An employer of record, or EOR, is an organization that legally employs workers on behalf of another business under a service arrangement. The client directs day-to-day work, while the EOR handles specified employment administration and statutory obligations.
What does an EOR typically handle?
- Employment contracts and onboarding
- Payroll, withholding and statutory contributions
- Benefits administration
- Required employment records and filings
- Leave and termination administration
- Local employment compliance support
EOR vs. staffing agency
An EOR primarily provides the legal employment infrastructure for workers selected or managed by the client. A staffing agency commonly recruits and supplies temporary workers as part of its service. Models and legal treatment vary by country.
EOR vs. BPO provider
A BPO provider takes responsibility for delivering a defined process or service outcome using its organization. An EOR employs individuals who operate under the client’s direction. The actual working model matters more than the label.
What should a buyer review?
Review the employing entity, permitted activities, worker classification, intellectual-property terms, confidentiality, benefits, termination rules, data handling, insurance and the allocation of employment liabilities.
What does an EOR not eliminate?
The arrangement does not automatically remove permanent-establishment, co-employment, tax, immigration or regulatory risk. Obtain jurisdiction-specific advice for the actual roles and duration.
