Employer of Record

An Employer of Record, or EOR, is a third-party organization that becomes the legal employer of a worker on behalf of a client company, specifically in a country or state where the client does not have its own registered legal entity. The EOR takes on the legal responsibilities of employment, including payroll processing, tax withholding and remittance, statutory benefits administration, and compliance with local labor law, while the client company continues to manage the employee's actual work, projects, and performance. This model has become the standard way for companies to hire talent internationally without the time, cost, and legal risk of setting up a foreign subsidiary. Instead of spending months registering a local entity and building out compliance infrastructure, a company can use an EOR to have an employee legally onboarded and working within days or weeks. An EOR differs from a staffing agency or contractor arrangement because the worker is a genuine, full employee with access to statutory benefits, protections, and a compliant local employment contract, not an independent contractor. This distinction matters because misclassifying an international worker as a contractor when they should legally be an employee carries significant financial and legal risk in most countries.