A business’s growth involves complicated payroll procedures, mandatory legal compliance, and a great deal of paperwork. Whenever a business hires an employee, it takes on all the challenges, costs, and liabilities that come with having the employee on staff. Many businesses don’t want to take on this responsibility. One other alternative is to hire an employer of record. For global hiring, more and more companies are choosing to use employers of record (EOR). With EOR services for global employment, organizations can sidestep bureaucratic hurdles, comply with local labor laws, reduce HR and legal workload, and improve the employee experience.


What Is An Employer Of Record?

EORs are companies that take over the legal responsibilities related to employee employment to reduce the complexities associated with HR functions, market access, and international talent management. EORs help you hire remote workers anywhere in the world without establishing subsidiaries abroad, sponsoring employees’ visas, relocating them, or worrying about compliance with local employment laws and tax laws.

What Is The Role Of An Employer Of Record?

Several companies turn to EORs to achieve their ultimate objective of international expansion.

Recruits employees on your behalf

If you don’t want to hire independent contractors or open a subsidiary, an EOR provides the ability to hire full-time employees around the world. Through their legal subsidiaries in other countries, an employer of record can hire staff for you without putting your finances or legal obligations at risk. It’s still your job to oversee the employees and get their day-to-day work done, but it’s the EOR who takes care of their contracts, payments, employee benefits, time off, taxes, etc.

Ensures contracts are compliant with local laws

It’s significant to prepare employment contracts that comply with the country’s tax laws and labor regulations when you hire employees. It takes time and effort to understand and ensure compliance in another country; to do so in multiple nations is even more challenging. Taking care of this is the responsibility of EORs. A contract is established by an employer of record to ensure compliance with all local requirements, such as taxes, welfare benefits, employees’ compensation, basic income, termination requirements, and bonus schemes.

Performs background checks

Additionally, recruiters run background checks on new hires to ensure they don’t have any criminal records or other red flags that could harm your business. Through an EOR, you can have a contingent workforce assist you in expanding your business at short notice and with a short project period.

Onboards new hires

Employee onboarding is another service provided by EORs as part of their HR services. They assist employees in getting started by creating contracts and obtaining signatures, collecting all necessary documentation and tax forms, and adding the potential staff to your payroll.

Terminates and rehires potential staff

Your workers’ employment contracts can be terminated or switched from one type of agreement to another by an employer of record. A country’s employment authorization standards and provisions are different, and an EOR can guide you through them. When it comes time to terminate an employee, you make a decision, and the EOR manages the formalities and judicial procedures.

Benefits Of Using Employer Of Record Service?

Since there is a direct contract between the EOR and the employee, the collaboration is risk-averse. Ideally, the service agreement will be negotiated with all parties and will contain all the details of the contract. EORs have their own registered business in the country of interest. An EOR already has a business registered in the country of interest. This could save you time & expense, allowing your company to grow quicker and be more adaptable. This is especially useful when a backup workforce is required to meet business demands. Businesses can achieve new heights by hiring EOR firms, which bridge the talent gap and provide the following advantages:

Manage legal payroll abroad

Based on the country, hiring remote workers has legal ramifications. Taxation rates, for example, vary considerably, and with much legislation shifting annually, it can be impossible to keep track of all prerequisites. The companies provide EOR services to ensure their clients comply with the laws governing taxation, employee welfare, and retirement benefits.

Minimize compliance risks

Rather than attempting to know a bunch of rules every time you hire someone from a different country, you can depend on EOR. You don’t have to bother about local regulatory tax laws, employee compensation, or work permits if you outsource hiring–the employer of record will handle it on your behalf. If a legal issue comes up, you are sheltered: as the employee’s legal employer, the EOR bears complete responsibility for non-compliance penalties.

Cost-effective operations

Many businesses would have to consider opening physical offices to meet their global service requirements if EOR companies did not exist. EOR solutions alleviate the need to establish companies abroad, leading to substantial savings because EOR firms are only paid for hours worked


Large companies specifically find dealing with employee matters to be time-consuming. Businesses can spend more time growing their businesses and performing other vital operations by utilizing EOR services.

Recruit from a global pool of talent

You can leverage the power of a global workforce by getting your payroll, benefits, and contracts handled by an EOR. You benefit from new perspectives, unmatched diversity, and dynamic company culture. You also gain the ability to provide local assistance in emerging markets, languages, and time zones.

Protect the information of your employees

Each EOR must sign a Data Processing Agreement (DPA) with each client since they process employee data. Employers are required to handle employee data confidentially and steadily at all times under the DPAs. The majority of EORs ensure that General Data Protection Regulation (GDPR) compliance is maintained, encrypt and backs up data, and ensures network security to avoid leaks.

Enhance your employee experience

Employers of record can assist you in preparing recruits for the job, in addition to following work rules and handling local payroll. As the legal employer, EORs facilitate the onboarding of all new employees.