An Employer of Record, commonly shortened to EOR, is an organisation that legally employs a worker under an agreed arrangement. The client organisation normally directs the employee’s day-to-day work.
What the EOR model means
The EOR enters into the employment relationship with the worker and coordinates the agreed employment administration. This can include the employment contract, payroll, PAYE processes, workplace pension administration and employment-related HR support.
How responsibilities are divided
The client normally manages the person’s role, objectives, work allocation and operational supervision. The EOR manages the agreed legal-employer and administrative responsibilities. The exact division should be documented before onboarding.
When companies use an EOR
Companies often consider EOR when entering a new market, hiring a first local employee, testing demand, or when the timeline does not support establishing a local employing entity immediately.
What an EOR does not remove
An EOR arrangement does not remove every legal, tax or operational consideration for the client. The role, working model, intellectual property, data access and supervision should still be reviewed carefully.
This article provides general information only. It is not legal, tax, financial or immigration advice. Requirements depend on the facts of each engagement.