Employer of Record (EOR)
GeneralFeaturedA third-party organization that legally employs workers on behalf of another company, handling all employment responsibilities including payroll, taxes, benefits, and compliance.
An Employer of Record (EOR) is a comprehensive employment solution that allows companies to hire employees in countries where they don't have a legal entity. The EOR becomes the legal employer while the client company maintains day-to-day management control.
Key responsibilities of an EOR include:
- Processing payroll and handling tax obligations
- Managing employee benefits and insurance
- Ensuring compliance with local labor laws
- Handling employment contracts and documentation
- Managing HR processes like onboarding and offboarding
This arrangement is particularly valuable for companies looking to expand internationally without the complexity and cost of establishing a local subsidiary.
Examples
Global Tech Expansion
A US software company uses an EOR to hire developers in the Philippines without setting up a local office, allowing them to access top talent while remaining compliant with Philippine labor laws.
Remote Team Management
A startup uses an EOR to employ remote workers across multiple countries, enabling a distributed team structure without legal complications.
Common Use Cases
- •International expansion without local entity setup
- •Hiring remote employees in different countries
- •Testing new markets with minimal investment
- •Compliance management in unfamiliar jurisdictions
- •Rapid scaling in global markets