Management of Employer of Record

An Employer of Record (EOR) is a company that hires employees on behalf of other companies. The employment agreement is established between the EOR and the employee, while the actual employer enters into a contract with the EOR. The EOR invoices the employer for the employees' total salaries, along with a service fee.

EORs are primarily utilized for managing the employment of workers who reside in a different legal jurisdiction than their employer. Businesses looking to hire employees in foreign countries can engage a local EOR to avoid the costly process of establishing subsidiaries in each country where employees are located.

For instance, if a foreign company wishes to hire employees in Switzerland, they can enlist the services of a Swiss EOR. The EOR becomes the official employer of these workers within Switzerland, taking care of responsibilities such as withholding tax deductions, social security contributions, contributions to occupational pension funds, accident insurance, as well as managing paid vacation and sick leave entitlements for these employees. In its role as the registered employer in Switzerland, the EOR also assumes responsibility for ensuring legal and tax compliance in that country.

Conversely, the true employer is accountable for their core business activities but does not manage the administrative tasks related to employment.

Employers of Record can also be employed by companies aiming to deploy a team to a foreign nation. In such instances, the company might engage a local EOR in that particular country to serve as the employer for the team. In this scenario, the EOR would handle tasks like securing work permits for the team, along with providing other EOR-related services.