An employer of record (EOR), also known as the "single employer" or "central HR", is a business that serves as an intermediary between the client and the employer. EOR has been appointed by the Worker to act as the business' employer. It is often used in situations in which the client wants to outsource some functions, such as payroll and benefits administration. This may be necessary for a variety of reasons and is often done for tax or legal purposes.
It is normally used in conjunction with a professional employer organization (PEO), which performs most of the administrative functions on behalf of clients, allowing them to focus on their core business. With this kind of arrangement, both employee and employer are protected in cases where benefits or taxes arise. This can be important for businesses who want to work with the greatest flexibility and reliability, without sacrificing quality.
Benefit of Employer of Record
The advantage of using an employer of record is that there's one person that is usually responsible for the company. All legal documents and tax forms are sent to this individual, providing easy access to all important information. It allows you to manage your employees in one place. When you are not able to post their time themselves, their hours will automatically be posted to their tasks.
Imagine having the flexibility to move employees to different teams and different locations without forcing them to change their payroll.
Also you have complete control over your company's health benefits plan. You'll decide what coverage is offered, how to offer it and who should enroll. Employer of Record also gives employees a clear understanding of what they are entitled to receive.
When does the business need an Employer of Record?
The Employer of Record (EOR) solution is the ideal solution for companies that want to expand internationally without having to worry about compliance. With EOR, your company can hire new employees in new locations without having to establish a physical presence, or deal with the logistical issues involved in expanding across borders and entering new markets.
All the benefits of EOR can make it easy to see why Employer of Record is such a valuable asset for your business. Think of it as stepping stones to building a team, even if you aren’t sure about their long-term tenure.
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