EOR Compliance Risk: What to Check Before Choosing a Provider in India
An Employer of Record lets you hire in India without a subsidiary, but the compliance risk does not disappear -- it moves to your contract. Here is what to check before you sign.
An Employer of Record lets a foreign company put people on the ground in India without registering a subsidiary. The commercial pitch is speed. The part that gets underwritten less carefully is compliance risk, and where it actually sits once you sign.
The EOR is the legal employer, but you are not off the hook
The EOR holds the employment contract, runs payroll, and remits statutory dues. That structure does not transfer away every risk. Indian labour and tax authorities can and do look through service arrangements when the facts suggest the client, not the EOR, controls the work -- direction, hours, tools, performance management.
What to verify before signing
- Statutory registrations are current, not just claimed. Ask for the EOR's own PF (EPFO), ESI, and professional tax registration numbers.
- Payslip and remittance evidence, not summaries. A credible EOR will show actual PF/ESI challans and TDS deposits.
The practical test
Before committing, ask the EOR for three things: a live PF/ESI registration certificate, a sample payslip with statutory deductions itemised, and a reference from an existing client who has been through a termination.