Employer of Record (EOR)

An employer of record or EOR is a company that has a network of entities around the world to compliantly employ and pay workers on behalf of clients.They provide client companies a way to quickly hire workers in new international markets without the cost and risk of establishing an entity in a foreign country.

Although they are similar, the key difference between an EOR and a PEO is the entity requirement and shared legal responsibility for employees.Traditionally, global PEOs are co-employment arrangements, meaning both the PEO and the client company must have a registered entity in the country where the employees are located—and both organizations share legal responsibility for employees.With an EOR, there is no shared legal responsibility for employees or entity requirement for client companies. An EOR, like GEO , is the preferred method for companies looking to onboard international employees quickly and compliantly.

1. Time and cost savings: The EOR provider handles all employment-related administrative tasks, saving the employer valuable time and resources.

2. Legal compliance: The EOR ensures full compliance with all labor regulations, providing legal security for the employer.

3.Flexibility: EOR allows companies to quickly and easily deploy employees to other countries or regions without the need to navigate local labor laws.

4. Savings on social contributions: In some cases, the EOR can negotiate better terms for social security contributions, leading to cost savings for the employer.

5. HR management: The EOR takes care of all HR management tasks, including payroll, social security, and tax matters, significantly reducing the employer's administrative burden.

A company can utilize an Employer of Record (EOR) when it:

1. Expanding internationally: If a company wants to hire employees in other countries without establishing a legal entity, an EOR ensures compliance with local labor laws and regulations.

2. Cost and time efficiency: An EOR can reduce costs and save time by managing employment-related processes such as payroll, taxes, and compliance, allowing the company to focus on core business activities.

3. Need for flexibility: If a company requires the ability to quickly hire or relocate employees in different countries, an EOR simplifies this process by managing local legal complexities.

4. Outsourcing HR functions: A company may use an EOR to outsource administrative tasks such as payroll, benefits, and tax filing, reducing internal workload.

5. Avoiding the need for local subsidiaries: Companies that want to operate in new markets without the expense and complexity of establishing local subsidiaries can use an EOR to hire staff directly.

Yes, an Employer of Record (EOR) can assist companies in complying with local labor laws. The EOR typically has extensive knowledge and experience in employment law and can help ensure that the company meets all necessary legal requirements.