Employer of Record (EOR) can be described as an organisation that is the legal employer for the foreign employees of their clients. This EOR is the middleman who is responsible for all legal aspects of employment (contracts and benefits, salary and taxes) and makes sure that clients are able to employ foreign workers and in conformity with local laws regarding employment.
Employer of Record (EOR) to be explained
Employer of Record (EOR) permits firms to legally hire and collaborate with employees in other countries without having to establish a local company in the country, and still comply with local laws on tax and employment. A EOR assumes the responsibility of creating an entity legal in the country in which employees are employed on behalf of the client. It takes care of all legal obligations of employment, including the payroll contract, employment agreements and vacation, leave and taxation and allows you to managing employees’ day-today tasks.
The advantages of having an EOR
The process of establishing a formal business entity in a foreign country can be complicated and, if you do not have a deep understanding of the regulatory system in that country, may be a risky venture. EORs reduce compliance risk and simplify hiring. EOR reduces the risk of compliance and streamlines the process of hiring.
From providing immigration support to managing onboarding, payroll and terminations EOR EOR manages the most delicate issues that involve hiring and managing employees in a different country.
An EOR can help you:
Get rid of the complexities and expenses associated with establishing your own business
Increase the speed of your hiring so that you don’t let go of promising potential candidates
Locally compliant employment contracts can be created.
Payroll management can be streamlined by taking care of payroll taxes and pensions in the area, as well as the statutory benefits
Offer your full-time global employees competitive benefits
How do you choose an EOR
EORs aren’t all the same. This checklist will help you decide the EOR is the best fit for your needs.
Are the EOR present in the countries you’ll need to employ?
The firstand most important factor to consider when choosing an EOR for expansion across the globe is whether they are operating in the country you’d like to employ.
What are the benefits of EORs for companies?
EOR EOR permits a company to hire full-time, legal workers in another country, state or province. The EOR is able to take on the burden of local laws to ensure that the client is able to hire workers in the region. Remote is an EOR across all of our countries, states and provinces.
Without an EOR companies are not able to employ employees outside of the area where they are located and with some exceptions. For instance, larger companies might decide to establish their local legal entities in order to hire workers from different areas. This can be expensive and time-consuming but it is especially so when working with many countries. The barriers to cost have kept even the best-funded companies from hiring international workers.
Employers of record offer access to talent across the globe to businesses of any size, not just corporate clients. If you’re looking to employ someone in the country that you don’t own any legal entity (and you do not want to go through the hassle of creating an entity on your own) you’ll need an EOR.
Imagine finding the ideal engineer for your company. The problem is that the engineer lives in France and you’re located on Silicon Valley.
You’re determined to be able to do it So you research the possibilities. It is possible to take the person on as a contractor. However, the perfect candidate may prefer to have the security and advantages of full-time work. You may consider creating a legal entity to recruit the initially French employee, hoping that you could hire more in the future.
If you don’t have an experienced international expansion team and large resources, you’ll quickly get into difficulties. French regulators are asking questions. You must travel to France not just once, but multiple times to complete all the paperwork. At Remote we had to wait some months as well as several thousand dollars and several trips with the CEO aboard to establish our French company this year.