What are employer of record (EOR) services?
Employer of record services allow companies without local legal entities to employ workers legally in other countries. These services mostly fall under the functions of human resources and legal teams, including payroll, benefits, taxes, stock options, and compliance.
Other employer of record services may include advisory services for companies looking to expand their teams into new markets. For example, an EOR may offer advice on how to integrate remote workers or how to create a global compensation plan.
Employer of record services typically do not involve “co-employment,” an arrangement in which two companies employ the same person simultaneously. In the country where the employee works, the EOR is the only employer on paper. In practice, however, the EOR does not have any involvement in the day-to-day life of the employee beyond HR functions like payroll and benefits administration.