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3 Things You Didn't know About Employer of Record Service Providers

Posted by Ray Gonder

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Aug 8, 2014 9:05:00 AM

3 Things You Didn't know About Employer of Record Service ProvidersFor businesses in Canada the term employer of record is well known. However, US businesses may be more familiar with the term PEO (Professional Employer Organization) and not realize that the two are quite comparable. Despite the lack of familiarity, an employer of record service provider could be a huge benefit to any US business contemplating hiring employees within Canada. Here are three things you may not know about an employer of record service provider, and how they can help your business.

EOR vs PEO

In the US, professional employer organizations are quite common. They're used by a wide variety of businesses to outsource employee management processes. They handle everything from payroll and HR, to remittances and compliance. Businesses rely on PEOs to handle many of the HR tasks they don't want to handle in-house. What you may not know is that Canada has its own equivalent to the PEO.

An EOR is the Canadian cousin of the PEO. They provide the same services throughout Canada that PEOs provide throughout the US. Like PEOs, EORs provide their services to businesses of every size, complexity, and industry. Without an employer of record, a foreign company just looking to hire someone in Canada, can run into plenty of administrative roadblocks that often deters the company from engaging with the possible employee.

Cross-Border Support

Hiring Canadian workers for a US is an expensive and time consuming process. There are logistic, legal, and administrative hurdles that have to be overcome before the hiring can even occur, not to mention the headaches keeping up to date on employment standards that can affect payroll. All of these tasks take time and money, and require great attention to detail to avoid costly mistakes. What you may not know is that an employer of record service provider can greatly simplify this process.

An EOR can help US businesses avoid many of the onerous tasks involved with hiring and paying Canadian workers. Without an employer of record, a company would need to spend months setting up the necessary business registrations, government accounts, banking and insurance infrastructure before being able to extend an offer of employment.

An EOR has all of these things in place and take on the role of the employer in the eyes of the Canadian government so the US company does not have to meet this criteria in order to have the benefit of a Canadian worker.

Savings Over Time

Hiring Canadian workers is just the first step in the process. After that, there are ongoing legal and regulatory responsibilities that will take time and focus away from your business. Ongoing training for HR managers, payroll compliance and filing, and employee training are all continuing expenses that your business will have to deal with. What you may not know is that an EOR can handle those responsibilities for much less than it would cost in-house.

EORs handle these issues for a wide variety of clients. To do that, they already have the training, software, and expertise to streamline the processes, and make them as inexpensive as possible. By using an EOR, you're sharing the expenses with a wide pool of other businesses, meaning that nobody has to pay for new software, training, or education on their own.

An employer of record will have in house expertise when it comes to Canadian employment standards, legal system and taxation compliance so you can reap the benefits of having a Canadian worker much quicker and easier than you would if you had to do it on your own.

12 Things an American Company Looking to Hire a Worker in Canada Needs to Know

Topics: Employer of Record Service Provider

Ray Gonder

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