Employer of Record (EOR)

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is an organization that legally employs people on behalf of another business, typically in a different jurisdiction where the hiring company does not have a local entity. This arrangement allows companies to hire employees globally without the complexity and cost of setting up legal entities in each country.

Key Functions and Responsibilities

The primary function of an EOR is to handle all legal, HR, and compliance aspects related to employment on behalf of the client company. This includes managing payroll, taxes, employee benefits, and ensuring compliance with local labor laws. The EOR assumes the legal responsibility for these employees, which includes dealing with employment contracts, onboarding, and termination procedures.

Strategic Benefits for Companies

Using an EOR allows companies to quickly enter new markets and scale their operations globally with reduced risk and lower administrative overhead. It simplifies the hiring process in foreign markets where navigating legal and regulatory frameworks can be challenging and time-consuming. Companies can focus on their core business activities while the EOR manages the complexities of international labor laws and payroll.

Employer of Record services provide significant advantages for businesses looking to expand globally or employ remote teams internationally. By outsourcing employment responsibilities to an EOR, companies can ensure that they remain compliant with local regulations while efficiently managing their international workforce.