Employer of Record

An Employer of Record (EOR) is a third-party company that legally employs your workers on your behalf. They handle all the administrative and legal responsibilities associated with being an employer, such as payroll, taxes, benefits, and compliance. This allows you to focus on your core business activities without the burden of HR complexities.

An EOR is your gateway to a global market of contingent talent. If you are already working with freelancers, contractors, gig workers, etc., an EOR is normally a lower cost and risk option compared to doing it yourself. Sometimes, firms are concerned about compliance risks, productivity and reliability. Statement of Work (SOW) contracts let you define clear deliverables for your project, moving away from the outdated method of simply paying by the hour. This ensures everyone’s on the same page and focused on achieving specific results.

• Reduces workload for HR, Payroll & Admin:  The Hackett Group’s 2023 Global Payroll Complexity Index found that for a multinational company, managing payroll across borders can increase complexity by 20-30%! An EOR takes on these complexities of the entire life-cycle of your contingent workforce, freeing up your internal teams.
• Brings access to gig talent:  The EOR model allows you to tap into the growing gig workforce without the complexities of independent contractor classification.
• Safeguards against compliance risk:  A 2022 study by the ADP Research Institute found that 22% of businesses surveyed were unsure of the worker classification status of some of their independent contractors. Misclassifying employees as independent contractors is a common mistake that can have significant consequences. EOR expertise in regulation complexities and labor law mitigate this risk.

When you use an EOR, you don’t directly employ your workers sourced through this route. Instead, your contingent workforce is employed and managed by the EOR. This makes choosing the right partner crucial. Consider their service capability, technology ecosystems, operating behaviors, leadership commitment, and culture.

An indirect relationship with workers is a double-edged sword. From a compliance risk perspective, an EOR is safer as employment liabilities rest with them. It also reduces administrative burdens for internal HR and compliance teams.

Businesses accustomed to direct hiring may find EORs daunting, but new technology and methods make it relatively seamless. Hiring managers retain control over their resources, while the EOR handles the complexities.

• Expertise: They specialize in navigating complex employment regulations like worker classification (independent contractor vs. employee). This minimizes the risk of misclassification penalties from agencies like the IRS (US) or HMRC (UK).
• Shifted Liability: As the legal employer, the EOR takes on the primary responsibility for ensuring compliance with payroll taxes, social security contributions, and other employment regulations. This reduces your potential liability for hefty fines or penalties.
• Streamlined Processes: EORs have established systems and processes for onboarding, payroll, and tax filings, ensuring accuracy and reducing the risk of errors that could lead to compliance issues.
• Regular Updates: They keep themselves updated on the latest regulations and ensure your workforce remains compliant with any changes.

Our pricing is flexible and depends on the number of countries and employees you need to manage. We offer customized quotes based on your specific needs. Please get in touch, we’ll be happy to help!