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4 FAQ about Employer of Record Services (Updated for 2019)

Posted by Stacey Jones

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Sep 12, 2019 9:00:00 AM

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You’re thinking about expanding your business into the US. You know it’s a big task, and you’re hoping to bring on the right team to assist you through it. To that end, you’re wondering about employer of record services.

Like other business leaders, you have plenty of questions about EORs and what they can do for your business. Here are some of the most frequently asked questions about EOR services and how they could help you today.

1. What’s the Difference between EOR Services and PEOs?

As you enter the American market, you may hear talk of “professional employer organizations,” PEOs or “employer of record,” EOR. Many employers in the US ask which is better for their business, a PEO or an EOR.

What’s the difference?

The main difference relates to the employment relationship.  A PEO will become a co-employer with your organization where you will still exercise supervision and care and control of a worker. An EOR, on the other hand, acts as the employer of your workers and undertakes all employment responsibilities. They handle everything to do with workforce management, so you don’t have to.

2. Do You Need to Hire an EOR?

Another common question employers have is whether or not they need to work with an EOR as they expand into the United States.

There’s no law saying you must work with an EOR, but there are several good reasons to consider doing so.

EOR services include everything from payroll to talent development to compliance. Many business owners believe they can handle these tasks on their own, but the truth is navigating labor law in the United States can be quite tricky.

Working with an EOR could assist you in many different ways. The EOR’s expertise offers insight in making the right hires. Continuous compliance monitoring means your policies will always be in line with the law.

This can make it easier to administer better HR in your business and keep your US employees happy. Working with an EOR could help you avoid some of the common mistakes for Canadian businesses expanding into the US. This could mean avoiding hefty penalties or even lawsuits.

3. Can’t You Hire Independent Contractors?

This is another common question from business owners trying to decide if employer of record services are right for them.

It is possible to hire American workers as independent contractors in some cases. The truth of the matter is that it can be difficult to know when someone is acting as an employee and when they’re a contractor. There may also be cases where the law dictates that someone is an employee.

Employee misclassification is an ongoing concern for the IRS and state governments. In fact, many states have laws that impose fines and other penalties on employers who misclassify their employees.

There are also cases where it just makes more sense to hire employees versus contractors. You should always carefully assess your business’s needs.

4. What Is Included in EOR Services?

As mentioned, EOR services might include business expansion, benefits, and more. Ultimately, it depends on what your business needs.

If you want help finding talent and onboarding employees, an EOR is a great option. They may also provide training and development opportunities, employee management, and payroll services. They also offer compliance monitoring.

An EOR may also offer access to infrastructure like banking or workers’ compensation. Handling workers’ compensation and unemployment claims can be tricky, especially since rules vary from state to state.

Essentially, an EOR is your one-stop shop for great HR services for your American employees. No matter what you need a hand with, the EOR can help.

Find the Right EOR Now

The best EOR services will be the ones that fit your business. Companies in many different industries could benefit from working with an EOR. To discover how an EOR could help you, get in touch with the experts now.

What Are You Leaving to Chance by Handling Payroll on Your Own

Topics: Employer of Record

Stacey Jones

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