What Is Global Workforce Planning for SMEs?

It is the process of structuring international hiring to ensure compliance, cost control, and scalable growth.

Why Is Workforce Planning Critical When Hiring in Asia?

Because each country applies distinct labour, payroll, and tax rules that increase compliance risk.

How Does Eos Reduce Hiring Risk in ASEAN Markets?

By providing local HR, payroll, legal, and entity management expertise in each country.

Can Eos Support Hiring Without a Local Entity?

Yes. Eos offers EOR solutions across multiple Asian markets.

Does Eos Provide Regional or Country-Specific Support?

Both. Eos combines country-level expertise with a unified regional framework.

When Should SMEs Engage Eos for Workforce Planning?

Before making your first overseas hire or expanding into a new jurisdiction. Speak to our team to assess risk, confirm the right hiring model, and plan your Asia expansion with confidence.

What should companies prioritise when evaluating global payroll providers?

Compliance coverage, accountability, and scalability should take priority over software features alone.

Is payroll software enough for international expansion?

Payroll software supports calculations but does not replace local employment and compliance responsibility.

How does Eos help evaluate payroll providers?

With local presence across 27+ countries and partnerships like Hightekers, Eos combines legal expertise, automation, and cultural understanding to assess payroll risk and suitability.

Can Eos manage payroll across multiple regions?

Yes. Eos supports multi-country payroll delivery through a unified framework, reducing fragmentation and oversight gaps.

Does Eos support payroll for companies without local entities?

Yes. Through EOR-backed payroll, Eos enables compliant hiring without entity setup. Learn more about Eos's global PEO and EOR services.

Can Eos support payroll transitions as companies scale?

Yes. Eos supports entity setup, payroll migration, and long-term compliance planning as expansion matures. Speak with an Eos Global Expansion consultant today.

What is EOR-backed payroll for startups?

It is a payroll model where an Employer of Record legally employs staff abroad, handling payroll and compliance on behalf of the startup.

Is EOR-backed payroll suitable for early-stage companies?

Yes. It is commonly used by startups without local entities or internal payroll teams.

How does Eos support startups using EOR-backed payroll?

With local presence across 27+ countries and partnerships like Hightekers, Eos combines legal expertise, automation, and cultural understanding to support compliant growth.

Can startups hire across multiple countries using EOR-backed payroll?

Yes. Eos supports multi-country hiring through a single EOR framework, integrated with our Multi-Country Payroll & Accounting services.

Does Eos handle statutory payroll obligations?

Eos works with in-country specialists to manage statutory filings, reporting, and regulatory updates.

Can startups transition from EOR-backed payroll to local payroll later?

Yes. Eos supports entity setup and payroll migration as startups scale.

What is the difference between cross-border hiring and local hiring?

Cross-border hiring involves employment, payroll, and compliance requirements in the worker's country, rather than operating under a single domestic framework.

How can Eos support cross-border hiring without local entities?

Through Employer of Record models that enable compliant hiring without entity formation.

Which countries does Eos support for cross-border hiring?

Eos supports cross-border hiring across 27+ countries through local presence and partnerships such as Hightekers.

How does Eos manage payroll and employment compliance for cross-border teams?

Eos manages multi-country payroll and accounting by combining local legal expertise, automation, and cultural understanding to ensure compliance across jurisdictions.

When should businesses consider EOR models for cross-border hiring?

When speed, compliance certainty, or market testing are priorities during international expansion. Learn more about Eos's global EOR and PEO services.

What is the main difference between EOR payroll and self-managed global payroll?

EOR payroll transfers employment and payroll compliance to a local legal employer, while self-managed payroll keeps full responsibility with your company.

When should companies choose EOR payroll?

When speed to hire, compliance certainty, and flexibility are more important than long-term in-country infrastructure.

How does Eos deliver EOR payroll across multiple countries?

Eos delivers EOR payroll through local expertise and operational oversight, supported by partnerships such as Hightekers across 27+ countries.

How does Eos manage multi-country payroll reporting and compliance obligations?

Eos manages multi-country payroll and accounting by combining legal expertise, automation, and cultural understanding to support compliant payroll delivery.

Where can I learn more about Eos's EOR payroll and expansion support?

Speak with an Eos Global Expansion consultant for practical guidance, or learn more about Eos's global PEO and EOR services.

What is an Employer of Record in South Korea?

An Employer of Record in South Korea is a local company that becomes the legal employer of your staff, handling contracts, payroll, tax, social insurance, and compliance. You manage work, performance, and day-to-day direction; the EOR carries the legal employment risk.

When should we use EOR in South Korea instead of setting up a local entity?

EOR South Korea works best when: You are testing market demand or building an early team, You need to hire within weeks to support a project or client, Internal resources for payroll, HR, and compliance are limited, You want a bridge solution while entity setup is in progress. If you plan long-term, large-scale operations or need local licensing, an entity may be more appropriate. Eos plans the shift from EOR to entity so contracts, benefits, and tax treatment remain consistent.

How fast can we start hiring through Eos EOR services in South Korea?

Once we have agreed commercial terms and role details, hiring can normally begin within 1-2 weeks subject to: Completion of KYC and onboarding checks, Signed service agreement, Finalised package and contract terms for each hire. Immigration cases for expatriates may take longer depending on visa type and documentation.

How are payroll, tax, and social insurance handled for South Korea EOR employees?

Eos: Calculates gross-to-net pay including overtime, allowances, and bonuses, Withholds national income tax and local resident tax monthly and files with the National Tax Service, Registers and contributes to the four major social insurances on your behalf, Manages year-end tax adjustments, tax certificates, and payroll records. You receive a monthly payroll summary and one consolidated invoice for employer costs plus Eos's fee.

What are the main compliance risks when hiring in South Korea?

Key risk areas include: Mis-designed working time and overtime practices, Incorrect annual leave and holiday entitlements, Under-funded social insurance or late contributions, Poorly documented performance issues and dismissals, Wrongful dismissal claims due to lack of just cause and procedure. Eos focuses on prevention: correct contracts, compliant policies, clean payroll, and well-documented processes.

Can Eos support visas and work permits in South Korea?

Yes. Where permitted, we coordinate with immigration specialists to support appropriate work visa routes for expatriate hires, aligning job descriptions, salary levels, and documentation with visa requirements. We also manage the employment side (contract, payroll, social insurance) once the visa is approved.

How much do EOR service providers in South Korea typically cost?

Pricing usually reflects: Number and level of employees, Complexity of benefits (pensions, allowances, bonuses), Extra services such as recruitment support or immigration assistance. Eos provides clear cost breakdowns - base salary, employer on-costs, and our fee - so your finance team can model scenarios accurately.

What are the biggest compliance risks when hiring in ASEAN?

Incorrect payroll calculations, non-localised contracts, misclassification, and late tax filings are the most common issues. These lead to penalties, disputes, or licence exposure.

Do foreign companies need a local entity to hire in Malaysia, Indonesia, or Vietnam?

No. EOR allows you to hire legally without an entity. A local entity is only required for long-term operations or regulated sectors.

How does EOR reduce compliance risk?

The EOR becomes the legal employer, ensuring compliant contracts, payroll, tax filings, and statutory benefits while your company directs work.

What payroll rules differ the most across ASEAN?

Payroll frequency, overtime caps, social security contributions, and public holidays vary significantly between Malaysia, Indonesia, Vietnam, and the Philippines.

How can HR, finance, and legal teams maintain consistent compliance across multiple ASEAN countries?

Centralise governance but rely on local expertise or an EOR/PEO partner for country-specific execution. This prevents misalignment between global and local practices.

Can Eos support both EOR and future entity setup?

Yes. Eos supports EOR during early expansion and manages entity setup when your headcount grows.

What Is EOR Hiring and Why Is It Important in 2026?

EOR hiring is where a third party becomes the legal employer in a country while you manage day-to-day work. It is important in 2026 because it allows fast, compliant entry into new markets without the delay and cost of setting up entities.

Which ASEAN Country Should We Choose First for EOR Hiring?

It depends on your needs. Malaysia suits regional and professional roles, Vietnam and Indonesia are strong for tech and digital, and the Philippines excels in CX and shared services. Eos can review your role mix and suggest a phased entry plan.

How Does Eos Keep Our Company Compliant Across Multiple Countries?

Eos manages local contracts, payroll, tax withholding, and statutory benefits in each country. Our team monitors legal changes and updates documentation, so your HR and legal teams can focus on strategy and governance rather than local paperwork.

When Does It Make Sense To Move From EOR to Our Own Entity?

It makes sense when headcount, revenue, or regulatory requirements justify fixed local overhead. Eos helps you model break-even points and manages the transition so employees experience minimal disruption.

What Ongoing Support Does Eos Provide After Employees Are Onboarded?

We support you beyond contract signing, handling monthly payroll, statutory filings, contract updates, and day-to-day HR queries from both managers and employees. Your team also has direct access to senior Eos professionals for guidance on performance issues, policy changes, and future headcount planning in each country.

How Quickly Can We Start EOR Hiring With Eos?

Once terms and role details are agreed, Eos can usually onboard employees in one to two weeks in many ASEAN markets. You receive a clear timeline from contract issue to first payroll to plan start dates accurately. Speak with Eos Global Expansion specialist today

What Is An Employer Of Record (EOR), And How Does It Ensure Compliance?

An Employer of Record is a third party that becomes the legal employer of your staff in a country, while you direct their day-to-day work. A compliant EOR manages contracts, payroll, taxes, benefits, and statutory processes in line with local law, and keeps documentation ready for audits or disputes.

How Often Does Eos Recommend Reviewing EOR Compliance?

Eos recommends at least an annual review, with additional check-ins after major legal changes, acquisitions, or new market entries. Many clients integrate this checklist into their year-end audits and workforce planning cycles so HR, finance, and legal stay aligned.

Does Using An EOR Eliminate Permanent Establishment (PE) Risk Or Fines?

No. An EOR can reduce some risks, but it does not remove PE risk entirely. Tax and legal authorities look at the substance of your activities, so you still need advice on where decision-making, contracts, and revenue generation sit in your group.

How Does Eos Monitor Labour Law Changes And Evolving Regulations?

Eos combines in-country legal partners, specialist HR and payroll teams, and continuous monitoring of official guidance to track regulatory changes. We translate developments into clear actions for your contracts, payroll, and policies, and explain what they mean for cost and risk.

Labour Law Reforms in India: What the New Codes Mean for Global Employers

Table of Contents

Labour Law Reforms in India: What the New Codes Mean for Global Employers

India is on the cusp of the most sweeping labour law transformation in its history. For multinational firms operating or planning to enter the market, understanding this regulatory shift is not merely a legal task—it is a critical exercise in strategic HR planning and operational compliance.

The central government’s move to consolidate 29 archaic central labour laws into four comprehensive Labour Codes is intended to simplify compliance, enhance ease of doing business, and provide universal social security to the vast workforce. As we move towards the anticipated pan-India implementation in 2025, HR and legal professionals must grasp the practical impact on everything from wage structure and benefits to contracts and industrial relations.

Read our India guide

The Four Pillars of India’s Labour Code Overhaul

The four new Labour Codes, passed by Parliament between 2019 and 2020, represent a complete overhaul of the existing fragmented structure. They aim to unify, modernise, and rationalise the legal framework governing employment in India.

Code	Focus	Replaced Acts (Examples)	Key Goal
1. The Code on Wages, 2019 (CoW)	Wages, Bonus, and Equal Remuneration	Minimum Wages Act, 1948; Payment of Wages Act, 1936	Ensures a floor wage and timely payment for all workers, regardless of sector.
2. The Industrial Relations Code, 2020 (IRC)	Trade Unions, Conditions of Employment, Industrial Disputes	Industrial Disputes Act, 1947; Trade Unions Act, 1926	Streamlines processes for hiring, retrenchment, and dispute resolution.
3. The Code on Social Security, 2020 (CSS)	Provident Fund, Gratuity, Employee’s Insurance, Maternity Benefit	Employees’ Provident Funds and Miscellaneous Provisions Act, 1952; Employees’ State Insurance Act, 1948	Universalises social security benefits and extends coverage to the unorganised sector.
4. The Occupational Safety, Health and Working Conditions Code, 2020 (OSHWC)	Safety, Health, and Welfare of Workers	Factories Act, 1948; Contract Labour (Regulation and Abolition) Act, 1970	Standardises norms for working conditions, working hours, and workplace safety across all establishments.

The New Implementation Timeline: What Global Employers Need to Know

While the Codes have received Presidential assent, their actual enforcement depends on one major factor: state-level notification of rules.

Labour is a Concurrent List subject under the Constitution of India, meaning both the central government and the state governments must frame their respective rules. This dual-layer requirement is the primary reason for the delayed pan-India rollout. As of mid-2025, approximately 32 states and Union Territories have pre-published draft rules under one or more codes, signalling that the implementation phase is imminent. However, no date has been set yet.

For multinational firms, this staggered state-level process necessitates a highly granular approach to compliance.

The Anticipated Phased Rollout

To facilitate a smooth transition, especially for India’s large base of micro, small, and medium enterprises (MSMEs), the government is expected to adopt a phased implementation model:

Phase 1 (Immediate Compliance): Large enterprises (often those with over 500 employees) will be the first group required to comply upon the official notification date.
Phase 2 & 3 (Transition Period): Medium and small enterprises will follow, potentially receiving a transition window of up to two years to fully adopt the new regulations.

This structure means your organisation’s immediate compliance obligations may depend entirely on the scale of your existing Indian operations and the state in which your employees are based.

hire employees in India without a local entity — Photo by JK on Unsplash

Key Changes Impacting Wages, Benefits, and Contracts

The new Codes introduce structural shifts that directly impact payroll, workforce management, and cost of employment.

1. The Revamped Definition of ‘Wages’ (Code on Wages, 2019)

Perhaps the most impactful change for payroll is the introduction of a uniform, comprehensive definition of ‘Wages’. The CoW aims to prevent employers from artificially depressing basic pay to minimise mandatory social security contributions (like Provident Fund and Gratuity).

The 50% Rule: The non-statutory components of an employee’s remuneration (such as HRA, conveyance, and statutory bonuses) cannot exceed 50% of the total remuneration. If they do, the excess amount will be considered ‘Wages’ for the purpose of calculating social security contributions (PF, ESI, Gratuity).
The Financial Impact: This change will inevitably lead to an increase in the basic component of salary for many employees. While this boosts long-term employee benefits (higher PF corpus and gratuity pay-out), it can also lead to a reduction in the immediate ‘take-home’ salary and an increase in the employer’s contribution costs.

2. Flexibility in Working Hours and Overtime

The Occupational Safety, Health and Working Conditions Code (OSHWC) maintains the international standard of a 48-hour work week. However, it introduces flexibility that may appeal to certain global employers:

Extended Work Days: Subject to state government approval, the code allows for a four-day work week, provided the daily working hours are extended up to 12 hours (instead of the traditional 8-9 hours), ensuring the 48-hour weekly cap is maintained.
Mandatory Overtime: Overtime pay remains mandatory at a rate of at least twice the normal rate of wages. Crucially, the Code clarifies that any work between 15 and 30 minutes must be counted as a full 30 minutes of overtime.

3. Streamlining Industrial Relations

The Industrial Relations Code (IRC) introduces changes designed to enhance operational flexibility:

Higher Retrenchment Threshold: For industrial establishments, the need for prior government approval for retrenchment, lay-off, or closure has been raised from 100 to 300 workers. This provides larger firms with significantly more flexibility in workforce scaling.
Formalisation of Fixed-Term Employment (FTE): The Codes grant Fixed-Term Employees the same statutory benefits as their permanent counterparts, including gratuity, provided they are employed under an official contract. This provides foreign companies with a flexible hiring model that doesn’t trigger the same complex termination rules as permanent employment, without compromising worker benefits.

Expanding the Social Security Net: A Universal Approach

The Code on Social Security (CSS) is one of the most progressive elements of the reform, creating new compliance obligations for companies in the modern economy.

Inclusion of Gig and Platform Workers

For the first time in Indian law, the CSS formally defines and mandates social security coverage for Gig Workers (those earning outside a traditional employer-employee relationship) and Platform Workers (those working via digital platforms).

Mandatory Contributions: The law requires digital platforms that engage these workers to contribute a percentage of their annual turnover towards a Social Security Fund dedicated to gig and platform workers. The specific percentage is yet to be finalised in the rules but this mandates a new layer of compliance for tech-based global businesses.
Universal Coverage: The Codes also extend benefits like gratuity, life and disability insurance, and health coverage to a wider range of the workforce, including migrant and unorganised workers, significantly widening the scope of employer liability and responsibility.

Compliance Readiness: The Global Employer’s Strategy

For multinational firms, the implementation of the new Labour Codes presents a dual challenge: interpreting complex, interlinked central legislation and navigating the highly variable state-specific rules.

The State-Level Compliance Challenge

A company with employees in five different Indian states could potentially face five slightly different sets of compliance rules and definitions, particularly concerning working conditions, minimum wages (which must meet or exceed the national floor wage), and local inspections. This geographic fragmentation elevates the risk of non-compliance and makes centralised HR policy management exceptionally difficult.

The shift in the regulatory environment is designed to simplify enforcement, transforming the inspector’s role to an ‘Inspector-cum-Facilitator’. However, the sheer volume of changes—from updating payroll systems for the new ‘Wages’ definition to reviewing employment contracts for FTE provisions—demands immediate action.

The Strategic EOR Advantage

Successfully navigating this regulatory transition requires local expertise backed by guaranteed legal compliance. For foreign companies that lack an established legal entity in India or wish to maintain flexibility without the immense administrative and legal burden of direct state-by-state compliance, a strategic partner is essential.

Eos Global Expansion works as your legal Employer of Record (EOR) in India. By leveraging an in-country EOR solution, global firms can seamlessly manage their Indian workforce, offloading the entire legal liability for payroll, statutory contributions, tax withholding, and adherence to the new, complex, and constantly evolving state-level rules under the four Labour Codes. This ensures your workforce is hired and paid in full compliance from day one, mitigating risks associated with miscalculated wages or delayed social security contributions.

Conclusion and Call to Action

The Indian Labour Codes of 2019 and 2020 represent a monumental step towards a modern, unified employment landscape. While promising enhanced worker protection and ‘ease of doing business’ through simplified laws, the staggered, state-dependent implementation creates a period of significant complexity for global employers.

Proactive compliance is the only way to safeguard your operations and talent strategy in India. Trying to manually reconcile the Code on Wages’ new definitions with varied state-level social security rules can expose your company to undue financial and legal risks.

Stay ahead of these critical regulatory changes and ensure 100% compliance across all Indian states with a compliant EOR solution. Partner with Eos Global Expansion to transition your workforce seamlessly under the new Labour Codes.

Contact Eos Global Expansion now. Check our full-range of EOR services here or book a free consultation now.

Photo by Laurentiu Morariu on Unsplash

Author

Zofiya Acosta

Zofiya Acosta is a B2B copywriter with a rich background of 6 years as a professional writer. She has honed her craft in the dynamic writing field, beginning as an editor for a lifestyle publication in the Philippines, giving her a unique perspective on engaging diverse audiences.

Reviewer

Chris Alderson MBE

Chris Alderson is a seasoned CEO with over 25 years of experience, holding an honours degree from Durham University. As the founder and CEO of various multinational corporations across sectors such as Manufacturing, Research & Development, Engineering, Consulting, Professional Services, and Human Resources, Chris has established a significant presence in the industry. He has served as an advisor to the British, Irish, and Japanese governments, contributing his expertise to international trade missions, particularly focusing on global expansion and international relations. His distinguished service to the industry was recognised with an MBE (Member of the Order of the British Empire) awarded by Her Majesty Queen Elizabeth II.

Labour Law Reforms in India: What the New Codes Mean for Global Employers

Labour Law Reforms in India: What the New Codes Mean for Global Employers

The Four Pillars of India’s Labour Code Overhaul

The New Implementation Timeline: What Global Employers Need to Know

The Anticipated Phased Rollout

Key Changes Impacting Wages, Benefits, and Contracts

1. The Revamped Definition of ‘Wages’ (Code on Wages, 2019)

2. Flexibility in Working Hours and Overtime

3. Streamlining Industrial Relations

Expanding the Social Security Net: A Universal Approach

Inclusion of Gig and Platform Workers

Compliance Readiness: The Global Employer’s Strategy

The State-Level Compliance Challenge

The Strategic EOR Advantage

Conclusion and Call to Action

Author

Zofiya Acosta

Reviewer

Chris Alderson MBE

Share:

Categories:

Blogs, Trends & Insights

Tags:

india

Latest News

China Work Permit Salary Requirements Tightened for Category A and B in 2026

EOR Payroll vs Self-Managed Global Payroll: What’s the Difference?

What Is Cross-Border Hiring and How Does It Benefit Businesses?

Labour Law Reforms in India: What the New Codes Mean for Global Employers

Labour Law Reforms in India: What the New Codes Mean for Global Employers

The Four Pillars of India’s Labour Code Overhaul

The New Implementation Timeline: What Global Employers Need to Know

The Anticipated Phased Rollout

Key Changes Impacting Wages, Benefits, and Contracts

1. The Revamped Definition of ‘Wages’ (Code on Wages, 2019)

2. Flexibility in Working Hours and Overtime

3. Streamlining Industrial Relations

Expanding the Social Security Net: A Universal Approach

Inclusion of Gig and Platform Workers

Compliance Readiness: The Global Employer’s Strategy

The State-Level Compliance Challenge

The Strategic EOR Advantage

Conclusion and Call to Action

Author

Zofiya Acosta

Reviewer

Chris Alderson MBE

Share:

Categories:

Blogs, Trends & Insights

Tags:

india

Latest News

China Work Permit Salary Requirements Tightened for Category A and B in 2026

EOR Payroll vs Self-Managed Global Payroll: What’s the Difference?

What Is Cross-Border Hiring and How Does It Benefit Businesses?

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