Employee terminations in India follow a regulated, documentation-heavy process, and the EOR India is responsible for executing every legal step on behalf of your company. You decide the business reason for ending the employment, but the EOR conducts the offboarding in compliance with Indian labor laws. This includes notices, statutory payouts, final settlements, and mandatory recordkeeping.
From our experience supporting hundreds of US companies hiring in India, terminations are one of the areas where global teams face the highest compliance risk. India’s labor laws prioritize due process, timely payouts, and clear documentation. An EOR ensures every step is legally defensible, reducing the risk of disputes, penalties, or wrongful termination claims.
How EOR-Managed Terminations Work in India?[toc=How EOR Termination Works]
What the EOR handles (Legal Employer Responsibilities)
A trusted EOR partner like Wisemonk takes charge of every formal step required by Indian labor regulations, ensuring the exit process is compliant, documented, and defensible.
- Notice period compliance: The EOR ensures that the employee receives the correct notice period based on their contract, designation, and relevant state rules, typically 30–90 days, or manages payment in lieu of notice where applicable.
- Final settlement calculation and payout: The EOR calculates and disburses all dues accurately and on time, including unpaid wages, accrued leave encashment, bonus (if eligible), PF/ESI contributions, and any pending reimbursements.
- Severance and retrenchment compensation: For roles classified as “workmen” under the Industrial Disputes Act, the EOR processes mandatory severance (usually 15 days’ average pay per completed year of service) if the termination is due to redundancy.
- Gratuity (when applicable): Employees completing 5+ years of continuous service are entitled to gratuity; the EOR calculates and manages this per the Payment of Gratuity Act.
- Statutory compliance & documentation: The EOR issues the official termination letter, prepares experience certificates, completes statutory filings, maintains records, and ensures the process aligns with the Shops & Establishments Act, ID Act, state rules, and the employment contract.
- Exit administration & deregistration: The EOR manages asset recovery, systems deactivation, statutory deregistration, and any employer-mandated exit workflows.
What the client company handles (Operational Responsibilities)
Your company drives the business justification and performance context behind the termination while the EOR executes all legal formalities.
- Providing a valid reason: Since India doesn’t allow at-will termination, the client must share a documented, lawful reason, such as performance issues, misconduct, or genuine redundancy.
- Initiating the request: The client notifies the EOR in writing, specifying the termination date, context, and required documentation.
- Participating in communication: While the EOR issues the formal notice, many companies participate in the conversation to maintain a humane and transparent experience.
Legal Protections to Understand
Indian labor law strongly protects employees, giving them the right to contest dismissals in labor courts. This makes the EOR’s role especially important, they ensure every step is legally defensible, fully documented, and compliant with both central and state requirements.
How Wisemonk Helps?[toc=How Wisemonk Helps]
Wisemonk is an India-specialist Employer of Record helping global companies hire, manage, and compliantly offboard employees without opening a local entity. Our team handles payroll, statutory filings, benefits, equipment procurement, HR support, and full compliance management so your business can operate confidently in India. We ensure terminations follow every legal requirement and protect you from compliance risks.
Need help with your global expansion in India? Contact our team to learn how we can support your global operations.