What is An Employer of Record (EOR)?

An Employer of Record (EOR) is a specialized entity that assumes legal employment responsibilities on behalf of another business. By taking on the role of an employer, an EOR assumes comprehensive accountability for various employment aspects, including compliance with regulations, payroll management, tax obligations, and benefits provision.

Employers of record can be situated either within the same country as the business they serve or in a different country governed by distinct employment laws.

An EOR offers guidance and support to businesses, ensuring that all employees are hired in compliance with local labor regulations. They provide legally compliant employment contracts, effectively addressing the intricacies of employment law on behalf of the business.

Once a business identifies a new hire, the EOR takes charge of the onboarding process. This includes managing the employment agreement and establishing all necessary protocols to enable the new team member to seamlessly integrate into the company.

The EOR assumes full responsibility for managing payroll and local tax obligations for both the employee and the employer. This entails handling payment processes and issuing payslips to the business’s team members on behalf of the EOR.

When an employee’s contract needs to be terminated, the EOR efficiently manages all necessary details and procedures involved in the process.

EORs often offer a range of benefits, although the specific offerings can differ among service providers. These benefits may encompass health insurance, time-off policies, parental leave, and more, depending on the EOR.