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What is an Employer of Record and an EOR?

Post by TCWGlobal
March 10, 2023
What is an Employer of Record and an EOR?

Have you ever heard of an Employer of Record? An EOR is like having a personal concierge for all your employment needs. They take care of all the administrative work involved in hiring and paying workers, including employee benefits and payroll. It’s like having a wedding planner for your workforce.

  • Just like a wedding planner, an EOR is your one point of contact, working behind the scenes to make sure everything runs smoothly.
  • They handle all the paperwork, manage vendors, and ensure that you’re getting the very best service for your money. They’ll even manage your I-9 verifications, drug tests and payrolling services.

With an EOR, you can sit back and relax, knowing that all your employment needs are taken care of.


What is an Employer of Record / EOR?

Once there was a startup company that had a brilliant idea for a new app. The founders were young and ambitious, and they quickly put together a team of talented engineers and designers to bring their idea to life. Everything was going well, and the company was growing fast.

However, the founders were so focused on building their product and attracting investors that they neglected some important details, such as complying with labor laws and regulations. They hired a few contractors to help with development and marketing, but they didn’t have anyone in charge of HR or legal matters.

One day, one of the contractors they had hired filed a lawsuit against the company, claiming that must have been misclassified as an independent contractor instead of an employee. She argued that the company had misclassified her to avoid paying benefits and taxes.

The company was caught off guard and didn’t have anyone in-house who was familiar with employment law. They had to hire expensive lawyers to defend themselves in court, and the lawsuit dragged on for months. In the end, they settled with the contractor for a large sum of money, which hurt their finances and their reputation.

After the lawsuit, the founders realized that they needed to take employment matters more seriously. They decided to hire an employer of record (EOR) to handle their HR needs, including hiring, onboarding, payroll, benefits, and compliance. The EOR helped the company avoid future legal troubles and ensured that all workers and contractors were properly classified and compensated.

In retrospect, the founders realized that it would have been much better to have an EOR from the beginning. It would have saved them a lot of time, money, and stress. They learned that while it’s important to focus on building a great product and attracting customers, it’s also important to have a solid legal and HR foundation in place.

So what exactly is an Employer of Record / EOR?

An Employer of Record (EOR) is a superhero of sorts, with the power to manage the employment-related details for a worker or group of workers for your company.

  • From the overseeing of paying salaries, bonuses, and other forms of compensation, to withholding and paying taxes on behalf of workers at your company, an EOR takes care of all the payroll stress.
  • But that’s not all! They also provide benefits like health insurance, retirement plans, and legally compliant paid sick leave/compulsory paid time off, and ensure that all employment-related policies and procedures comply with local, state, and federal laws so you don’t have to.

They are the ultimate compliance champions!

In short, if it has anything to do with managing the onboarding, legal compliance and, other related HR efforts of your workers, you can bet an EOR has you covered. If you’re unsure where something fits into this category, just ask the EOR, because they know almost everything there is to know about managing workers like a pro!

Like a skilled wedding planner, the EOR is also responsible for managing any hiccups that may arise from the employment relationship.

For example, if your workers have any concerns about their pay or working conditions, the EOR will act as a mediator and address these issues promptly, just like how a wedding planner would quickly resolve any unexpected issues during the ceremony or reception.

After all, the last thing you want on your big day, or in the workplace, is for something to go wrong and create unnecessary stress! With the EOR on your side, you can relax and focus on the big picture, knowing that they will take care of the details.

What exactly does an Employer of Record do?

For companies that want to hire workers without the hassle of managing day-to-day work, working with a company that provides employer of record services may be a great solution.

  • An EOR is the full legal employer of the workers employed through them, which means they handle all employment offers and documentation, HR related services, and manage payroll taxes, while also ensuring compliance with employment, federal, state and local laws and regulations from employment regulatory agencies.
  • Additionally, the EOR provides the worker their compensation and health insurance.

So, if you’re looking to hire workers without becoming a full legal employer, consider working with an EOR to take care of the day-to-day work, and let them handle all the details of managing your workers.

How does an Employer of Record make your life easier?

An employer of record is a great tool for employers to use when it comes to payroll, compliance, and HR management. If you don’t want the hassles and heavy lifting that comes with understanding every little employment law, hiring or expanding an expensive HR department, or even the stress of hiring or terminating workers, then an employer of record is perfect for you. Every kind of big to small company can benefit by using an employer of record.

Payrolling Services

With an EOR in place, you can pay workers directly without having to worry about withholding taxes or making payments on their behalf. This saves time and money because there are no administrative costs associated with payroll processing; it’s all done by the EOR.

  • Compliance: Companies who take care of their own tax withholdings have less room for error than those who outsource this responsibility — and if you mess up one day? You could be liable for all the fees and fines associated with your mistake. Hiring an EOR company, such as TCWGlobal, will assure that you are always in compliance and operating within the latest wage and hour laws.

An EOR will eliminate any chance of errors in this department by handling all withholdings itself so that you never have anything more complicated than filling out the initial order and reviewing the worker’s timecards.

Benefits Administration

There are two main reasons why benefits administration should be handled by an employer of record:

  • Because it requires specialized knowledge most people don’t possess.
  • Benefits plan requirements vary widely enough across industries and state — that having someone familiarize themselves with yours could lead them down an incorrect path when setting up group coverage options such as medical plans or disability insurance policies.

An Employer of Record can help you stay compliant

When you use an EOR, they’re responsible for filing all the necessary onboarding paperwork. You don’t have to worry about doing it yourself, and if you’re already doing payroll and HR in-house, this can be especially helpful.

A company like TCWGlobal knows that compliance is critical when it comes to payroll and human resources processes.

Our team will help ensure that your company stays up-to-date with local, state and federal laws so that no one gets into trouble over something silly like not paying workers adequately (or at all).



An Employer of Record can be great support for your HR department

As a business owner, you know that hiring is a complex process. You have to make sure you find the right person for the job (this is the sign you were waiting for) — and then ensure they are treated fairly and paid accurately. The last thing you need is more paperwork on top of all this!

With an EOR in place, they will directly manage your workers’ payroll information and compliance requirements such as I9 documentation, background checks and more. You’ll also be better able to control your legal liabilities around payroll taxes, as well as being able to track worker hours through time tracking software. Messing this up in some states could cost you big time.


If you’re looking for a turn-key solution to help keep you manage all things contingent workforce and keep your HR department in compliance, TCWGlobal can be that resource.

Your Next Steps

A contingent workforce can bring a wealth of benefits to a company, allowing organizations to tap into the skills and expertise of top talent when they need it most. A contingent workforce, which may include independent contractors and temporary workers can offer numerous benefits to companies.

Employer of Record (EOR) services are designed to make the process of hiring workers more streamlined and efficient for client companies.

By working with an EOR, client companies can leave the day-to-day work of managing employment offers, filing taxes, and providing workers’ compensation and health insurance to the EOR.

Additionally, EORs handle the payroll taxes and other legal responsibilities of employment so that client companies can focus on their core business activities.


Need Help?

Whether you need expertise in Employer of Record (EOR) services, Managed Service Provider (MSP) solutions, or Vendor Management Systems (VMS), our team is equipped to support your business needs. We specialize in addressing worker misclassification, offering comprehensive payroll solutions, and managing global payroll intricacies. 

From remote workforce management to workforce compliance, and from international hiring to employee benefits administration, TCWGlobal has the experience and resources to streamline your HR functions. Our services also include HR outsourcing, talent acquisition, freelancer management, and contractor compliance, ensuring seamless cross-border employment and adherence to labor laws. 

We help you navigate employment contracts, tax compliance, workforce flexibility, and risk mitigation, all tailored to your unique business requirements. Contact us today at or email us at to discover how we can help your organization thrive in today's dynamic work environment. Let TCWGlobal assist with all your payrolling needs!


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Post by TCWGlobal
March 10, 2023