Employer of Record
A third-party organization that legally employs workers on behalf of another company.
Also: EOR
Definition
An Employer of Record (EOR) is an organization that serves as the legal employer for workers on behalf of a client company, taking responsibility for employment contracts, payroll processing, statutory compliance, benefits administration, and tax filings in the relevant jurisdiction. EORs are increasingly used to hire employees in countries where the client company does not have a legal entity, enabling rapid and compliant international expansion. They differ from staffing agencies in that they support permanent or long-term employment arrangements.
Example
“To hire software engineers in Germany without setting up a local entity, the startup used an Employer of Record service that ensured full compliance with German employment law, social contributions, and data protection requirements.”
Synonyms
- registered employer
- co-employer
- payroll employer