EOR - Employer Of Record

An "employer of record" (EOR) is an entity that legally employs workers on behalf of another business. An EOR takes full responsibility for all aspects of employment including compliance, payroll, taxes, and benefits. 

Employers of record can be located within the same country as the business it employs workers for, or in another country with different employment laws.

Companies that hire employees in many remote countries need to understand hiring, vacation, leave, and many other policies in these jurisdictions. Traditionally this meant setting up a business in these countries to hire and manage people.

A new breed of platform/service provider is an EOR (Employer of Record). This information explains what they do.

Compliance with local employment laws

An EOR will guide and support a business to ensure employees are hired in accordance with local laws in every country or jurisdiction and provide them with compliant employment contracts. As the EOR is the employer, the business can rest easy knowing that the legal ins and outs are taken care of.

Onboarding new team members

Once a business has found a new hire the EOR will onboard them, managing the employment agreement and setting up all the necessary processes necessary for the new team member to start at the company.

Running payroll internationally

Payroll and local taxes for both the employee and the employer will be fully managed by the EOR. The business's team members will be paid by and receive paystubs from the EOR.

Managing compensation and benefits

EORs often offer a variety of benefits but these vary from service to service. Benefits can include health insurance, time-off policies, parental leave, etc. This may include working with works councils or other local labor organizations.

Processing contract terminations

When an employee’s contract is terminated, the EOR will handle all the necessary details.

Note: EOR providers also provide AOR (Agent of Record) services for contractors. AORs' functions include worker classification, contracts, invoicing, payroll, and continued compliance.