Sat. May 25th, 2024
employer of record solution

Advantages of hiring through the employer of record solution

Employer of record services allow businesses to expand globally when hiring new employees. As a growing trend in the world, especially due to the Covid-19 pandemic, this form of staff leasing has many benefits over in-house solutions

What is an employer of record?

An employer of record is an organization that serves as the employer for payroll and tax purposes while the employee performs work at a different company. The employer of record is liable for employment issues along with payroll compliance and tax laws.
Employer of record services can be helpful when dealing with payroll tasks and employment laws for employees in different countries. The employer of record keeps updated on the local laws so you don’t have to worry about complying with laws in multiple places.

Here are a few benefits of such solution:

Global expand your business

Using EOR services will allow you to expand your business on other markets in different countries. This makes the employer of record a great choice for small companies that are looking to cover various markets. It also works well with larger companies that want to find an experienced workforce that is already used to working on the local ground.
Moreover, as a small business owner, you will want to avoid investing in a full-time HR division, at least before your business gets on its feet. Employer of record hiring can give you the use of their HR professionals, at lower costs. This makes EORs extremely cost-effective ways of recruiting new full-time employees in other countries.

Employer of record takes administrative care of everything

When you get a new hire through an EOR, this person will already be ready to work. An employer of record should have their own payroll software and take care of payment for all of their employees. This means no one misses their paycheck and you don’t have to manage pay period timesheets. Finally, if the employee doesn’t fit the position, the EOR will terminate their contract. However, keep in mind that the employer of record doesn’t influence your business decisions and that you as the business owner have full ownership of your staff’s working relationship. The employer of record takes care of the administrative tasks around hiring, from the very first to the last day of an employee’s contract.

Local law compliance

One of the best things about relying on EOR services is that you don’t have to worry about any employment laws or labor laws for the country you’re recruiting in. Employers of record will take care of it all for you, making sure you are compliant with all of the local laws. They will take responsibilities, such as:
Employee benefits – EOR takes care of all benefits administration required by law in the country of operations. These may include maternal leaves, paid vacation, healthcare, etc.
Employees’ compensation – in case of a worksite accident, the employer of record will provide employees’ comp in accordance with the local laws.
Insurance – employers of record provide their own insurance plans for employees, including health insurance.

Relevant working environment and culture

EOR will provide a more fitted working environment, more suited to the local people. They will definitely implement your wishes and needs when hiring, but they will also make the process easier on the employees. Each EOR is used to working with potential candidates in their area. They know more about both the working culture of the people they hire, as well as how to properly manage the integration on the local level. Since EOR integrates on the local level, the hiring process will be much easier on the employees. However, they will still consult with you about your wishes and needs.

No additional payroll taxes co-employment burden

The taxes that will need to be paid are already incorporated in the price you are paying when you hire through the employer of record services. This can save countless hours required for processing and submitting taxes in each specific country your business operates in. Not to mention any fines and penalties caused by missing or misfiling a tax report.
An employer of records keeps things simple. They are the full legal employer (on your behalf) and, as we mentioned, they take care of all the legal compliance requirements.

The majority of public records searches are open to the public, however there are some restrictions. Many courts and government organizations maintain extensive document databases. These documents are useful in locating bankruptcies, frauds, and other illegal activity that have been recorded in official records. Several technologies that specialize in the specific type of information might help you acquire access to free public records search. Furthermore, it is dependent on the state in which you reside, as many documents are protected by key exemptions in order to protect personal information.


Finally, the employer of record benefits and challenges can be subjective. What seems like the best move for some businesses may be counterproductive for others. With remote working opportunities and new markets enabled, this type of staff leasing solution is more and more common. It would seem that generally speaking, there are more benefits to using it.

By Manali

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