Employer of Record (EOR)

An Employer of Record (EOR) is a third-party organization that legally employs workers on behalf of another company. This service is especially useful for businesses seeking to expand into new geographic regions or hire remote employees without establishing a local legal entity.

An EOR takes on all formal employment responsibilities, allowing the client company to manage the employee’s day-to-day activities without the legal complexities of direct employment.

Legal Employment and Onboarding

The EOR becomes the official employer of record in the eyes of the law and labor authorities.
It handles employment contracts in compliance with local labor laws.
Ensures that onboarding processes meet statutory requirements.

Payroll Management

Calculates wages, overtime, bonuses, and other compensation.
Manages statutory deductions like income tax, social security, and pension contributions.
Processes timely salary payments in the local currency.

Tax Filing and Statutory Compliance

Files necessary tax returns and employment reports on behalf of the employees.
Ensures adherence to local tax codes and labor regulations, including withholding and remitting taxes.
Stays current with changes in labor law to avoid penalties.

Employee Benefits Administration

Provides and manages statutory and optional employee benefits (e.g., health insurance, paid leave, retirement plans).
Facilitates access to local benefit programs in alignment with legal standards and market practices.

Labor Law Compliance and Risk Mitigation

Ensures that all employment practices comply with local laws, reducing the risk of misclassification or legal disputes.
Handles labor disputes, termination processes, and severance according to legal guidelines.

Termination and Offboarding

Manages the exit process including final settlements, documentation, and legal notices.
Ensures that terminations are handled fairly and lawfully to protect both employee rights and company interests.

When to Use an EOR:

International Expansion: To quickly enter a new country or region without setting up a local entity.
Remote Workforce: To employ remote workers legally in different states or countries.
Temporary Projects or Contractors: For short-term hiring without permanent infrastructure.
Compliance Risk Management: To avoid legal risks related to employee misclassification or non-compliance with local labor laws.

Benefits of EOR Services

Rapid market entry and hiring flexibility
Reduced legal and administrative burden
Full compliance with local employment regulations
Simplified payroll and benefits management
Ability to test new markets without long-term commitments