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Should I Get an Employer of Record or a PEO?

Posted by Stacey Jones


Jul 23, 2019 11:00:00 AM

If you’re hoping to expand into a new market, chances are you’ll be hiring some workers on as part of your team. Employment management is a challenging task in almost any company, even when you’re only managing workers in your home country.

When you move to a new market, you may find compliance, insurance, and even payroll present new challenges. You know you will need a partner with the expertise to help you manage everything, but should you hire an employer of record or a professional employer organization (PEO)?

Determine Your Needs

The first question you should ask yourself is what you need help with the most. If you need help hiring people for your business, an employer of record might be the right choice.

If, on the other hand, you find you need more help with maintaining compliance or administering payroll, then a professional employer organization (PEO) could be the right fit for your business.

When you work with a PEO, you retain control over hiring and termination. The PEO becomes more like a co-employer.

An employer of record, on the other hand, assumes full responsibility for hiring and termination. Some employers like this arrangement, since it reassures them that HR tasks are being handled by the experts. Others feel it gives them too little control over who is working for them.

Thinking Long-Term vs Short-Term

Another way to think about the employer of record vs PEO question is to ask if your concerns are short-term or long-term.

If you’re looking at short-term hires or temporary employment, then working with an EOR may make the most sense.

If you’re thinking about hiring permanent employees to work for your business, then a PEO partnership could serve you well. The PEO can help you manage compliance, look after insurance, and administer payroll. If you know employees are only going to be with you for the short-term, you may not want to sign up for payroll services on an ongoing basis.

What Is Your Expertise?

If your team is full of hiring and recruitment experts, you may not need much help with this task. Additionally, you might want to retain control over the hiring process to make sure you’re finding people who are a good fit for your company.

You might find that you need more help with other HR tasks, such as compliance or payroll. As mentioned, working with a PEO could be the answer. The PEO provides an expert team to help you with everything from insurance to compliance to advice on benefits and procedures.

If you’re unsure your HR team is equipped for hiring or terminating employees in the new market, then working with an employer of record should be an option you explore.

Looking at the Bottom Line

One question that comes up when business leaders try to decide whether they need employer of record services or the help of a PEO is the price point. Will one service be more affordable than another?

In many cases, it comes down to what the business requires. The price of either EOR or PEO services will change with what you need.

For some businesses, the PEO will be the right fit. You retain more control, which can be important when it comes to hiring the right people for your business. Their expert advice assists in maintaining compliance in different markets, but it also gives you the opportunity to synchronize your policies and procedures.

With an employer of record, on the other hand, you can rest assured that hiring tasks are being taken care of by an expert team. You also know that your compliance will be top-notch thanks to the EOR’s expertise.

Finding the right services for your business just takes some evaluation of your business needs. Still unsure? Talk to the experts today.

Topics: Business Expansion, Employment of Record Services, American Companies Paying Workers in Canada, payroll outsourcing

What American Companies Paying Workers in Canada Need to Know

Posted by Stacey Jones


Apr 22, 2016 9:00:00 AM

What_American_Companies_Paying_Workers_in_Canada_Need_to_Know.jpgLately it seems that a lot of American companies are flocking to Canada to expand their businesses into a fresh, robust market. It's no wonder—there are skilled workers (both contingent and traditional), a great environment, and a culture that's similar enough to make that part of the transition easier. There are also obstacles, and many trying to make their way across the border have run into a unique set of problems. Specifically, American companies paying workers in Canada have had trouble getting started when faced with a wall of unfamiliar issues. Luckily, we can break the most critical issues down and devise a solution.

Laws and Regulations Will Be Different

The first thing to remember is that despite the US and Canada being so close together and similar in both culture and economics, they do have their differences. American companies paying workers in Canada note this especially, since some laws involving employment, human rights, wages, and more can differ dramatically from what they're used to. While you may find that many laws are the same, there are critical differences that may well affect every aspect of your business.

It will take some research. You'll want to understand thoroughly the federal laws and requirements you'll be expected to follow. But don't forget: there are provincial and municipal laws to consider as well. Many can change depending on the province or region you're in. When it comes to paying Canadian workers, you'll discover that they're not just subjected to Canadian tax law, but to US laws as well. Ensure you do as much research as possible so you don't find yourself in legal trouble, which can lead to fines, penalties, and even jail time.

Consider Currency Exchange

The difference between American and Canadian currency is probably one of the more overlooked issues when it comes to American companies paying workers in Canada, but it can make for a lot of complication when it comes to processing payroll. Many companies take to dealing with this by watching the exchange rate (on a weekly or monthly basis, sometimes every pay period) and adjusting accordingly. Others simply keep large accounts with foreign currency (in this case, Canadian dollars) and pay cheques from there. Perhaps the simplest way is to pay Canadian workers in American funds, but there are regulations and policies to keep in mind when you go that route. In any case, regardless of the method you choose, you'll want to carefully consider it before hand.

Simplify With an EOR

Because of these complications (and others), a lot of companies find themselves intimidated by the possibility of expansion. And for those American companies paying workers in Canada already, it can be a headache to say the least.

That's where an employer of record (EOR) comes in. Especially in an age where traditional work partnerships and roles are being turned on their head, EORs dedicate themselves to simplification. American companies no longer have to register a business in Canada—they can simply partner with an EOR, who acts as the legal employer of their workers. That means they can hire Canadian workers without the worrying cost of registration or building infrastructure. Best of all, since the EOR is the official employer, it's their job to handle the associated human resources and payroll tasks, taking the pressure off the legal end as well.

HR and payroll are two of the largest resource drains in business, and it becomes even more overwhelming when faced with the prospect of expansion and foreign workers. Why not delegate the details to the professionals and plan out the big picture yourself?

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

Topics: American Companies Paying Workers in Canada

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