Lots of companies around the globe are trying to get into India to grab some of that talent. But, dealing with India’s legal system can be a headache, especially if you don’t have lawyers there.
Using an Employer of Record (EOR) can get a little messy legally, for both the company using them and the employee. An EOR is like the official boss, and they handle many responsibilities related to hiring. Here’s the summary on the key legal aspects you need to know:
Employer’s Legal Responsibilities
Compliance with labour laws
EORs generally follow Indian employment laws, like paying the right minimum wage, defining work schedules, and dealing with overtime. By being compliant, the EOR helps the company avoid legal trouble.
Reduce Risk
An EOR takes on a lot of the legal risks related to employee management—like lawsuits or facing discrimination claims. The company may still be responsible for some things, but the EOR substantially reduces of that risk.
Contractual obligations
The company signs a deal with the EOR that says the responsibility each side is supposed to do. It’s super important that the company reads this thing carefully and talks it over to make sure they’re protected and that the EOR does what they promised.
Intellectual Property Protection
If a company is working with an EOR, they need to keep their intellectual property secure. That means having employees sign papers that say they shall not reveal company secrets ((NDAs)and ensuring the EOR secures all information in a safe manner.
Legal Implications for the Employee
Relationship of Employment
If you’re working for an EOR, your boss is the EOR, not the company you’re actually working for. The EOR processes your payments, handles your benefits, and deals with all human resources tasks. But, the company usually tells you what to do every day.
Benefits and Rights of Employment
Workers hired through an EOR have the same rights as any other worker in India. That includes things like minimum wage, overtime pay, and time off. The EOR has to keep up with that stuff and make sure you’re getting your rightful earnings.
Getting Fired
If difficulties arise and you get fired, the EOR handles that and provides any required severance pay, as per the law. But, the company might have some say in it, depending on their agreement with the EOR.
Privacy of Data
Workers have the right to keep their personal info private. The EOR has to by stick to the rules when they save and use your data. Same goes for the company—they better keep your info safe and only use it when they need to.
Cutting Down on Legal Risks
To keep processes compliant and efficient, both the organization and the employee must:
- Carefully analyse the small print in the EOR service contract and hash it out.
- Be sure the EOR has a good track record of playing nice with the local laws.
- Stay in contact and team up with the EOR to resolve any issues at an early stage.
- Get a lawyer involved if needed to protect their rights.
