Hiring in India: Complete Guide 2027

India does not have a formal IR35-equivalent, but the labor courts apply a multi-factor employment test — and sustained contractor engagements without clear commercial independence are routinely reclassified. India's four Labour Codes (wages, industrial relations, social security, and occupational safety) came into force nationwide on 21 November 2025, consolidating 29 central laws. Wages must be at least 50% of total remuneration for PF and gratuity purposes, fixed-term employees earn gratuity after one year, and states are still notifying implementing rules through 2026–27, so a transitional compliance environment persists. An EOR employs workers directly under compliant contracts, ensures all statutory benefits are provided from day one, and manages the gratuity liability that accrues after five years (one year for fixed-term employees under the Code on Social Security) — a significant balance sheet item for longer-term hires.

Figures checked against official sources: Ministry of Labour and Employment (four Labour Codes, compliance handbook 2026); Employees' Provident Fund Organisation; Employees' State Insurance Corporation; Ministry of Finance (tax year 2026-27 rates); Income Tax Department (Form 130); Legislative Department (Constitution, Art. 343). Checked November 2026.