Employer of Record (EOR)

If you’re working as a contractor with a foreign employer, you might wonder: “Is there a way to have permanent employment instead of a contract arrangement?” The answer is yes—through an Employer of Record (EOR) service.

What is an Employer of Record?

An Employer of Record (EOR) is a third-party organization that legally employs you on behalf of a foreign company. Think of it as a bridge that enables international companies to hire you as a permanent employee without setting up a legal entity in India.

How It Works

Without EOR (Contract Work):

  • You work as an independent contractor
  • You handle your own taxes and compliance
  • You invoice the company monthly
  • No traditional employment benefits

With EOR (Permanent Employment):

  • The EOR company becomes your legal employer in India
  • You work for the foreign company day-to-day
  • The EOR handles payroll, taxes, PF, ESI, compliance
  • You receive traditional employment benefits
  • The foreign company pays the EOR, who pays you as an employee

In simple terms: The EOR takes care of all the legal, tax, and compliance complexities of employing you in India, allowing the foreign company to treat you as a permanent employee.

Why Companies Use EOR Services

International companies use EOR services when they want to:

  • Hire permanent employees in India without setting up an Indian entity
  • Avoid the cost and complexity of establishing a legal presence ($500K-$2M for a GCC)
  • Ensure compliance with Indian labor laws and tax regulations
  • Provide proper benefits to Indian employees (PF, ESI, insurance, etc.)
  • Simplify operations - Let experts handle local employment regulations

For the company, it’s a way to have a permanent team in India without the overhead of a local entity.

Why This Matters to You

Understanding EOR opens up negotiation possibilities you might not have considered.

During Initial Negotiations

When discussing employment terms with a potential employer, you can:

  • Ask if they work with an EOR - “Do you currently use an Employer of Record service for Indian employees?”
  • Inquire about future plans - “Would you consider using an EOR for permanent employment arrangements?”
  • Express your preference - “I’m open to either contract or permanent employment through an EOR”

Knowing about EOR gives you options and shows you understand global employment models.

After Working as a Contractor

If you’ve been working successfully as a contractor, you can:

  • Propose transitioning to EOR - “Have you considered using an EOR so I can be a permanent employee?”
  • Highlight mutual benefits - More stability for you, easier compliance for them
  • Suggest it as the relationship grows - Natural evolution as the partnership strengthens

Many companies are open to this if they’re not aware of the option or haven’t considered it yet.

Benefits of EOR Employment (For You)

If your employer agrees to use an EOR, you gain:

  • ✅ Permanent employment status instead of contract work
  • ✅ Statutory benefits (PF, ESI) handled automatically
  • ✅ Simplified taxes - TDS deducted at source like traditional employment
  • ✅ No invoicing or tax filing complexity
  • ✅ Job security and employment protections
  • ✅ Potential for additional benefits (insurance, leave, etc.)
  • ✅ Peace of mind - Compliance handled by experts

It combines the opportunity of global work with the structure of traditional employment.

Several reputable EOR companies operate in India:

  • Deel - Global EOR platform serving 150+ countries
  • Remote.com - Comprehensive global employment solutions
  • Oyster HR - International hiring and EOR services
  • Papaya Global - Payroll and EOR platform
  • Multiplier - Employment infrastructure for global teams
  • Velocity Global - International EOR and workforce solutions

These companies handle thousands of employees in India for international companies.

Disclaimer: This list is provided for informational purposes only. Elphe does not recommend, endorse, or have any affiliation with these services. Your employer will choose an EOR provider based on their needs and requirements.

When to Bring Up EOR

Good times to discuss EOR:

During offer negotiations:

  • If the company seems hesitant about contract work
  • If you prefer permanent employment
  • If they mention challenges with international hiring

After successful contract period:

  • Once you’ve proven your value (3-6 months in)
  • When discussing long-term commitment
  • During contract renewal conversations
  • When they’re hiring more Indian talent

Use your judgment on timing—the key is demonstrating you understand their needs while expressing your preference for permanent employment structure.

The Bottom Line

Employer of Record services are a real and viable option for converting contract work into permanent employment with foreign companies.

Key takeaways:

  1. EOR enables permanent employment without the company setting up in India
  2. It’s a legitimate, widely-used solution in the global employment market
  3. You can ask about it during negotiations or after proving your value
  4. It benefits both parties - structure for you, compliance for them
  5. Many companies are open to it if presented professionally

Don’t assume contract work is your only option. EOR opens the door to permanent employment while maintaining the opportunity to work with global companies.

If permanent employment is important to you, learning about EOR and knowing when to bring it up can change the nature of your relationship with foreign employers.

Remember: This is an option, not a requirement. Many professionals thrive in contract arrangements. But if you prefer the structure and benefits of permanent employment, EOR is the bridge that makes it possible with foreign companies.