The term EOR is an acronym for Employer of Record. An EOR is a third-party company that takes over all the employment tasks on behalf of another company. This lets the Employer of Record allow overseas companies to create offshore teams without setting up locally while minimizing the liabilities and risks of local employment laws.
The EOR acts as the intermediary in an existing relationship between an employee and an employer. The Employee of Record carries out the regulatory and legal requirements of employment, payment, and payroll. However, it does not necessarily engage in day-to-day work.
The Employer of Record is the registered employer of the employees in paper, hence the name Employer of Record. Nonetheless, the EOR does not have management or supervisory roles. The original employer or the client still makes all the decisions regarding projects, position duties, compensation, and termination.
The service scope of the Employer of Record is broad, therefore the client can customize it according to their needs. Generally, the EOR is responsible for the personnel functions assigned by the client. They will also ensure that the client has ultimate control over the business operations. The EOR service will provide an end-to-end solution for the business needs of the client and is the legal entity tasked to carry out the following duties.
The EOR is an effective and efficient solution to the outsourcing needs of your business. As a client, you can save time and resources that you can redirect to more significant functions. Proceed to the section below to know more about the numerous distinct benefits of hiring an EOR.
They are responsible for taking care of the welfare of the employees. The EOR carries out numerous tasks mandated by the government and health maintenance organizations. These tasks include processing the payroll and insurance coverage.
One does not need to be knowledgeable on the labor and tax laws of the country a client is hiring from. This benefit comes in handy, especially if the client owns an overseas business. The EOR will ensure that your business is compliant with all the applicable laws. The EOR makes sure that your payroll processing complies with employment laws in the country. It is the responsibility of the EOR to stay informed on local laws to save you from the hassle monitoring compliance.
Partnering with an EOR will allow business owners to have more time on your hands. Since you would not have to deal with HR and payroll matters anymore, you can save hours. Furthermore, the EOR will help you save costs since you will pay them a set rate for every hour the employee works.
Local incorporation and registration are necessary if you choose to skip hiring a third party. These processes are costly and time-consuming since you would need skilled accounting and legal support. Hiring an EOR will let you ensure compliance without the hassle of local incorporation.
Hiring an EOR will be very helpful to organizations that plan to expand globally. The client company will then rely on the EOR for local expertise and expediting the process. Hiring an EOR is the most convenient way for a company to meet its global growth objectives. To elaborate, here are some situations wherein partnering with an EOR will be most helpful.
An EOR will hire employees in target countries and assess the readiness of an international market. They let the company test the waters by starting operations with the new employees. The company will not need to spend money and time establishing an entity since the EOR will take care of it.
Hiring independent international contractors will put you at risk of tax and employment violations. An EOR will do all processes following all the requirements of your host country. Doing so will prevent you from incurring penalties due to non-compliance.
Hiring an EOR is best for a company that wants to begin its operations quickly but is yet to establish an entity. The EOR will take charge of the company’s services while the company sets up the entity simultaneously.
The EOR will help a company compliantly pay its new employees. They will take charge of the payroll on behalf of a company that does not have a legal business entity. By doing so, this facilitates the acquisition for the client company.
As the EOR, KMC provides human resource and payroll management for its client companies. Our team of experts can manage these crucial aspects of your business for you. We are familiar with the local tax systems and laws that you must follow. With that, you can focus your time on revenue-generating activities. Here are the specific services that we offer.
Here are the 5 easy steps to get started on our partnership:
Are there Upfront Cost in Utilizing KMC's Employer of Record Model?
KMC's Employer of Record (EOR) model does not involve significant upfront costs. Instead, the costs are generally structured to be part of a comprehensive service package that includes employee salaries, benefits, and administrative fees. This model allows businesses to streamline their budget management by consolidating various employment-related expenses into a single monthly invoice, rather than incurring substantial initial expenditures.
KMC is ISO-certified and is the largest Employee of Record service provider in the Philippines. Our team takes pride in providing customer-centric solutions for our clients. We commit our time and effort to build our partners’ trust. Contact our experts today, and we look forward to taking part in your company’s growth and success
TESTIMONIALS
KMC helps us scale whether through leased workspace that they help manage or through staff leasing — leveraging KMC's core expertise which is talent acquisition.
Larah Teng
Country Manager / Zoom
Positives significantly outweigh the negatives working with KMC. It's definitely positive, there's a lot of talent, you can move quickly, it's very agile, we've had a lot of success.
Michael Klint
Director of Operations / Moscord
KMC allowed ASG to set up operations quickly without the hassle or inconvenience of piecing together resources, services, and capabilities from different sources.
Tom Morgan
National Manager / ASG