A Practical Guide to Managing Employer of Record Risks for HR and Legal Leaders
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As businesses expand into new markets, hiring across borders has become more common. One solution that helps simplify this process is the Employer of Record (EOR) model. By serving as the legal employer for workers in other countries, an EOR takes care of contracts, payroll, taxes, and compliance with local labor laws. While this can simplify the process of international hiring, it's not risk-free. HR and legal leaders need to understand and deal with employer-of-record risks. Though much of the operational burden falls to the EOR, the company retains responsibility in the eyes of employees—and sometimes, the law. Who’s the Employer? An EOR may be the legal employer on paper, but employees report to and interact with the client company in practice. They follow its policies, contribute to its goals, and are seen by coworkers as part of the team. This setup can create confusion around who holds real authority. If an issue arises—like a di...