How does an EOR work? 

The EOR provider will manage HR administrative responsibilities like payroll processing and compliance with local labor laws. Meanwhile, the client company will manage the day-to-day working relationship with overseas employees.

What are the benefits of working with an EOR?

Working with an employer of record can benefit small businesses by enabling them to hire more flexibly wherever their needs dictate and expand globally. Establishing an entity or subsidiary in another country requires significant time and investment. Businesses that only plan to hire one employee may find working with an EOR is a more cost-effective alternative. 

Employer of record vs. PEO 

A PEO involves a co-employment relationship, which allows the PEO to handle HR administrative tasks on behalf of their client. This includes handling payroll, tax reporting and filing, and workers’ compensation insurance. 

An employer of record (EOR) provider offers a solution for companies looking to hire talent in other countries easily. It differs from a PEO because the EOR will serve as the legal employer in another country on behalf of the client. Like a PEO, an EOR allows clients to hand off HR administrative tasks to save time and resources.

Employer of record vs. staffing agency 

An employer of record isn’t synonymous with a staffing agency. Staffing agencies primarily focus on sourcing, screening, and providing talent to clients. An employer of record typically doesn’t recruit the talent but facilitates the hiring process after a client has found a potential hire. Unlike a staffing agency, EORs specialize in understanding the nuances of compliance in foreign labor markets to ensure clients comply with local labor laws.