Questions to ask an Employer of Record (EoR) provider

If your business is considering expanding abroad, but you are not yet ready to establish an overseas entity, using an Employer of Record (EoR) could be the answer. An EoR can help you to compliantly hire staff abroad. This relieves you of the time investment, costs, and resource-strain that comes with setting up an overseas branch of your business.

Choosing an Employer of Record (EoR) can be a daunting task. The field of global employment solutions is rapidly expanding. As a result, you may feel spoiled for choice as you research companies through which to compliantly hire global talent.

Compliance is at the heart of any reliable EoR enterprise. That is why you need to know the ins and outs of how an EoR runs its business when selecting a service provider.

What is an Employer of Record service?

An Employer of Record service allows you to compliantly hire staff overseas without having to establish an entity in that country. This model works well for businesses hiring overseas short-term. It can also work for those who wish to test the waters in a foreign market, before fully committing to setting up an entity.

An Employer of Record can facilitate short-term and longer-term assignments. They work with businesses and organisations of any size. These include SMEs, multi-national corporations, educational institutions, and NGOs. Using an Employer of Record service is a cost-effective way to explore new markets without long-term commitment.

How does an Employer of Record service work?

An Employer of Record will have registered legal entities in multiple countries. This way, they are able to legally employ staff on your behalf in your preferred country. An EoR will handle hiring, onboarding, offboarding, and HR. This means that your workers always have support on the ground.

An EoR will have local experts who are familiar with all regional employment, immigration, and tax regulations. Their expertise helps to mitigate any risk of falling foul of local employment laws. These laws can often be complex and differ greatly from place to place. That is why it is important to do everything you can to ensure compliance when you wish to expand globally.

I’m considering working with an Employer of Record. What questions should I ask them?

When selecting an EoR, it is crucial that you know what to look out for and the right questions to ask. This way, you can ensure that you select the best EoR for your business expansion needs.

Question 1: What employment options does this Employer of Record offer?

When partnering with an Employer of Record, the first thing you need to know is that they are able to compliantly employ workers abroad. It is not enough to simply handle Global Payroll and HR.

Confirm with your prospective EoR that they offer a full suite of global employment services. You need to be certain that the EoR is dedicated to ensuring 100% compliance in all areas. If they are not committed to compliance, this could jeopardise your workers and your business.

Question 2: If I use an Employer of Record, who will actually be employing my workers?

So, you have established that the EoR offers compliant employment. Now, ask if the EoR is the direct employer or if it partners with a local entity to employ workers in-country. Partnering with a local entity is not necessarily an issue, and many EoRs do this in some regions.

However, it is important for any business partnering with an EoR to understand the various parties involved in their agreement. In some cases, you may be put in touch with a third-party partner.

If the EoR you are considering uses a third-party partner, make sure you know who exactly will be responsible for your workers. You need to understand how they will fulfil this role. Before selecting an EoR that uses a third-party, you need to be certain of:

• Who will handling performance issues?
• Who handles data transfer?
• Who handles local law updates?
• What due diligence has been carried out?

Question 3: If I use an Employer of Record, what will the Employer of Record’s responsibilities be?

The Employer of Record is usually responsible for payroll, legal compliance, and tax filing. They also handle HR duties such as onboarding and offboarding. The day-to-day running of operations should remain with the client.

Your business will need to ascertain the exact responsibilities undertaken by the EoR you are considering. This must be done to be sure that they match your needs. The division of responsibility will also depend on the local legislation of the country where you are employing staff.

Question 4: Who does the contract agreement involve?

The contract will be between the Employer of Record and the worker in all cases. The contract may or may not mention your business. This depends on the country. As with all legal matters, employment contracts vary greatly between regions.

Make sure to review the contract template thoroughly. Ensure that you are happy with the information contained in the contract. Pay careful attention to information regarding the EoR’s responsibility and employee working conditions. These will need to align with your company values and goals.

Question 5: What happens if I need to end the employment contract?

If you need to end an employment contract, the EoR should be available to support you. The EoR should provide accurate advice and handle the situation with 100% compliance. Ask to see your prospective EoR’s procedure for terminating contracts in the region in which you are hiring.

Question 6: How does the Employer of Record manage their data?

Managing employee data is crucial to any company. When selecting an Employer of Record to work with, you must be certain that they have an efficient data management system. This is necessary to keep your company and employee data safe and managed correctly.

Scrutinise an EoR’s security and privacy policies. Do this to assess their compliance levels. Find out:

• If a system failure occurs, what is their data recovery plan?
• Are they ISO27001-certified?
• Where are their servers located?

Payroll data is a specific branch of data management that can cause major upset, if handled incorrectly or if mistakes are made. When partnering with an EoR, you need to know that their methods are foolproof. Ask whether there is a platform on which you can review final payroll calculations, for example.

Question 7: How long has the Employer of Record been in operation?

An Employer of Record does not need to have been operating for a long time, to be a reputable and reliable service provider. However, as in any industry, experience helps. Choosing an EoR provider that has been in business for a number of years means that you are working with a team of experts.

Mauve Group was founded in 1996, and many members of the Mauve team have been with the company for 10, 15, and even over 20 years. Our experts learned everything they know from their experience of Mauve’s own global expansion. This makes us a leader in the field of Employer of Record services.

Mauve Group has over 28 years of experience. We are ISO 27001-certified. We offer global Employer of Record and other employment solutions in over 150 countries.

Contact our team of experts today and find out how our Employer of Record (EoR) service can help your business to compliantly navigate the challenges of going global.