An employer-of-record (EOR) service helps companies manage onboarding, payroll, benefits, and HR for workers in new countries without a local legal entity. An EOR ensures that companies remain complaint with all local & federal labor and tax laws.
An EOR is also referred to as a local employer, local employment partner, HR services, global employer of record, international employer of record, Global Employment Organization (GEO), and sometimes erroneously as a global PEO or Professional Employer Organization.
The EOR helps companies determine what is a competitive salary, but the company actually decides what compensation should include. The EOR simply ensures that the compensation and benefits package is commensurate with the job description, required tasks, and the employee’s past experiences.
On paper, the EOR is the official employer, but the company is still in charge of day-to-day management and oversight of international employees.
An EOR manages the end-to-end employee lifecycle, from onboarding to offboarding and everything in between, including:
Run global payroll
Administer localized benefits, including health care and retirement plans
Manage employment contracts
Sponsor work visas & permits
Register with local government institutions, such as social security
Some EORs offer additional services such as:
Equity and stock management
Equipment distribution (e.g., laptops, tablets)
Co-working space rentals
In general, an EOR service enables companies to offer best-in-class compensation packages in countries where they don't have a legal entity. By partnering with an EOR, companies of all sizes can streamline onboarding, build their global teams quickly, and retain top talent.
Streamlined onboarding, including international background checks.
Save months (or even years) of time by onboarding workers in just days or weeks. Opening up a legal entity or establishing a subsidiary can take months, or even years. For many businesses, the timeline of opening a legal entity can hamper business progress.
Legal, accounting, and HR in-country expertise.
An EOR like Via offers on-the-ground legal, accounting, and HR experts. This approach enables an EOR to create the right structure for your business.
In the long run, you will save on regulatory costs, as well as associated expenses with hiring and building a local HR team. Plus, Penalties, fines, and legal actions fall on your EOR, not you. Companies working with an EOR end up saving $200k+ USD on employer costs.
Termination and severance requirements.
An EOR helps you navigate offboarding, building a severance package, and terminations seamlessly and compliantly.
Competitive benefits packages.
Your EOR can help you build a competitive benefits package in each country so you recruit and retain top talent. Common benefits include health insurance, dental, vision, meal vouchers, transportation voucher, retirement accounts, flex spending about, paid time off, sick leave, workers compensation, mental health support, office stipends, and fitness stipends.
Access to a global talent pool.
You can offer best-in-class benefits to top talent across the world.
Low-risk way to globally test out markets.
An EOR service allows employers to explore new markets without having to invest heavily in establishing a local business presence.
Better products and services.
By diversifying your team, choosing the best talent on the market, tapping into new resources, and going global, your products will inevitably improve.
An EOR helps you manage the end-to-end payroll process for your workers, including:
Opening an in-country bank account
Registering with government institutions such as social security and the tax authorities
Managing ongoing payments & benefits
Navigating PTO, holiday pay, and other forms of leave
Ensuring ongoing compliance with current and new labor laws
Offboarding with the correct severance packages
The EOR bills your company in the currency that makes the most sense, so you can avoid high foreign transaction fees and unnecessary banking fees.
We begin onboarding workers with our own legal entities. Your workers will provide the following information:
Full name (first, middle and last name)
Identity ID number
Work permit identification (if nationality does not corresponds to the offer’s country
Your customer support manager will ensure your workers are registered with the correct government institutions so they can receive benefits. They will also confirm your workers' bank details.
Your customer support manager helps you manage ongoing payroll and benefits, including PTO, holiday pay, reimbursements, and other benefits.
When it's time to terminate a worker, your EOR ensures that all workers are offboarded with the correct amount of severance, if applicable.
When choosing an EOR, you should consider the following:
Do they offer flexible pricing as you hire more workers?
Do they have hyper-local features in your target markets?
Can your EOR support just a handful of workers, or help you build a hub of 20-100+ workers? Via, for instance, offers hyperlocal services that enables companies to build and scale local HQs in the top markets around the world, a service that is not offered by most EORs.
An EOR service is sometimes referred to as a PEO, or professional employment organization.
Technically speaking, there are a few key differences between the two. Both are global payroll solutions. However, in most countries, a PEO follows a co-employment model, so you will still need to establish a local legal entity. The PEO helps manage local HR processes, but does not assume full responsibility for ensuring compliance.
EORs operate in 100+ countries across the world, including:
While some EOR services partner with recruiting or staffing agencies, the EOR is not generally responsible for finding talent. An EOR is not a temp agency or a global recruiting services firm. In general, companies are responsible for identifying the right candidates for open positions, whereas the EOR helps them onboard, hire, pay, and administer comprehensive benefits for full-time employees.
When choosing your EOR partner, you want to make sure that they are compliant with all employee data regulations, including the GDPR in the European Union and CCPR in North America. This is especially important when sharing employee and client data with third parties.
Your EOR partner should have best-in-class cybersecurity practices established. By choosing the wrong partner, you risk lower quality control, more data/security breaches, and risks of losing IP.
Many companies try to cut corners by hiring foreign employees as contractors, rather than putting them compliantly on payroll. While this might work as a short-term solution, it’s not sustainable for long-term growth.
As your employee’s legal employer, an EOR service like Via usually charges a monthly fee for its services.
An employer of record company or provider helps companies onboard employees based on foreign countries, put them on local payroll, and administer localized benefits. The EOR provider onboards employees on behalf of the parent company.
An employer of record helps businesses to hire employees quickly, test out new markets, scale up without establishing a physical presence abroad, and reduce costs associated with regulation and building a human resources team abroad. As you expand globally,The employer of record is responsible for mitigating compliance risks, no matter how complex the situation is.
PEO services help companies hire employees and manage local HR processes, such as payroll and benefits. However, you will still need to open an entity to partner with a PEO, since it’s technically a co-employment model. EOR’s services, like Via, own their entities abroad, handle the entire process of hiring, and take full responsibility for maintaining compliance abroad.
While the terms employer of record and PEO are used interchangeably sometimes, they are not the same, though they are both related to GEO. A PEO enters into a co-employment relationship with their client, which means companies are still liable for compliance and need to have an entity, which can lead to wasted time and money.
An EOR in staffing stands for an employer-of-record service provider. Staffing agencies supply talent, while an EOR helps your business compliantly hire workers in new countries.
Are you looking to expand your business into one market, or multiple markets? Do you have serious expansion plans in one country? If you’re not ready to fully embrace a new market, or are only hiring a few employees, then using an EOR is probably the right path for you, especially if you have employees in multiple countries.
No. Make sure that your EOR service has its own entity. Many PEO services and outsourcing companies market themselves as EOR, when they don’t have an entity.
Some businesses are weary of engaging with an EOR service provider because of poor experiences with other recruiting, payroll processing, and hiring services. Similarly, highly skilled workers are weary of outsourcing, because they have a reputation for offering mediocre pay and benefits. It’s true: many global payroll organizations rely too heavily on third-party services, which means that they don't have sufficient knowledge of tax laws or local HR processes. This leads to miscommunication and unhappy employees. An EOR service like Via, however, can function much more like a strategic partner. Via, for example, owns its entities and has a team of local legal and HR experts to help customers. When companies partner with Via, for example, the company makes all of the hiring and termination decisions, and manages the employee’s day-to-day activities.
Yes and yes. The wide-spread adoption of remote work means that CMOs, CTOs, VPs, and other executives are choosing to live away from HQ–or even abroad. An EOR enables companies to find and recruit the best talent without worrying about immigration policies and relocation costs.
Should a legal action arise that requires the EOR to intervene, the company’s contract grants the EOR the right to ensure that compliance is being met with more difficult matters, such as terminations, severance, unemployment.