What is an Employer of Record? A Complete Guide to EOR

An employer of record (EOR) is an organization that provides legal support and compliance assistance when a foreign company wants to employ a group of remote professionals internationally. Entering a new market, a foreign company often faces challenges in navigating a complex set of employment regulations. EOR makes it easy for foreign businesses.

In addition to compliance support, an EOR takes full responsibility for managing administrative services such as payroll, taxes, and benefits for your international employees. It means an employer of record provides an all-in-one service package that helps you hire international employees compliantly and get your human resource (HR) services done on your behalf.

In short, an employer of record (EOR) is an organization that legally employs a team of local professionals on behalf of foreign businesses. Thus, EOR acts as the local guardian of employees who work for a foreign company. On the record, it’s an employer of the local employees and handles all legal and administrative responsibilities related to the employees. Simply put, with EOR support, a foreign business can easily hire a team of remote talent in another country and employ them successfully.Benefits of an Employer of Record (EOR)

Employer of Record (EOR) services offer several benefits, including compliance support, risk mitigation, access to global talent, operational efficiency, and cost savings. As global businesses increasingly compete to tap skillful resources internationally, an EOR provides diverse benefits for small and large companies. Let’s explore the major benefits of using EOR services for businesses.

Compliance Support & Risk Management

employer of record (EOR) services offer compliance support for companies expanding their business operation internationally. When using EOR services, foreign companies can enter a new market and operate their business without worrying about compliance issues. Being a legal employer, EOR companies mitigate compliance risks by shielding your business from potential tax liabilities, legal disputes, and non-compliant activities.

Access to Global Talent

EOR services allow companies to access a diverse talent pool without establishing a legal entity in a different target country. Companies can hire skilled professionals quickly and compliantly regardless of geographical barriers with employer of record (EOR) support. Small companies can compete globally by accessing specialized skills readily unavailable locally. Accessing and leveraging a global talent pool is key to staying competitive in a rapidly evolving global marketplace.

Reduced Administrative Burden

EORs help reduce the administrative burden of businesses as your EOR partner is solely responsible for handling HR services related to your international employees. On your behalf, EOR companies handle payroll, tax filing, and benefits administration, freeing up your valuable time and enabling you to focus on your core business tasks. Also, employer of record (EOR) services help improve the overall employee experience and productivity.