Who Acts as the Employer of Record?
The Employer of Record, the official employer on paper, is the EOR service provider you choose to partner with. However, it's important to understand that your employees will continue to work for your organization just like any other full-time employee. The day-to-day management of your employees and the evaluation of their performance remain within your purview.
Before collaborating with EOR services, many businesses assume that an Employer of Record will be involved in their HR strategies and decision-making processes. However, this is not the case. While some EORs may offer additional services like HR consulting, the core function of an EOR is to assist in onboarding global employees.
Decisions such as hiring, termination, employee benefits, and compensation packages remain firmly in your hands.
In essence, an EOR serves as a means to streamline the process of onboarding international employees, while you retain full control over the selection and management of your workforce.
Saves Time
HR tasks, including onboarding new employees and processing payroll, demand continuous attention. Time-consuming activities like handling individual taxes, commissions, reimbursements, and employee benefits require meticulous attention to detail to avoid substantial penalties. By partnering with EOR companies, you gain access to dependable services that handle these tasks on your behalf. This enables you to save time and redirect your focus towards core strategies aimed at growing your business.
Maintains Accuracy
When you delegate essential responsibilities such as employee management, payroll processing, and other HR-related functions to EORs, you benefit from the expertise of a highly proficient organization. EORs possess the necessary experience and knowledge in this domain. Their well-established and proven processes enable them to deliver precise calculations for payroll and ensure compliance.
Up-To-Date Record-Keeping
The Employer of Record diligently maintains all confidential employee data. Often, they employ an efficient system staffed with dedicated personnel responsible for managing and updating your records.
Mitigated International Regulatory Risks
Managing international employees and payroll entails adhering to the legal requirements of each country of operation. EORs offer a key service in staying informed about the diverse labor laws and tax regulations in the countries where they have established legal entities. With professionals such as lawyers and accountants handling these responsibilities, EORs substantially reduce compliance risks for their clients.
