The compliance checklist for running a team in India without an entity

Hiring in India is straightforward when the right structures are in place and expensive when they are not. This checklist covers what a compliant employment setup needs, and shows which items an Employer of Record takes off your plate.

1. Employment classification

The most common mistake is paying full-time staff as contractors. Indian authorities look at control, exclusivity and duration, not the label on the invoice. Long-running "contractors" who work fixed hours for one company are employees, and misclassification exposes you to back-dated statutory contributions and penalties. Handled by the EOR: every Pod member is a full-time employee on a compliant contract.

2. Statutory benefits

• Employees' Provident Fund (EPF): mandatory retirement contributions from employer and employee.
• Employees' State Insurance (ESI): health insurance for employees under a wage threshold.
• Gratuity: a statutory payment after five years of service.
• Leave: earned, sick and casual leave under state rules, plus national holidays.
• Maternity benefit: 26 weeks paid leave.

Handled by the EOR: registration, monthly contributions and filings.

3. Tax withholding

Employers must deduct income tax at source (TDS) each month, issue Form 16 annually and file quarterly returns. Professional tax applies in several states. Handled by the EOR.

4. Labor registrations

Shops and Establishments registration in the relevant state, labor welfare fund contributions and, for larger teams, standing orders and works committee rules. Handled by the EOR.

5. Contracts and IP

Employment agreements should be governed by Indian law and include confidentiality, IP assignment and non-solicitation clauses that are enforceable locally. Assignment of IP to a foreign parent needs to be explicit. Handled by the EOR, with your company named as the beneficiary of all work product.

6. Data protection

India's Digital Personal Data Protection Act sets obligations for handling personal data, and your customers' own regimes (GDPR, HIPAA, SOC 2) follow the data to your India team. Practical controls: managed devices, single sign-on, least-privilege access and, for regulated workloads, dedicated secure workspace. Shared: we provide the controls, you define the policy.

7. Workspace and equipment

Remote, hybrid or dedicated office, each has different obligations around safety and equipment. Devices issued to employees should be asset-tracked and recoverable. Handled by the EOR on request.

8. Offboarding

Notice periods, final settlement within statutory timelines, gratuity if applicable, and return of assets and access. Handled by the EOR.

The short version

If you run a Pod with Growth Pods as your Employer of Record, items 1 through 5, 7 and 8 are ours. Item 6 is a joint effort where we implement the controls your policies require. You focus on the work; we keep the team compliant. Learn more about our Employer of Record service.