What is an EoR?

Mis à jour le Monday 20 February 2023

In order to expand its business internationally, a company often has to call on employees abroad. In order to ensure that recruitment is carried out legally, it is worthwhile going through an Employer of Record (EoR). Here are the specifics of this particular hiring service provider.

EOR or employer of record, a three-way relationship

What is an Employer of Record (EoR)?

An Employer of Record is simply the international version of the French wage portage (portage salarial) company. In other words, its role is to provide companies with assistance and advice on hiring employees from all over the world.

An EoR is very useful for companies that want to deploy their activity in other countries of the world and find professionals, without having to create a specific legal entity. International portage is therefore a quick and economical solution, which ensures legal employment.

As in the case of wage portage in France, the EoR is the employer of the ported employee, but it has no management role towards said employee. It simply acts as the legal link between them and the client company.

What services does an Employer of Record (EoR) offer?

The main advantage of the Employer of Record (EoR) is the possibility of having recourse to professionals based abroad, without having to ensure a local legal presence, which is often time-consuming and costly to set up.

To this end, the employment service provider acts as a link between the consultant and the company, taking care of the legal and human resources tasks. Thus, the foreign professional is legally the employee of the EoR, but works for the client company. For its part, the international umbrella company is only responsible for payroll, taxation, social benefits, contract compliance and possibly advice to companies.

Apart from its legal and HR functions, the Employer of Record does not deal with the management of the employee, the allocation and verification of their daily work activities, or remuneration. This remains the role of the client company.

What are the Employer of Record’s different tasks?

Finally, the Employer of Record is responsible for the HR and legal aspects of the employment of the foreign professional. For this purpose, several missions are entrusted to it upon signature of an international portage contract:

  • Drawing up an employment contract between the EoR and the compliant foreign employee, in order to make the employee available to the local company;
  • Managing the payroll and remuneration of foreign professionals;
  • Taking charge of the salary benefits of professionals established in other countries (social contributions, taxes, collective agreement, etc.);
  • Dealing with freelancers based abroad;
  • Offering stock options to professionals across national borders, etc.

In concrete terms, an EoR can help a French company hire an employee in the United States, China, or anywhere else in the world. But it can also allow American entrepreneurs to find employees in another US state, for example.

As such, Payroll as an EoR, a legal employer or local employer of reference specialised in France knows the French legislation in detail and is able to employ any employee in the country, regardless of their situation.

Why use an EoR? 4 scenarios

Many professionals may decide to use an Employer of Record to develop their business. The reasons for this vary, depending on the challenges and objectives of the companies.

Cheffe d'entreprise souriante qui apelle au téléphone un EOR

Operating without a local legal entity

Legally, in order for a company to hire a professional in a country, it must have a local legal entity. In other words, it must be registered in the country in question. In practice, this legal act is extremely costly and can be very time consuming.

A company may then find that international recruitment is too expensive, even if it is a good prospect for business expansion. It also limits the possibility of employment to one country.

The EoR is important here, as it allows for the legal recruitment of international professionals without having to create a local legal entity. It also allows for the use of professionals from different countries.

Compliant and fast international recruitment

Remote working has never been more prevalent, removing the geographical barriers for recruiters to find talent from all over the world. The EoR is therefore an excellent opportunity for companies to develop by using the skills of professionals with highly targeted expertise. But it is also an opportunity to diversify its teams. Recruitment is then very quick and easy, as 100% remote working allows hiring without the need to move or to organise anything special.

In addition, the knowledge and skills of the international EoR ensure that employment is in accordance with the labour laws of the countries in question, and provide a clear and reassuring legal framework.

Converting freelancers into employees

Many companies use the services of freelancers or independent contractors to meet a specific need. While this makes it possible to benefit from the specific talents of these professionals, this type of contract also exposes them to various risks. Indeed, the freelancer is free to end a collaboration whenever they want, increasing the turnover rate, but the main problem lies in misclassification (a freelancer cannot work under the same conditions as an employee, and there is sometimes a fine line between the two).

So, to avoid having to change professionals too regularly, and to ensure perfect control of working hours, the EoR is an interesting alternative for workforce management. On the freelancer’s side, the ported employee status is reassuring, and does not deprive them of the advantages of self-employed status.

Being more flexible with employees

The pandemic has highlighted a strong desire on the part of employees to have more freedom to work in the working conditions of their choice. The emergence of the flex office, teleworking and remote working points to a trend that companies can follow, through an Employer of Record.

An international wage portage contract offers employees the possibility of enjoying a high degree of mobility, the freedom that the digital nomad dreams of.

If an employee wants to travel the world, then offer them this opportunity without having to do without their services, thanks to the EoR.

Ad’Missions has been an expert in the field of wage portage in France and throughout the world for over 20 years. We can help you with your expatriation or secondment projects, through our EoR services.


Rate this page
To Note
You have already given your opinion for this page
Your opinion has been taken into account