Understanding the Role of an Employer of Record: A Comprehensive Guide

Maria Chojnowska

25 September 2023, 3 min read

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What's inside

  1. What is an Employer of Record?
  2. Key Responsibilities of an EOR
  3. Distinctive Features of EOR vs. Traditional Employment
  4. Who Needs an EOR?
  5. When To Consider an EOR for Your Business?
  6. Conclusion

Navigating the complexities of global employment can be a labyrinthine task for companies, especially those aiming for international expansion or managing remote, multi-jurisdictional teams. If this resonates with you, understanding the role of an Employer of Record (EOR) can provide a strategic advantage.

This guide aims to demystify an EOR, its operational aspects, and why it’s an indispensable business partner in today's global landscape.

What is an Employer of Record?

An Employer of Record is a third-party organization that serves as the legal employer of your staff, handling the myriad administrative, legal, and compliance-related tasks linked with employment. While you control your staff's strategic management, day-to-day roles, and functions, the EOR undertakes the backend work that keeps the wheels turning smoothly.

Key Responsibilities of an EOR

Regulatory Compliance

Your EOR will track changing employment laws, tax codes, and social security obligations across different jurisdictions. They ensure that your company remains in full compliance, thus averting costly legal disputes and financial penalties.

Payroll & Benefits Management

Handling payroll for an international team isn’t just about currency conversion. The EOR manages salaries, processes tax deductions, and takes care of bonus structures in line with local employment standards.

Contract Governance

Every jurisdiction has its nuances when it comes to employment contracts. The EOR ensures that your employment contracts are drafted and managed in strict adherence to local regulations.

Talent Onboarding and Exit Management

From background checks to severance pay, the EOR provides end-to-end solutions for onboarding new employees and offboarding those who move on.

Distinctive Features of EOR vs. Traditional Employment

Under traditional employment, your company would directly hire, onboard, manage, and pay all employees, absorbing all the complexities that come with it. An EOR simplifies this:

  • Hiring: You select the candidates; the EOR ensures that job contracts meet local laws.
  • Employee Management: You manage the day-to-day while the EOR handles HR issues and employee welfare.
  • Payroll: Forget about currency or compliance headaches; the EOR handles everything.
  • Termination: If a contract ends, the EOR ensures it meets the standards of local labor laws.

Who Needs an EOR?

Companies Looking to Expand Globally: If your business plans to venture into new markets, hiring local talent can be complex. An EOR can expedite this process, ensuring that all hires meet the legal requirements of the new jurisdiction.

Businesses with Remote, Multi-Jurisdictional Teams: Managing remote teams across different jurisdictions? An EOR can centralize your administrative tasks, providing uniformity and compliance.

Start-ups and SMEs: If you're a small or medium enterprise with limited HR resources, an EOR can manage your employment tasks while you focus on core business functions.

When To Consider an EOR for Your Business?

If you are encountering challenges related to compliance in multiple jurisdictions or the administrative burden of global payroll is becoming a concern, it might be the right time to consider partnering with an EOR.


In a business landscape where agility and scalability are essential, an Employer of Record is your strategic partner, helping you navigate the intricate web of global employment. While this guide has aimed to provide a comprehensive overview, every company’s situation is unique.

Ready to discover how an Employer of Record can transform your global employment strategy? Contact us to schedule a consultation.

Stay tuned for more information about EOR's advantages. Check out our blog for additional software development, outsourcing, and product design insights.


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