A third party in the employment structure
Employer of Record, or EOR, describes a service where a third party acts as employer within an agreed structure. The client company works with the team and hires the provider to manage certain responsibilities.
It is a commercial description, not a uniform legal category across countries. Before using it, confirm the structure is viable for the country, activity and working arrangement.
What the service may include
Depending on the provider and contract, scope may cover documents, registration, payroll, benefits and operational support. A sales presentation does not guarantee inclusion in the fee.
- Identify the employing entity and its relationship with the provider.
- Owners for payroll, payments and worker inquiries.
- Included benefits and separately billed items.
- Procedures for pay changes, leave and termination.
The fee is not the total cost
Request a proposal separating pay, related charges, benefits, administrative fees, deposits and variable costs. Ask about currency, exchange rates, cutoff dates and refund terms too.
An apparently low platform fee may come with additional items. Use the same pay, country, start date and scope in every proposal.
When to consider an assessment
This may be worth exploring when entering a new country or delegating operations. Viability, timelines and responsibilities must be confirmed case by case.
Having a provider does not remove the need to review the structure. Request documented scope, party responsibilities and an exit or transfer plan to your own structure.