) partner can onboard them. Following this, the EOR service provider sends out the second offer letter on behalf of the client company:
- First Offer Letter - This initial letter, sent by the client company, states the intent to hire the candidate and outlines key terms like position, compensation, benefits, and expected start date. The candidate needs to sign and return this letter to accept the job offer.
- Second Offer Letter - After the first offer letter is accepted, the EOR provider sends another offer letter that reiterates the job details and serves as a precursor to the formal employment contract.
- Employment Letter - After the second offer is accepted, the EOR provider prepares a more detailed employment agreement. This includes all the terms and conditions of employment and specifies the project/work the employee will be doing for the client company. It is signed between the EOR provider and the employee.
In a remote Employer of Record (EOR) setup, the EOR is the official employer of record for tax and compliance purposes, while the client company manages the employee's day-to-day work. However, the job offer letter and employment contract make it clear the employee is specifically hired for and will be working on the client company's projects.
After the paperwork is completed, the EOR provider initiates the onboarding process, which typically involves:
- Completing new hire forms and documentation
- Setting up payroll and benefits
- Providing necessary equipment like a laptop, software access, etc.
The Employer of Record (EOR) service provider sends the official job offer letter and employment contract as the employer of record. But it is done in partnership with the client company, who remains very involved in selecting, onboarding and managing their remote EOR hires.
Offer letter vs Employment Letter in India:
The main differences between an job offer letter and an employment/ appointment letter in India are:
So in essence, the job offer letter is the initial job proposal with basic terms, while the employment letter is the final, legally binding contract detailing all aspects of employment. The candidate can negotiate terms after the offer letter, but the employment letter is usually final once signed by both parties.
When an job offer letter must be given?
An job offer letter should be issued once a company has selected a candidate for a position. Typically, the candidate is expected to join the company within 1-90 days of receiving the offer. This timeframe allows both the employer and the new hire to complete any necessary preparations, such as finalizing notice periods at their current job and organizing relocation if needed.
What salary needs to be mentioned in an offer letter?
Mentioning salary details in an job offer letter is crucial for transparency and setting clear expectations with the candidate. While not legally mandatory in India, including at least the annual CTC (Cost to Company) or broad compensation terms makes the offer more professional and complete. Key salary components to specify are monthly gross pay, basic salary, allowances like HRA, employer's contributions to PF and gratuity, and any variable pay or bonuses. The salary figure can be directly listed in the job offer letter body, shared as a detailed annexure, or conveyed by mentioning take-home pay and deductions. Some companies may only state the CTC without a breakup, verbally discuss salary, or include it later in the employment letter. However, the best practice is to provide a salary breakup in the job offer letter itself or as an attachment. It helps avoid misunderstandings, makes the offer binding, and allows the employee to enforce the compensation commitment if needed.
Job Offer Letter Checklist for India
Other commonly included details:
- Job location
- Contact information
- Contingencies for background checks
- Personal data usage terms
- Health and safety policies
The job offer letter should comprehensively state all-important employment terms while allowing room for further discussion in the subsequent employment letter. A well-drafted offer letter sets expectations and builds a strong foundation for the employer-employee relationship.
Download Your Job Offer Letter Template for India
Click here to download the Job Offer Letter Template tailored for remote hiring in India.
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