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How to know if your Employer of Record’s onboarding process is above board

Here’s how to spot a non-compliant onboarding process.

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When a company hires a new employee using an Employer of Record (EoR), the EoR undertakes the worker’s entire onboarding process. Most EoRs ensure compliance and consistent support. But some may value perceived speed and efficiency, over a thoroughly compliant onboarding process – leaving both the employer and employee vulnerable.

If a company is found to be non-compliant with local employment regulations, it can face serious penalties such as large fines and the loss of its sponsorship license; leading to a loss of employees, due to resulting visa cancellations.

In the UK, misclassification of workers can lead to organisations and workers failing to meet IR35 requirements. And employees found to be working – prior to the completion of the onboarding process – also risk losing their worker status.

To ensure you are appropriately and adequately protected and supported during and after the onboarding process, it is crucial to look out for the following indicators of non-compliance.

Oversimplification and unrealistic timeframes:

If the Employer of Record offers a 24-hour onboarding timeframe, this may indicate that certain requirements are yet to be met by the time you’ve commenced work – leaving both you and your employer exposed.

Quick turnarounds can indicate that corners are being cut, as collecting and consolidating all employee data and fully onboarding all data on to the various systems including payroll, benefit plans etc., takes time in order to be thoroughly executed.

Omission of legal requirements:

Failing to complete legal requirements – such as right to work checks and advising the employee about the workplace pension process – is a red flag.

Right to work checks are compulsory for every UK employer, meaning that employers must perform basic checks to verify that the employee has permission to accept and perform the role in question. Right to work checks must be carried out for every single employee, as singling out certain employees may lead to instances of unlawful discrimination.

In the UK, it is mandatory that a new employee is advised of their workplace pension and the opting-in and opting-out processes. If your EoR fails to complete a right to work check or to advise you of the workplace pension and processes, this could be an indication that they are non-compliant.

Few or no questions before or during the onboarding process:

When you are joining a new company, the employer or Employer of Record should require, at a minimum, proof of nationality, right to work clearance, and any information pertinent to visa applications. If this information is not immediately requested, this could indicate that the EoR may be attempting to complete the necessary onboarding processes after you have commenced work. This can lead to incorrect or incomplete onboarding, leaving you without a contract or other necessary employment documentation for prolonged periods.

Encouraging you to register as self-employed:

If your EoR encourages you to register as self-employed, it is likely that this is so you can be treated as an independent contractor, rather than an employee who is entitled to certain rights and benefits. Hiring you as an independent contractor means that the EoR does not have to pay any of the taxes and insurances incurred by hiring you as an employee.

Misclassifying workers is illegal and if a worker is found to be misclassified, the employer can be subject to large fines and the revocation of their sponsorship license, meaning that the worker risks losing their employment and visa.

If you’re a current or prospective EoR worker and you have any questions about the solution, you can contact clientservices@mauvegroup.com at any time.

To find out what it’s like to be an Employer of Record worker from the people at the heart of the solution, click here or here.