What Is an Employer of Record? A Quick Guide
Bradford Jacobs
We Consult, Implement, Attract, Engage, Onboard and Induct the best employees for your business needs globally.
Your business is doing well and you are looking to expand into multiple states or international markets. The problem is the leg work necessary to learn about your legal obligations, hire employees, manage payroll, etc. in another state or country is time-consuming. Conducting business in another location seems like a dream.
Imagine running a business with employees in various locations. While you worry about daily business operations, someone else makes sure the legal requirements for a business in that location are met. Sound too good to be true?
Introducing the employer of record, a popular outsourcing service. About 54% of all companies worldwide use third-party support teams. Businesses globally spent about $75.2 billion in outsourcing during 2021 with 78% giving positive feedback.
Read this employer of record guide for everything you need to take your business to the next level of multi-state and/or international operations.
What Is an Employer of Record?
An employer of record (EOR) service allows you to develop globally remote business teams. You can explore and test new market areas without setting up a new entity abroad.
By utilizing an EOR you can have employees around the world. The beauty of this arrangement is you handle the daily tasks and activities of your business. What you do not have to do is manage the legal obligations of international employment.
Your EOR takes responsibility for hiring, firing, and paying your workers their wages. They make sure your business is compliant with all laws and regulations of that country. This includes labor contracts, payroll taxes, and more.
Employer of Record Benefits
Using employer of record services frees up your time and saves you money. There is no need to spend hours researching laws and regulations. By outsourcing through an EOR service, you do not need to track down local administrators and markets.
With an EOR you can hire workers in another state or country without setting up a local entity. Every state and country has employment, work permit, and payroll requirements for non-resident companies doing business within their borders.
With an EOR, there is no risk of violating local employment laws. Your EOR will make sure you are 100% compliant with local rules, regulations, and labor laws. The EOR stays up-to-date on any changes.
While you are handling the operation of your business, your EOR keeps your business running by providing equal benefits and perks to all employees globally. The EOR handles all HR and payroll operations.
You pay the employer of record the appropriate funds to cover the wages of each employee. The EOR takes responsibility for the management of payroll. This includes processing payroll, collection of taxes, payment of taxes, etc.
Employer of Record Services
There are a plethora of personnel services that are time-consuming, both in processing and the need to know rules and regulations. When you have an EOR they will handle the following tasks:
Your EOR will help with the work permit visas your employees require. They will let you know about any notice period requirements, severance pay rules, and termination rules.
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Who Holds Responsibility?
Now with the operations of the employer of record explained, you are probably wondering who holds responsibility under the law if problems arise. Both the business and the EOR have responsibility for different areas of company operations.
As the business owner, you have responsibility for daily business operations. You are the one that is responsible for the management of workplace safety and compliance.
The employer of record holds responsibility for any personnel issues that arise regarding payroll compliance, tax laws, licensing, and other employment problems.
How to Find an Employer of Record Service
Employer of record is one of many services a professional employer organization (PEO) provides.
A global PEO ensures compliance with regulations and laws in the country where you want to expand. You will not need to set up a business entity in that country.
The PEO becomes the EOR and you handle the business operations. You as the business owner manage the hiring of employees. The PEO takes responsibility for paying taxes, salaries, and compliance with local labor laws.
When you hire a PEO company such as Bradford Jacobs International Expansion and Global Employment Services you have the advantage of an international team of experts that stay up-to-date on local laws and regulations in over 100 countries.
In addition to EOR services, the company handles payroll outsourcing, global mobility, and recruitment. They have international knowledge about the cultural practices, laws, and regulations for the area you are moving into. The company will provide you with support while working toward achieving your expansion goals.
Compliance With Immigration Regulations
When you have an EOR as part of your PEO services, experts are handling compliance with immigration policies. Policies are constantly being revised, and when dealing with visas, business activity, and work permits, you don’t want to get caught making a costly mistake.
Knowledgeable GEO and EOR staff provide you with security by protecting against immigration law non-compliance.
Get an Employer of Record
Now that you’ve had the employer of record explained while learning employer of record tips, you are ready to jump on the global expansion train. Take your business into the global market by contacting Bradford James about their employer of record services.
We provide you with the opportunity to employ remotely and grow globally. Our services remove the restrictions of only hiring in your local market. You have the ability to hire the best of the best in talent from around the world.
Contact Bradford Jacobs International Expansion and Global Employment Services today. We’ll share the benefits of using our services to manage international projects and employees in any country.