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Employer of Record: what it is and who needs it most

by Mar 5, 2020CMMA Blog, Freelancer Management0 comments

Employer of record (noun):

a) a company or organization that is legally responsible for paying employees, including dealing with employee taxes, benefits, insurance, etc.

b) your secret weapon for eliminating red tape for hiring and keeping you out of court

While you’re not going to find that second definition in the dictionary, it’s certainly one of the top benefits of partnering with an Employer of Record (EOR). Let’s take a look at the reasons some companies outsource this important part of their business.

What are some of the top benefits of having an EOR?

An EOR serves as the employer and takes on all related responsibilities and liabilities while employees work for another company. An EOR does some or all of the following:

  • Makes hiring new workers enormously easier and faster
  • Covers payroll management for freelancers
  • Maintains current headcount
  • Guarantees on-time payment
  • Handles all compliance issues
  • Provides workers’ comp and all necessary insurance for contractors
  • Conducts background checks and drug screenings
  • Turns a mountain of hiring paperwork (certificates of insurance, I-9s, E-verify forms, and so on) into a mole hill
  • Terminates employees, administers benefits, and handles some worker issues

Who needs an EOR?

We find that clients with a lot of freelance hiring needs on tight deadlines benefit greatly from partnering with an EOR because it makes onboarding–often one of the most painful parts of the process–a nonissue. They also love that outsourcing many of these services helps eliminate or at least reduce the need for an internal HR department. Since we specialize in these services, we have systems in place to make everything as efficient and smooth as possible. Sometimes, it’s the difference between staffing and finishing projects on time and tanking a project before it really even gets off the ground.

Bottom line

Not every company needs an EOR, but for those who do, it’s a game changer. If you think your might be in the latter category, reach out to us and we’ll talk through solutions for your unique situation. Your life is about to get a whole lot easier.

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