Employer of record (noun):
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 one of the top benefits of partnering with an Employer of Record (EOR). For companies that need to hire a lot of freelancers without making hiring freelancers their main business, hiring and EOR can make a lot of sense. That’s because they don’t have time to deal with the administrative problems and mountains of paperwork that come with hiring, paying, and insuring so many workers. If devoting the time to it right simply isn’t feasible, they often have a hard time keeping their workforce happy because they can’t pay quickly enough. They also risk unwanted attention from the IRS because the laws are always changing. Without airtight systems and processes, audits, fines, and penalties follow.
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 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 you might be in the latter category, reach out to PayReel and we’ll talk through solutions for your unique situation. Your life is about to get a whole lot easier.
