What is an EOR and who needs one?
What is EOR?
The Staffing Industry Analyst defines EOR as –“an employer for tax purposes while an employee performs work for the client, such as a staffing firm or other business. An employer of record handles all personnel functions, including payroll processing and funding; tax deposits and filing; and employment contracts and paperwork. Maintaining a Certificate of Insurance, I-9, and E-Verify forms; unemployment insurance; and workers’ compensation are done. An employer of record also performs background checks and drug screenings; administers benefits; terminates employees; and may handle worker issues.”
In shorter more simple terms, an EOR assumes the responsibility of the “employer” to your contingent employees (with all the legal commitments that entails) and “leases” them back to you to work on your behalf so that you can retain control over the workers activity.
An EOR can assume responsibility in the following areas
Onboarding and offboarding
Pre-employment screening and credentialing
Timecard management and expense reimbursement
Payroll funding, processing and tax withholding
Co-employment risk management
Insurance and workers’ compensation administration
Employee benefits administration
Expertise on employment laws in each geography
Why do you need an EOR?
You may think why use an EOR when you could just hire contingent workers yourself. With a wide range of worker types/classifications, plus complexity for your organisation when it comes to managing both a full time and contingent workforce, working with an EOR can help eliminate some management challenges.
Working with an EOR means your organisation has a safe and compliant means to access all types of contingent talent. Using independent contractors for projects is becoming increasingly more common and keeping up to date with the regulatory constraints and tax implications that apply to the different classes of contingent workers is complicated. There is much more to consider than when employing regular permanent employees, which is why many companies in this situation rely on an EOR.
Better employee benefits and workplace rights
A large EOR like People2.0 has huge buying power when it comes to employee benefits, due to the fact it works with hundreds of agencies and deploys thousands of contingent workers each year. This enables EOR’s to give smaller talent procurement firms access to competitive benefits at a cost they are able to afford, ensuring that their contingent workers can enjoy a comprehensive benefits programme.
Being up to date with current employment laws in the countries where you are deploying workers is a complicated task. Different countries have different employment standards when it comes to holiday pay, overtime pay, minimum wage etc and it is important to get these right. As previously mentioned, employer of records are experts in employment laws across the globe, ensuring contingent workers can rest easy knowing their workplace rights will always be protected with the agency they work for has partnered with an EOR.
To find out more about the benefits of engaging with an EOR, contact a member of our sales team on email@example.com .