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An employer of record (EOR) is a trusted organization that assumes legal responsibility as the employer for foreign employees on behalf of their clients. By acting as a middleman, the EOR takes on all legal obligations related to employment, including contracts, salaries, benefits, and taxes, ensuring full compliance with local labor laws when hiring from different countries.

Employing an EOR service allows companies to hire full-time employees in foreign countries without the need to establish their own legal entity. This process, which typically requires substantial time and financial resources, is circumvented through the cost-effective approach of utilizing an EOR. By doing so, companies can overcome regulatory obstacles associated with international employment.

Some of the services provided by an employer of record include legally employing global and remote workers, creating locally compliant employment contracts, conducting background checks, processing international payroll, managing tax documentation and filing in accordance with local laws, offering employee benefits and perks, safeguarding intellectual property, facilitating new employee onboarding, and handling contract terminations.

Hiring Process:


The process of hiring through an employer of record involves several steps. The EOR either hires subcontractors or establishes its own local entities in various countries around the world. It partners with companies that provide employee benefits and perks in different sectors, such as health insurance and pension plans. Through this partnership, companies gain access to employees from countries where the EOR operates. The EOR then manages employees on behalf of the client, taking care of their contracts, background checks, payroll, taxes, statutory rights and benefits, terminations, and more. The client retains control over day-to-day responsibilities and schedules, while the EOR tracks working hours to calculate wages.

Why should I hire via EOR?

Hiring through an EOR offers several advantages for international expansion. It saves time and money when hiring international employees, reduces compliance risks associated with foreign countries, provides access to a global talent pool, streamlines HR tasks, enhances data security, improves employee experience with localized perks, and aligns with future work and hiring trends.To select a suitable employer of record solution, it is important to consider certain factors. These include an easy-to-use platform with self-service options for employees, customization and access management features, in-house legal and payroll support, integrations with existing HR and accounting tools, high data security standards, a well-organized help center, and customer support available in the appropriate time zone and language.


What is the difference between Professional Employment Organization and Employment of Record?

It is worth noting the distinction between an employer of record (EOR) and a professional employment organization (PEO). While EORs serve as the legal employer of workers, PEOs provide co-employment services, sharing legal liabilities and management responsibilities with the client. Additionally, PEOs operate locally and do not facilitate the hiring of international employees. 

What is the difference between a Global Employer or Record and Employee of Record?

A global employer of record (GEO) is essentially synonymous with an employer of record. While an EOR can employ individuals from the same country as the client, they assume the role of a global employer of record when hiring globally.

Is it possible to engage independent contractors using an employer of record?

While EORs primarily focus on compliantly hiring full-time and part-time employees, independent contractors can usually be hired directly without the need for an EOR. Independent contractors operate differently in terms of payroll taxes and benefits, making it unnecessary to involve a middleman for their recruitment.


Comprehensive worldwide workforce management solution

Some EORs, such as Lagati Consulting Inc., offer comprehensive workforce management solutions that encompass both employees and independent contractors. This allows for centralized management of the entire workforce through a platform that offers advanced features, including various payment methods, debit cards, automatic invoicing, and even support for cryptocurrencies.