Definition of an Employer of Record (EOR)
An Employer of Record (EOR) is an external entity that takes on the complete legal employer role for your workforce, assuming all associated responsibilities and duties on behalf of your business. The EOR manages various human resources functions, including the onboarding, compensation, and overall administration of your supported employees, while your company retains control over its daily operations.
What Does a Global Employer of Record Do?
A global employer of record enables businesses to lawfully employ individuals across international boundaries, eliminating the need to establish a local presence and mitigating the risk of breaching regional or state employment regulations. Consider a global EOR as your international human resources partner, well-versed in the intricate labor statutes and payroll guidelines of the various regions where your workforce is situated.
What Are the Functions of an Employer of Record?
In essence, an employer of record offers companies a lawful and efficient means of engaging talent within the global market, eliminating the need to establish a foreign entity or risk contravening local employment statutes.
The global EOR assumes responsibility for fulfilling legal and regulatory obligations related to immigration, employment, payroll, and benefits for your dispersed workforce. While the global EOR serves as the official, registered employer for the supported employee, you retain control over day-to-day management responsibilities, including matters such as compensation, job roles, projects, and performance evaluations.
Here are some of the services provided by a global EOR:
- Drafting and maintaining employment contracts that adhere to local compliance standards.
- Managing all aspects of payroll and tax withholdings.
- Timely payment of supported employees.
- Offering comprehensive and statutory benefit packages.
- Ensuring compliance with termination and offboarding procedures.
- Offering ongoing assistance and guidance on local labor laws and regulations.
Advantages of Partnering with an Employer of Record
Engaging with a global EOR partner provides numerous advantages for businesses. Given that most companies lack the resources and in-depth expertise required for legally compliant international hiring, an EOR enables you to recruit top talent from anywhere and provide support tailored to their local requirements. Additionally, a global EOR assists you in:
- Speedy Talent Onboarding
- Cost Savings Compared to Establishing Legal Entities
- Talent Retention and the Provision of Comprehensive Benefits
- Ensuring Compliance with Employment Agreements and Evolving Labor Regulations
- Receiving Ongoing Human Resources Support
