If you are thinking about international expansion into Europe, you have probably heard of an Employer of Record (EoR). An EoR is a popular HR outsourcing solution for companies that are expanding globally and do not have the time and resources to stay on top of complex local regulations regarding payroll, taxes and benefits. A European EoR is a way to employ people without having your own company or entity in that specific country. In this blog, insights are given on how an EoR in Europe can add value for your European expansion.
What is an Employer of Record?
The acronym EoR stands for Employer of Record. An Employer of Record (EoR) is a third-party organization and/or local entity that acts as an intermediary between an employer and an employee. The EoR provider is the legal employer of record of the hired employees. As a result, the EoR takes all the responsibilities and liabilities concerning employment in the specific country. The EoR hires and pays an employee on behalf of another company.
What is a European Employer of Record?
A European Employer of Record, is a EoR provider with a local entity or multiple entities throughout Europe that can act as the intermediary between an employer and an employee. EuroDev, as an example, employs employees throughout Europe on behalf of North American SMEs throughout Europe that do not have an office in the specific European country.
What does an Employer of Record do?
The employer of record takes care of the legal and regulatory requirements that come with employment in a foreign country. Legally, your staff is employed by the EoR, but you are still responsible for the management of the employees. Activities of an EoR include:
- Payroll management
- Employment contract setup
- Tax advisory and management
- Benefits management
- Contact and agreements with local authorities
- Set up and registration of local entities for a compliant payroll
- Local insurances
- Termination and dismissal
- HR advisory (if necessary)
Why use an Employer of Record in Europe?
There are several reasons for businesses to use an Employer of Record in Europe. Hiring an EOR gives the company the opportunity to manage their time more efficiently and effectively. An Employer of Record allows companies to legally and efficiently engage with overseas employees in a new country, without having to set up a local entity or risk violating local employment laws. Every European country has different local employment and payroll regulations. The challenges of meeting the local rules and regulations can be a major obstacle to international business expansion.
Benefits of using an employer of record
- Expand without a local entity
- Flexible and cost-effective solution to outsource payroll and HR functions for international expansion
- In compliance with foreign local laws & regulations
- Minimizes employment liabilities and risks
- Let's you focus on your core business
- You manage your employees
- EoR takes care of registration and contact with local authorities
- Reduced risk, as the risks of being an employer fall almost completely on the employer of record
EuroDev brings additional benefits as an EOR as we have over 21 nationalities within our company. Our European HR and Financial consultants are well aware of the European cultures, languages and rules & regulations.
Who uses an EOR?
An EOR is often used for global expansion when a company plans to conduct business activity in a new country without a physical entity. Any business can find value in an EoR relationship. Mostly, SMEs are using a EoR as often they do not have the necessary resources to do it themselves. EoRs can add value for businesses in any industry ranging from accounting firms to high-tech companies and small manufacturers.
Guidelines for choosing an EOR in Europe
- Meet the people who will be serving you and make sure the EoR is capable of meeting your goals.
- Check the reputation of the Employer of Record
- How long have they been in the business? Have they worked with similar clients to you?
- Ask for client- and professional references.
- Check their servicing model
- Can they provide the care and attention you need?
- Is their servicing model customizable?
- Do the business owners lose control of their business when they work with an EOR?
- No, the business owner retains ownership of the company and control over its operations. EoR only has an administrative role and will not interfere with the daily work or management of staff.
- What is a global EOR or European EOR?
- A global or European EOR is an outsourced back-office administrator for companies with international employees. In short, Employers of Record place their clients' international staff on their own EOR payroll
In case you would like to have more information, do not hesitate to connect with Monique Ramondt-Sanders - VP of Human Resource Outsourcing at EuroDev. Interested in more information concerning our HR Outsourcing services? Please have a look at our HR Outsourcing page.
EuroDev, established in 1996 with offices in The Netherlands and France, has a single, defined purpose to help mid-sized North American companies expand their business in Europe. We have created a proven, successful business development model and since our founding, have partnered with over 300 companies to help them define and meet their European business goals. Services provided include Sales Outsourcing, HR Outsourcing and Digital Marketing.