Local Employment in India

Wisemonk ensures full compliance with Indian labor laws, taking on all compliance risks associated with local employment. Our comprehensive services allow you to hire and manage local employees seamlessly, while we handle all regulatory and administrative tasks.

Wisemonk is a leader in Employer of Record (EOR) on G2
Wisemonk is a leader in Employer of Record (EOR) on G2
Wisemonk is a leader in Asia Employer of Record (EOR) on G2
Wisemonk is a leader in Employer of Record (EOR) on G2
Wisemonk is a leader in Employer of Record (EOR) on G2
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Offering Local Employment to Talent in India

India, with its vast pool of skilled professionals and cost-effective labor market, has become a prime destination for global businesses looking to expand their operations. Offering local employment in India not only helps businesses tap into this talent pool but also ensures compliance with local labor laws and regulations. However, one of the critical decisions businesses must make is determining whether to classify their workers as employees or contractors. This classification has significant implications for compliance, costs, and the overall management of the workforce. For a detailed discussion on this topic, refer to our comprehensive article on employee vs. contractor classification.

Employee vs. Contractor: Key Pros and Cons

To help businesses make an informed decision, we have summarized the key pros and cons of treating candidates as employees or contractors in the table below:

EOR Employee vs. Contractor

Benefits of Offering Employment

Lower Attrition

One of the primary benefits of offering employment is lower attrition rates. Employees with job security are more likely to stay with the company for a longer period, leading to better focus and performance. This stability is crucial for businesses looking to build a reliable and dedicated workforce.

Access to a Bigger and Better Talent Pool

Permanent employment is often more attractive to skilled professionals compared to contracting roles. By offering employment, businesses can access a larger and more qualified talent pool. This access can be a significant advantage in industries where specialized skills are in high demand.

Deciding to Offer Employment

Setting Up an Entity vs. Working with an EOR Provider

When deciding to offer employment in India, businesses have two primary options: setting up a local entity or working with an Employer of Record (EOR) provider like Wisemonk.

Setting Up an Entity vs. Working with an EOR Provider

Setting Up an Entity

Setting up a local entity involves establishing a legal presence in India, which includes registering the business, setting up local offices, and complying with all local labor laws and regulations. While this approach provides full control over operations, it can be time-consuming, costly, and complex, especially for businesses unfamiliar with the Indian regulatory environment.

Working with an EOR Provider

An EOR provider like Wisemonk simplifies the process by acting as the legal employer on behalf of the business. The EOR handles all employment-related tasks, including payroll management, compliance with local laws, and employee benefits administration. This approach allows businesses to focus on their core activities while ensuring compliance with Indian labor laws.

Benefits of Using an EOR Provider

  • Compliance Assurance: EOR providers ensure that all employment practices comply with local laws, reducing the risk of legal issues.
  • Cost-Effective: EOR services can be more cost-effective than setting up a local entity, especially for small and medium-sized enterprises.
  • Quick Market Entry: EOR providers facilitate faster market entry by handling all legal and administrative tasks.
  • Risk Mitigation: EOR providers assume the legal responsibility for compliance and employment-related risks, protecting the hiring company from potential liabilities.

Compliance Requirements for Employment in India

Local Payroll Compliances and Reporting

Ensuring accurate and timely payroll processing is crucial for compliance with Indian labor laws. This includes calculating salaries, deducting taxes, and making contributions to statutory benefits like the Employee Provident Fund (EPF) and Employee State Insurance (ESI).

State and National Government Filings

Businesses must comply with various state and national government filings, including labor law registrations, tax filings, and other statutory reports. These filings ensure that the business adheres to local regulations and avoids penalties.

Adherence to Indian Work Policies

Indian labor laws mandate specific policies on leaves, working hours, and employee rights. For example, employees are entitled to a certain number of paid leaves, maternity and paternity benefits, and regulated working hours. Adhering to these policies is essential for maintaining compliance and fostering a positive work environment.

Tax Calculations and Deposits

Accurate tax calculations and timely deposits to the government are critical for compliance. This includes deducting income tax at source (TDS) from employee salaries and depositing it with the government, as well as making contributions to statutory benefits.

Other Compliance Requirements

In addition to the above, businesses must comply with other legal and regulatory requirements, such as maintaining employee records, adhering to health and safety regulations, and ensuring non-discrimination in the workplace.


Offering local employment in India provides businesses with access to a vast talent pool and ensures compliance with local labor laws. However, navigating the complexities of employment regulations can be challenging. Partnering with an EOR provider like Wisemonk simplifies the process, allowing businesses to focus on their core activities while ensuring compliance and reducing risks. For more information and assistance, contact Wisemonk today.