What is an Employer of Record?

Onrec Explains · Recruitment & HR guides

An Employer of Record (EOR) is an organisation that legally employs workers on behalf of another business. The client typically directs the day-to-day work, while the EOR manages agreed employment responsibilities in the country concerned.

When might a business use one?

An EOR can help a company employ someone in a country where it has no local employing entity. Services commonly cover employment contracts, payroll and statutory benefits. Availability and responsibilities depend on the jurisdiction and the arrangement.

What an EOR does not settle automatically

Using an EOR does not remove every obligation or business risk. Immigration, tax exposure, intellectual property, worker classification and local restrictions still need appropriate review. Establish who is accountable for each issue before signing.

Questions for a shortlist

Who will be the legal employer, and does the provider use its own entity or a partner?
What is included in the fee, and which deposits, benefits or exit costs are additional?
How are employee questions, payroll corrections and urgent issues handled?
What happens if the employee moves country or the client opens its own entity?

For recruitment agencies

Clarify the boundaries between introducing a candidate, supplying a worker and arranging employment. Document how the agency, client and EOR will communicate with the individual. Obtain advice for the countries and working arrangement involved.