5 Benefits of Working with an Employer of Record (EOR) to Hire in the US
An employer of record (EOR) is a third-party organization that serves as the legal employer for workers. An EOR can help your recruitment business hire in the US by reducing the time and risk associated with onboarding, payroll, compliance, and various administrative tasks.
The benefits of working with an EOR:
1. You can access the profitable US market without establishing a local business entity
EORs can provide recruitment businesses with the ability to expand into new markets quickly and cost-effectively, without the need for establishing a legal entity or hiring local staff. An EOR acts as the legal employer of your US workers, meaning your international recruitment company wouldn’t need a local entity to hire in the states. Setting up a legal entity in a new market can be costly and time-consuming in some cases, but companies can save the money and time associated with establishing an entity in a new region by working with an EOR.
2. An EOR can help ensure compliance with local regulations
The US has a complicated employment law landscape, with many Federal and state regulations that are always evolving. A trusted EOR will have expertise in local employment laws and regulations, which makes them a great compliance partner when hiring in the US. An EOR will monitor changes to local employment regulations and adjust their practices accordingly, so you’ll never have to worry about compliance.
One way that EORs track compliance is by collecting all required contracts and forms, such as employment agreements, tax forms, and I-9 forms. An EOR can also run compliant payroll and ensure all necessary insurances are in place for your US workforce.
3. Outsource payroll and employee benefits administration
Running payroll in-house is often time consuming and not cost-effective. Outsourcing payroll to an EOR can ensure that contractor payments are processed accurately and on time, and that all tax obligations are met.
An EOR can handle payment processing and all the compliance and administration burdens that come with it, including tax withholding, reporting, and filing in the US. Additionally, an EOR can offer workers benefits such as health insurance, retirement plans (401k), and workers’ compensation coverage.
4. EORs make it possible to scale quickly with less overhead
The costs that come with scaling a business in the US can be a significant barrier for recruitment businesses with limited resources or a smaller internal team. Working with an EOR can help your business quickly and easily expand into a new market without the costs of establishing a local entity or building out an internal infrastructure.
EORs often provide a tech platform, such as the streamlined LGWS platform. With this sort of technology, EORs can help businesses save hours of admin work by automating processes such as document collection and compliance tracking for their entire US workforce. This allows recruiters to focus on customer and talent acquisition, rather than spending valuable time on manual admin for every placement.
Recruitment businesses can leverage the systems, technology, and expertise that an EOR already has in place to scale efficiently and stay competitive in new, profitable markets.
5. Get support and guidance from experts
Working with a trusted team of experts will make hiring in the US much easier and more efficient. Some EORs, such as LGWS, specialize in supporting recruitment companies and have specific knowledge with hiring contractors or internal employees in this capacity in the states.
Due to the unique legal regulations, registrations, cultural differences, and more when operating in the states, it’s extremely beneficial to get guidance from experts on all matters throughout every step of expansion. An EOR should be able to answer many of your compliance queries and give guidance on best practices in new markets!
Disclaimer: This post is provided for informational purposes and should not be considered legal advice, the final word on this topic or a political opinion.