As companies move customer support operations to overseas labor centers to benefit from lower wage costs, they also are able to reduce some of the employment liability risks they face in their U.S. operations.

However, experts caution that there are a variety of employment-related operational concerns-such as vastly different employment law systems-that companies must consider before moving or outsourcing service centers overseas.

Outsourcing telephone-based service centers to foreign countries is a growing trend among U.S. companies, particularly among e-commerce employers looking to reduce salary overhead.

Such offshore service centers are typically staffed with workers who answer toll-free telephone calls or respond to e-mail inquiries. They provide customers with technical support, help them fill purchase orders, return consumer goods or complete back-office functions online and over the phone.

Similarly, e-commerce companies and those in other industries rely on offshore centers to meet their software development and maintenance needs.

Countries with pools of well-educated, English-speaking workers, who typically earn significantly less than their U.S. counterparts, are favored locations for the centers.

Some are located in developed countries, such as Australia, Canada or Ireland. Many others are located in developing nations and even Third World countries.

Currently, India is the largest call center hub with modern infrastructure supporting the industry.

Labor costs in India are about one-eighth of what they are in the United States, according to a report on call centers conducted by Durham, N.C.-based Cutting Edge Information.

Lowering wage expense is the top reason most companies turn to the offshore call centers, said Elio Evangelista, senior analyst for Cutting Edge, a business research company.

Reducing the employment-related risks that companies face in the United States typically "is not really forefront in the call center frame of mind," Mr. Evangelista said.

Employers going overseas can, however, benefit from an absence of the employment liabilities that are present in the United States.

Many foreign countries do not yet have laws regarding employee complaints that get litigated in the United States, such as workplace discrimination, harassment or privacy. Additionally, complaints about workplace injuries have not surfaced among employees working in the call centers' white-collar professional environments, Mr. Evangelista said.

For companies that rely on overseas call centers, reducing wage expense "is the driving factor more than avoiding the labor risk, but I think that is a factor as well," added Tom Hams, director and employment practices liability insurance national products leader for Aon Risk Services in Chicago.

But companies need to weigh potential advantages and disadvantages, because they might encounter a different type of labor headache when turning to overseas call centers, said Gerald L. Maatman Jr., a partner with the law firm of Seyfarth Shaw in Chicago.

"If you are going to employ folks in India, get used to a much different, even radical, system of employment law than you are used to in the United States," Mr. Maatman said.

"At will" employment, which allows employers in the United States to easily terminate employees or lay them off, does not exist there, explained Mr. Maatman, who has clients that utilize offshore call centers.

Under a much more restrictive concept called "termination indemnity," employers must follow a lengthy notification process before letting Indian employees go, observers say. They must also indemnify employees for some of the wages they would have earned had they remained under their employment.

Failure to follow the appropriate process can result in fines for an employer operating in India, Mr. Maatman said. Additionally, employers cannot enter into contracts under which individual workers sign away such rights.

Similar employment laws restricting employers' ability to lay off workers exist in many foreign countries, said Mr. Hams of Aon.

The laws can make it very difficult for a company to quickly restructure or change its operation strategies, Mr. Maatman said. Even moving an employee to a new work site just down the street could have ramifications.

"The theory of, `I can make a decision on Friday and implement it on Monday,' which some employers are used to doing in the United States, doesn't hold overseas," Mr. Maatman said. "The ability to be nimble and move quickly from structure to structure is a much more difficult process, more risk-laden."

Companies can minimize that burden, though, by contracting out for call center services, said Kat Shenoy, president of Blue Bell, Pa.-based E-SoftSys L.L.C.

Mr. Shenoy's company has a business unit in India and provides offshore software development, support and maintenance for e-commerce, wireless and other companies.

Smaller e-commerce businesses often contract with companies specializing in providing call center services. But large U.S. hardware manufacturers and high-tech giants often operate their own offshore centers and even contract out their centers' services to other companies, said Mr. Shenoy.

Many of the call centers pay good wages by local standards and maintain good employee relations. That should minimize workers from ever wanting to lodge employment complaints, Mr. Shenoy said.

"They have every interest in keeping employees for a long time rather than having turnover," Mr. Shenoy said. "So many of these companies are doing what they can to keep their employees. They have a comfortable work environment."

The call centers that contract out their services have an additional incentive to maintain an environment fostering positive labor relations, Mr. said.

"They want to present a professional atmosphere, not only for the employees to work in but when the companies that contract out to them come to check out their operations they want to look like they run a tight ship," Cutting Edge's Mr. Evangelista said.

While work-related litigation is uncommon, a small number of legal complaints are filed against employers in India, Mr. Shenoy said. Typically, they allege mistreatment of workers or improper termination.

"But these are a minute fraction of what you see here," in the United States, he said.

Some day that could change, observers say. European countries are just now adopting workplace laws common in the United States, although workers and attorneys have not yet learned how to wield them, Aon's Mr. Hams noted.

Third World countries are even farther behind, he said.

"But we are in the first generation of outsourcing," so it could be a matter of time before employment-related legal claims arise, Mr. Maatman said. For example, some day foreign legal systems could be asked to determine whether outsource contractors or the employers that contract for their services are responsible for complaints from workers call centers.

"It's a situation where the law has yet to catch up with reality," Mr. Maatman said.