An EOR, or employer of record, is a third-party organization that becomes the full legal employer of a companys workforce and assumes all employer-related responsibilities and tasks on behalf of the company. This means that the EOR takes on the companys human resources responsibilities and onboards, pays, and manages the supported employees while the company maintains and controls the day-to-day operations. An EOR enables companies to legally hire and collaborate with employees overseas without opening their own local entity in that country, while fully complying with local employment and tax laws. The EOR takes on the responsibility of establishing its own legal entity in a country to hire employees on the client’s behalf. It handles all the legal requirements of employment, such as payroll, employment contracts, vacation, leave, and taxes, while allowing the company to continue to manage employees’ day-to-day work.

Some benefits of working with an EOR include:

• Minimizing compliance risk and simplifying the hiring process
• Providing immigration assistance to handling onboarding, payroll, and terminations
• Handling the most sensitive regulated aspects of hiring and managing workers in another country
• Allowing companies to hire top talent from anywhere and support them based on their local needs
• Saving costs compared to entity setup
• Retaining talent and offering comprehensive benefits packages
• Maintaining compliance with employment contracts and evolving labor laws
• Increasing a companys flexibility in staffing

An EOR can help companies hire from anywhere and attract top talent. Additionally, when employees want or need to be relocated, an EOR helps companies retain their top-tier talent without needing to set up entire new legal entities in multiple countries. EORs often offer a variety of benefits, such as health insurance, time-off policies, parental leave, etc. . EORs usually focus on allowing client companies to hire full-time (and part-time) employees compliantly. EORs manage payroll for international employees, including deducting taxes and mandatory social contributions, as well as contributions for benefits like private health insurance.