If you’re expanding your business, you’re probably looking at all your options for getting assistance. After all, it’s not a small task, and a growing business keeps you busy. Many of the human resources tasks you perform are time-intensive, such as hiring and payroll. If you’re expanding across borders, you may also be looking for help in complying with local labour laws around these activities.
One type of assistance keeps cropping up in your searches. Many people suggest you work with an EOR. What does the acronym EOR stand for?
The term stands for “employer of record.” This is a kind of business that partners with you to assist you with a variety of different tasks. They’re so named because they’re the employer on record for the employees you hire.
What do EORs handle? There are a number of different tasks they will take care of for you, from payroll to benefits administration, to hiring and terminating employees.
An Employer of Record Acts as the Employer
Essentially, the EOR you work with stands in as the employer of the workers you hire through them. They formally hire the employees, list themselves as the employer, and conduct payroll. They’re responsible for paying the employees, deducting the proper payroll taxes, remitting those taxes to the local tax authority, and more.
You may work with them closely to establish hiring guidelines. You may even be involved in the hiring process, helping them interview candidates or reviewing a handful of resumes they’ve pre-screened for you.
When it comes to payroll, you may set the wages employees should be paid. More often than not, you’ll remit to the EOR an hourly fee, from which they’ll pay your employees.
The EOR Handles Benefits Administration
In addition to payroll, the employer of record will handle benefits administration for your employees. Most often, this is through the EOR’s own benefits structure.
An EOR works with many different companies, and they’ll thus have many employees. As a result, it’s often more economical for them to purchase benefits packages. They can then offer these benefits to your employees as well.
An employer of record will also handle things like holiday pay and vacation pay.
The EOR Maintains Records
Another task the employer of record is responsible for is the maintenance of records. Record-keeping is often dictated by local laws, so it’s much easier for a business with good knowledge of local laws to handle record keeping.
Get a Helping Hand with Compliance
Another thing the employer of record is responsible for is your compliance. When you expand into a new area, you may not be familiar with the local laws. This can lead to mistakes in your payroll, your tax remittance, and even your hiring process.
The EOR is much more familiar with the requirements set out in local legislation. They’ll assist you by monitoring compliance in their human resources activities. If a law changes, they’ll adjust their policies. You can be sure you’re on the right side of the law when you work with an EOR.
A Helping Hand and Good Advice
An EOR isn’t necessarily responsible for giving you good advice, but they can often extend this service to you as well. If you’re looking at expanding into a new country such as Canada, consulting with them may be a good first step.
The employer of record is often knowledgeable about many different aspects of operating a business as a foreign entity. They may be able to advise you on tax-efficient business structures or other aspects of your set-up.
Do You Need an EOR?
If you’re thinking about expanding your business into a new area, working with an employer of record could be a great step. They can help you in so many different ways, reducing your workload and helping you run a successful business wherever you choose to set up shop.