The practice of engaging contractors by employers is prevalent throughout India, similar to various other jurisdictions, for improving their overall competitiveness in the globalised market economy. Increasing labour cost and the need for flexibility in managing manpower to respond to market conditions and customers’ demands have caused employers to prefer contractors in a number of circumstances. However, the employment of contractors is subject to certain risks wherein such contractors may be reclassified and deemed to be direct employees of the employer in specific situations. This article provides an overview of the law governing the employment of contractors in India and the allied risks of reclassification of such contractors as direct employees.
Read the full article at L&E Global Knowledge Center.