An employer of record (EOR) is a company that legally employs workers on another business's behalf in a country where that business has no entity. The EOR holds the employment contract, runs payroll and meets local employment duties, while the client directs the daily work.
An EOR becomes your staff's legal employer where you have no entity, but a PEO only shares employer duties with a local entity you already have. So an EOR suits entering new countries and a PEO suits outsourcing HR where you operate.
Global payroll is the process of paying employees in several countries accurately and on time. It applies each country's tax, social contribution, benefit and reporting rules, usually in local currency through one central process.
A professional employer organization (PEO) is a firm that shares employer duties with a client through co-employment. It runs payroll, benefits and HR administration, while the client keeps its own legal entity and stays an employer.
A staffing agency finds and supplies workers, while an employer of record legally employs people you have already chosen. One solves sourcing; the other solves employing people where you have no entity.
Contractor misclassification is treating a worker as an independent contractor when, under the relevant law, the relationship is really employment. It can expose the business to back taxes, unpaid benefits, penalties and claims from the worker.
Through an employer of record a worker becomes a local employee with benefits; as an independent contractor they run their own business instead. EOR adds control and compliance cover, and contracting is lighter and faster but carries misclassification risk.
A clear proven process, that delivers
You've seen our ideas - now go deeper.
Discover more insights, guides, and engineering practice.