What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third-party organization that legally employs staff internationally on behalf of client companies. This arrangement simplifies the process of hiring full-time employees abroad by handling all employment-related responsibilities and ensuring compliance with local laws.

How Hiring Through an EOR Works

Establishment of Presence: The EOR either hires subcontractors or sets up local entities in countries worldwide. Partnerships: EORs collaborate with companies providing benefits and perks, expanding the benefits available to employees. Employee Handling: EORs manage various aspects of employment, including contracts, payroll, taxes, benefits, terminations, etc., on behalf of client companies. Client Oversight: Client companies manage their global workforce's day-to-day responsibilities and schedules, while the EOR handles administrative tasks.

Advantages of Hiring Through an EOR

Cost and Time Savings: Avoid setting up legal entities in multiple countries, saving time and resources. Compliance: Ensure compliance with local employment laws and regulations, avoiding penalties and fines. Access to Global Talent: Tap into a diverse talent pool worldwide, enhancing recruitment opportunities. Efficiency: Reduce manual HR tasks, allowing the HR department to focus on strategic initiatives. Data Security: Partnering with a reliable EOR enhances employee data security.

Choosing the Right EOR Solution

Look for an EOR solution that offers: Intuitive Platform: User-friendly platform with self-service options for seamless integration. Customization: Tailor-made solutions and access management features to fit specific needs. Support: In-house legal and payroll support, integrations with existing tools, and robust customer support.

EOR vs. PEO

EORs and Professional Employment Organizations (PEOs) both assist in hiring but differ in their approach. EORs serve as the sole legal employer, while PEOs offer co-employment services, sharing legal liabilities with the client. Additionally, PEOs operate locally and cannot facilitate international hires.

EOR vs. GEO

Global Employer of Record (GEO) is essentially synonymous with EOR. While EORs can employ locally, they assume the role of a global employer when facilitating international hires.

Hiring Independent Contractors

EORs primarily focus on compliant hiring of full-time employees, and hiring independent contractors typically does not require their involvement due to differing legal and tax obligations.