Employer of Record (EOR)

An Employer of Record (EOR) is a third-party organization that legally employs workers on behalf of another company. The EOR handles all employment-related legal responsibilities — payroll, taxes, benefits, compliance — while the client company directs the work.

EORs are commonly used for international hiring (employing workers in countries where the client does not have a legal entity), for hiring contractors who need to be converted to employees, or for managing workers in states where the client lacks a registered business presence.

While a PEO and an EOR both serve as employer of record, there are key differences: PEOs typically require a co-employment relationship and are best for ongoing HR outsourcing, while EORs are often used for more targeted or temporary employment arrangements.