For recruitment firms expanding into the United States, choosing the right Employer of Record in the U.S. is not a box‑ticking exercise, it’s a commercial and risk‑critical decision. The wrong EOR can limit the types of workers you place, expose you to compliance gaps, or leave you uninsured in high‑risk placements. The right one becomes a true growth partner. 

What Is an Employer of Record in the U.S.? 

An Employer of Record (EOR) in the U.S. is a third‑party organization that legally employs workers on your behalf. While you remain responsible for sourcing, and client relationships, the EOR takes on the legal employment responsibilities, including: 

• U.S. payroll and tax withholding 

• Federal, state, and local employment compliance 

• Employment contracts and onboarding 

• Benefits and statutory coverage 

• Workers’ compensation and other required insurances 

For recruitment firms, an Employer of Record in the U.S. enables you to place candidates quickly without setting up a U.S. entity, while remaining compliant across jurisdictions. 

Why Choosing the Right Employer of Record in the U.S. Matters for Recruiters 

The U.S. is one of the most complex employment markets globally. Laws vary by state, industry, and worker type, and penalties for non‑compliance can directly impact both margins and reputation. 

For recruitment firms, a strong Employer of Record in the U.S. helps you: 

• Place candidates compliantly and fast across multiple states 

• Support different worker models (permanent, contract, temporary) 

• Reduce liability exposure with proper insurance coverage 

• Scale placements without operational bottlenecks 

A Buyer’s Checklist: How Recruitment Firms Should Choose an Employer of Record in the U.S. 

1. Do you operate in the states and regions where we place talent? 

It may sound obvious, but not all EORs operate nationwide. Some only support specific states or rely on third‑party partners, which can introduce delays and risk. 

For recruitment firms, this matters when clients want flexibility on location, when candidates relocate, and when you want to access a broader talent pool beyond your or your client’s state. 

Checklist question: Do they support hiring and placements across all required states without limitations? 

2. What types of workers can you support? 

Not all Employer of Record providers are equipped to handle every worker model. In the U.S. you’ll encounter the following worker types:   

• W2 Employees  

• Independent Contractors (1099) 

• Corp-to-corp 

• T4 – Canadian Employees if you wish to break into the Canadian market also 

• Foreign Corps & Foreign Independent contractors to work on US projects 

Each category comes with different tax, payroll, and compliance requirements in the U.S. 

Checklist question: Can this Employer of Record in the U.S. compliantly support the exact worker types we place today, and those we may place in the future? 

3. Can you ensure full compliance with U.S. tax and employment laws? 

U.S. employment compliance goes far beyond federal regulations. State‑level rules around overtime, pay frequency, classification, and termination vary significantly. 

A reliable Employer of Record in the U.S. should: 

• Track federal, state, and local legislative changes 

• Run fully compliant payroll 

• Support with all required tax documentation 

• Collect and manage compliance documentation 

Checklist question: How does the EOR actively manage ongoing compliance risk for recruiters operating across multiple states? 

4. Can you support our business as we scale? 

Recruitment firms rarely stay static. As placement volumes grow, the demands on your Employer of Record in the U.S. will increase. 

Look for an EOR that: 

• Scales smoothly with placement volume 

• Offers flexible commercial models 

• Aligns with your long‑term growth strategy 

• Works with trusted partners that support cash flow and risk management 

For example, partnerships with invoice‑factoring providers can be game‑changing for recruitment businesses, particularly startups or firms managing long payment terms. 

Checklist question: Is this Employer of Record in the U.S. equipped – and commercially aligned – to grow with us? 

5. How user‑friendly is your platform? 

Operational efficiency matters in recruitment. A strong Employer of Record in the U.S. should provide a platform that simplifies onboarding and offboarding, timesheet approvals, payroll visibility and compliance documentation. 

Most EORs should be willing to provide a live demo. 

Checklist question: Will this platform make placements easier, or create additional admin for our team? 

6. Do you provide essential insurance coverage, including high‑risk and marine‑related policies? 

Insurance coverage is one of the most overlooked, but critical factors when choosing an Employer of Record in the U.S. 

Standard workers’ compensation may not be sufficient for all industries. Recruitment firms placing talent in higher‑risk environments, such as logistics, manufacturing, or marine‑related roles, need to ensure the EOR can provide industry‑appropriate workers’ compensation and any additional liability coverage where required. 

Does Your EOR Offer These Essential Insurance Coverages? 

Not all EORs offer this level of coverage, and gaps can expose recruiters to significant financial risk. 

Checklist question: Can they provide all essential insurances required for our placements – including exceptional or high‑risk circumstances? 

Red flags for recruitment firms choosing an Employer of Record in the U.S. 

• Limited support for contract or temporary workers 

• Inadequate or unclear insurance coverage 

• Lack of state‑specific compliance expertise 

• Technology that adds friction rather than efficiency 

• EOR platforms weren’t built for staffing firms but rather designed for traditional employers. 

How Lead & Gain Supports Recruitment Firms Using an Employer of Record in the U.S. 

At Lead & Gain, we work closely with recruitment firms navigating U.S. expansion and placement complexity.  

Unlike generic EOR solutions – often built for in-house HR teams – our approach reflects the realities of fast-moving recruitment businesses managing multiple clients, worker types, and payment cycles. 

Our team brings first-hand recruitment experience, so we understand the commercial pressure, compliance risk, and operational challenges that come with scaling U.S. placements. 

If you’d like to explore whether Lead & Gain is the right Employer of Record in the U.S. for your recruitment business, get in touch with our team today.