Question 1

What is an employer of record and how does the service work?

Accepted Answer

An employer of record is a company that legally employs workers on behalf of another business in a country where that business has no local legal entity. The EOR handles all employer obligations including drafting compliant local employment contracts, processing payroll and tax withholding, administering statutory benefits and social contributions, and managing compliance with local labour law, while the client company directs the day-to-day work of the employee and retains full operational control.

Question 2

When should a company use an employer of record service?

Accepted Answer

Companies should consider using an employer of record when they want to hire talent in a new country without establishing a local subsidiary, when onboarding speed is critical and setting up a legal entity would take too long, when testing a new market with a small team before committing to a permanent local structure, when retaining a remote employee who has relocated internationally, or when managing a distributed global workforce across multiple jurisdictions simultaneously.

Question 3

What countries do employer of record agencies typically cover?

Accepted Answer

Leading global employer of record agencies typically cover between 50 and 180 countries, with strong coverage across North America, Europe, Asia Pacific, Latin America, the Middle East, and Africa. Coverage depth varies by provider, with some offering owned-entity EOR solutions in major markets and using in-country partner networks for less common jurisdictions, so it is important to verify whether a provider has direct legal entities or relies on third-party partners in the countries most relevant to your hiring plans.

Question 4

How does an EOR handle employment contracts and local compliance?

Accepted Answer

A specialist employer of record agency drafts employment contracts that comply with local labour law requirements in the relevant jurisdiction, incorporating statutory notice periods, probation terms, termination provisions, leave entitlements, and any sector-specific requirements mandated by local legislation or collective bargaining agreements. The EOR monitors ongoing regulatory changes and updates employment terms and payroll processes accordingly to ensure continuous compliance throughout the employment relationship.

Question 5

What is the difference between an employer of record and a professional employer organisation?

Accepted Answer

An employer of record becomes the sole legal employer of the worker and assumes full employment liability, which makes it suitable for hiring in countries where the client has no entity. A professional employer organisation enters into a co-employment relationship with a client that already has a legal entity in the country, sharing employer responsibilities rather than replacing the client as the legal employer entirely, making PEO arrangements more common for domestic workforce management rather than cross-border hiring without a local presence.

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Frequently Asked Questions

What is an employer of record and how does the service work?

When should a company use an employer of record service?

What countries do employer of record agencies typically cover?

How does an EOR handle employment contracts and local compliance?

What is the difference between an employer of record and a professional employer organisation?

Employer of Record Agencies Enabling Global Hiring Without Barriers

Explore More Recruitment Agencies

Frequently Asked Questions

What is an employer of record and how does the service work?

When should a company use an employer of record service?

What countries do employer of record agencies typically cover?

How does an EOR handle employment contracts and local compliance?

What is the difference between an employer of record and a professional employer organisation?