Today we’re going to talk about what exactly an EOR is, who can benefit most from partnering with one and why, and what you can do today if you’re ready to cut that red tape and get out from under a mountain of onboarding paperwork.
Let’s start with what an Employer of Record (or an EOR) is.
The definition is “a company or organization that is legally responsible for paying employees, including dealing with employee taxes, benefits, insurance, etc.“
And since taxes, benefits, and insurance are some of the most complex, risk-heavy parts of doing business (seriously, did you want to stress eat a cookie just reading those words?) it can be a game-changer for certain businesses.
So which businesses benefit the most from partnering with an EOR?
Businesses with a lot of hiring needs on tight deadline find that an EOR can be an absolutely indispensable secret weapon. These businesses often…
- Need to hire a lot of freelancers without making hiring freelancers their main business.
- Don’t have time to deal with the administrative problems and mountains of paperwork that come with hiring, paying, and insuring workers.
- Have a hard time keeping their workforce happy because it takes a highly-trained team and airtight systems to pay quickly and accurately.
- Worry about getting on the IRS’s radar because the laws are always changing any errors can bring on audits, fines, and penalties.
Don’t pick up that cookie…I have good news!
This exactly where an EOR can be a total game-changer because it eliminates red tape for hiring while also keeping those doing the hiring out of court.
An EOR serves as the employer and takes on all related responsibilities and liabilities while employees work for another company. Depending on the needs, an EOR does some or all of the following:
- Makes hiring new workers (often one of the most painful parts of the process) 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
- Terminates employees, administers benefits, and handles some worker issues
By doing all that, an EOR can eliminate or greatly reduce the need for an HR department.
In short, an EOR turns a mountain of hiring paperwork (certificates of insurance, I-9s, E-verify forms, and so on) into a molehill.
Here’s what to do today if you think you might benefit from partnering with an EOR
If partnering with a company that specializes in these services and has existing systems in place would help you move your projects forward and keep your hands off those cookies, fill out our form at PayReel.com and we’ll talk through solutions for your unique situation.