What is an Employer of Record? – Your Complete Guide
Companies expanding their business operations internationally by hiring remote talents from other states and countries. Hiring international remote employees they face legal and administrative complexities that take away their focus from their core business. Then where Employer of Record service play an important role solving this problem. This service takes care of all the legal and administrative tasks related to hiring, managing, and paying employees.
What is an employer of record (EOR)?
An Employer of Record (EOR) is a professional service provider that o ers a comprehensive solution for managing the legal and administrative aspects of employment for client companies. By assuming responsibility for payroll, benefits, tax compliance, HR administration, and risk management it is the legal employer of the client company’s workforce.
Through a partnership with an EOR service provider, the client company can retain control over its employees’ job duties while delegating employment-related functions. They also take on all legal liabilities and obligations, freeing the client company to focus on core business operations
What are the responsibilities of EOR?
Employers of record are responsible for managing various human resources activities, including payroll, legal matters, tax compliance, and employee benefits for your overseas workforce. An EOR must ensure that the client company is in compliance with all relevant labor laws and regulations, such as minimum wage and overtime laws, anti-discrimination laws, and health and safety regulations
The nature of these duties may di er depending on the company, as well as the methods used by your chosen to fulfill them.
Ensuring that employees are paid in the local currency
Overseeing employee benefit plans
Withholding and remitting payroll taxes, including federal, state, and local taxes
Filing tax documents
Contributing to government initiatives, such as social security programs
Facilitating employee onboarding
Complying with all applicable employment laws and regulations, such as minimum wage and overtime laws
Employee risk management
HR support and service management
Managing employee leave and time o , including vacation, sick time, and personal days
Drafting and executing employment contracts and agreements
Maintaining accurate employee records, such as personal and contact information, job titles, and salary information
Handling employee disputes and grievances, including investigations and disciplinary actions
Ensuring compliance with workplace safety regulations and standards
Handling unemployment insurance claims and appeals
Conducting background checks and screenings as required
Coordinating employee performance evaluations and reviews
Providing employees with access to HR support and resources, such as policies and procedures, benefits information, and company culture initiatives
Ensuring compliance during the o boarding and termination process of employees.
Benefits of using an Employer of Record
1. Compliance – An EOR can help you stay compliant with local laws and regulations. This is especially important if you operate in multiple locations or countries. The EOR will ensure that your business is adhering to all relevant laws and regulations, reducing the risk of legal issues and penalties. Read more....