What Is a Global Employer of Record? A Guide for International Employers

Choosing our SaaS based PEO/EOR Solution enables you to build and manage 100% pure remote teams and expand into new markets 90% faster.

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What is a Global Employer of Record?

A Global EOR is a third-party entity that helps small, medium, and enterprise-grade businesses onboard, pay and manage their international employees. The EOR service becomes the legal employer for your international employees in different countries. This enables enterprises to onboard and pay international employees without setting up entities in every country they wish to hire.  

Today, leveraging global talent is one of the most significant steps a business can take to grow exponentially. However, hiring international employees comes with multiple challenges like legal issues, currency management, compliance issues, tax management, etc. 

A global Employer of Record service takes care of every challenge you might face while onboarding, paying, and managing international employees, and partnering with an EOR is the most seamless solution to onboarding and paying your international employees. However, a business needs to know how an Employer of Record service works and its functions before going global. 

What does a global EOR do for you?

An international EOR service takes over right from when you choose the right candidate for your organization. It provides you with end-to-end support from the process of onboarding to off-boarding. The primary functions of an EOR are

  • Generates compliant contracts: Every country has a different set of rules that must be followed while developing employment contracts. Your EOR service provider will generate a compliant employment contract for your employees, wherein the details such as pay, duration (if any), and working hours will be decided by you. After you have given everything you need to have in your contract, the EOR will generate a final employment contract aligned with that country’s regulations. 
  • Makes compliant and on-time payments: One major challenge employers face when paying international workers is staying compliant with that country’s taxes and other mandatory deductions. A global EOR has multiple compliance teams that are constantly updated on these mandatory deductions. Therefore, all the payments to your international employees are accurate with the local taxes and other deductions and are made on time. While working with a global EOR, you don’t need to worry about paying in different currencies. You simply need to pay your EOR service in one currency, and they will disperse the right amounts in the respective currencies. 
  • Helps with benefits and insurance: Some global EOR services such as Multiplier also enable you to choose extra benefits for your employees. These benefits allow you to stand out from the crowd and boost employee retention. You can select benefits such as insurance, performance bonuses, joining bonuses, and ESOPs.
  • Manages employees with clear visibility: Global Employer of Record services also help you manage your international employees. You can keep track of their payments and benefits and also track their leaves and time-off. You can access all the critical information on your international employees in a few simple clicks and stay updated at all times. 

Considering that the focus here remains on payroll and payroll compliance, it is easy to confuse an EOR service with a PEO service.

How is it different from a PEO?

A PEO, or a Professional Employment Organization, may sound similar to an EOR, but they are quite different in nature. 

When working with a PEO, the employer and the PEO service become co-employers for the said employees. Here, the PEO handles functions like payroll and HR, and the client focuses on managing and handling the employees. 

The main difference shows on paper. While working with a PEO, the employees still are legally registered with the primary employer. On the other hand, when working with an EOR, the organization’s employees became the legal responsibility of the EOR rather than the organization.

Benefits of working with a global EOR

When you work with an international Employer of Record service, many responsibilities regarding your international employees are taken off your shoulders. The benefits of working with a global EOR are

  • Seamless onboarding: Onboarding an international employee usually involves a ton of paperwork, which takes time and effort. An EOR helps you onboard employees in multiple countries in just a few clicks. It generates a complaint employment contract tailored to your requirements and meets the local labor law requirements. 
  • Complaint and consistent payroll: Paying international employees always becomes challenging since tax deductions and other laws constantly keep changing. Keeping up with all the local laws may result in many delays in payments, which also creates distress amongst employees. International Employer of Record services ensure that all your payments are complaint and on time.
  • Stay free of any compliance complexities: Since your international EOR service provider is the legal employer, you need not worry about any compliance issues. Moreover, your EOR service always ensures that all the payments, contracts, and benefits issued to your employees align with each country's local labor laws. Therefore, the chances of any complexities are next to negligible. 
  • Clear visibility: While a global EOR works in the backend and ensures things are running smoothly, it also ensures that you are always updated on all information about your international employees. All of the information on payments, benefits, and leaves/time-off is constantly updated on your dashboard so that you know that things are working smoothly.  
  • Saves time and money: When the massive task of global payroll management is lifted off your internal HR teams' shoulders, they will have much more time to focus on global expansion, retention, and other HR strategies. Most importantly, when you work with an EOR, you save the cost of setting up a business entity in each country you wish to employ workers. 

Working with an international EOR opens up many expansion opportunities, saving you time, effort, and resources. However, choosing the right EOR partner is very crucial for your business.

How to choose the right global EOR?

Choosing the right EOR for your business is a crucial step. Here are some of the things you must keep in mind while looking for a global EOR partner:

  • Look for transparent pricing: More than often, services may present to you a very exciting, affordable, and cost-efficient quote. However, chances are that this quote comes with many hidden overhead costs that might take you by surprise when you actually use the service. Therefore, always look for a partner that presents all the costs upfront. 
  • Ask for feedback from organizations in your industry: First-hand experience from an organization in the same industry can tell you a lot about your potential EOR partner. Make sure you ask for feedback from the right people and weigh out the pros and cons. 
  • Make sure you have access to countries of your choice: Many global EOR service providers might be offering services in most nations, but there is a chance that they are not yet present in the country you are looking to hire.
  • Ensure that the EOR has good knowledge of local laws: Staying compliant with local labor laws and regulations is a non-negotiable for any global Employer of Record. You must make sure that the EOR has good knowledge and enough resources in the countries you wish to hire.  

Apart from these points, you must also be clear on the kinds of responsibilities an EOR will take over. A global EOR is only in charge of payroll, payroll compliance, and management. The core decisions around your employees, such as compensation, number of leaves allowed, working hours, etc., still lie in your hands. While some EORs may offer additional services to support your internal HR teams, most do not indulge in internal policy-making or strategizing. Before choosing your EOR, make sure that both employers' roles and responsibilities are clear.

Go global with Multiplier!

Multiplier is a one-of-a-kind technology-powered solution to hire, manage and pay international employees faster and more efficiently. Multiplier has local entities in over 150 countries across the globe, which gives you access to hire talent in every country you wish. We know how tiresome and time-consuming it can be for business owners like you to cross-check legalities every time you go for an international hire or process payroll. Multiplier genuinely wants to remove the hurdle off your path. Our platform ensures 100% statutory compliance for you. No more worrying about legal policies. We keep an eye on them for you.

Our HR management process is entirely transparent, and you can monitor it easily with comprehensive, real-time reports through your your-friendly dashboards. 

Everything happens only after your approval. While we handle everything from payroll processing to tax filing on your behalf, the one-click feature of the platform allows you to take control over operations and signal us to go ahead with just a click.

Book a demo with us now.

Frequently asked questions

Who uses a global Employer of Record?

A global EOR can be used by a business of any size, that is looking to grow internationally and build global teams. 

How long does it take to onboard an international employee?

Traditionally, onboarding an international employee may take up to weeks to hire and onboard. An EOR service helps you onboard employees from multiple countries in just a few simple clicks. 

Is an Employer of Record legal?

Yes, partnering with an Employer of Record to hire international employees is completely legal. 

Hiring and onboarding using Multiplier ensures you hire remote talent with locally compliant, fool-proof job contracts, offer emphatic benefits and disburse salaries accurately with absolutely nil errors in payrolls.

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