Worker-classification and misclassification risk for foreign companies in India.
Foreign companies frequently engage people in India as independent contractors or consultants to stay lean, but Indian law looks at the substance of the relationship, not the label on the agreement. Where the company controls how, when, and where the work is done, provides the tools, and integrates the person into its organisation, a court or authority can treat the contractor as an employee, which brings provident fund, gratuity, leave, notice, and other entitlements, together with back-contributions and penalties.
The Code on Social Security 2020 adds a further layer by recognising gig and platform workers as a distinct category with their own emerging social-security obligations, so the binary of employee versus contractor is no longer the whole picture. We assess each engagement against the control and integration tests, structure genuine contractor and consultancy relationships so they hold up, and where misclassification risk is real we design the correct employment or gig-worker arrangement and remediate exposure.
Testing each engagement against the control, integration, and economic-dependence factors Indian authorities apply.
Structuring genuine independent-contractor and consultancy relationships, including deliverable-based terms, so the classification holds.
Advising on the gig and platform-worker provisions of the Code on Social Security 2020 and the emerging contribution obligations.
Quantifying and remediating exposure where contractors should have been employees, including back-contributions and regularisation.
Drafting consultancy and contractor agreements with clean IP, confidentiality, and tax-withholding terms.
Setting up the correct withholding for contractor payments and distinguishing it from payroll withholding.
Only if the relationship is genuinely one of independent contracting. If the company controls the manner of work, supplies tools, and integrates the person into its operations, Indian authorities can reclassify the contractor as an employee with full entitlements and back-contributions.
Liability for provident fund, gratuity, leave, notice, and other statutory entitlements, often with back-dated contributions, interest, and penalties. The exposure accumulates over the engagement, so it is cheaper to classify correctly from the start.
Yes. It recognises gig and platform workers as a distinct category with their own social-security framework, so some relationships that are neither classic employment nor classic contracting now carry specific obligations. The arrangement should be assessed against this framework, not just the old binary.
No. No engagement is treated as accepted until conflicts, scope and terms are confirmed in writing. An initial discussion is confidential and is used only to understand the matter and assess fit.
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