What does it mean to be the Employer of Record?

An Employer of Record hires talent on your behalf and becomes their legal employer. This solution uses compliant employment contracts to hire and onboard your talent. Your EoR partner handles all compliance and risk mitigation, and oversees payroll and benefits.

What is the difference between PEO and EoR?

The primary difference is an Employer of Record (EoR) is the full legal employer of a company’s distributed workforce, while a Professional Employer Organization (PEO) acts as a co-employer.

An Employer of Record handles country- and state-specific onboarding, payroll compliance, payroll, taxes, benefits, unemployment claim reporting and other human resources tasks for small to large businesses.

A Professional Employer Organization (PEO) partners with small and medium-sized businesses, providing comprehensive HR services and acting as a company’s outsourced HR department.

Why should we use an Employer of Record?

An Employer of Record (EoR) allows companies to establish a new presence in domestic and international markets without the restrictions and complexities of setting up entities or state registrations. Velocity Global becomes your Employer of Record (EoR) and hires members of your distributed team on your behalf through local, compliant employment contracts.

Through an Employer of Record, you can hire top talent across the globe, bypass additional state registrations or entity establishment, and offer 24/7 support to your distributed workforce.

Who should use an Employer of Record?

An Employer of Record is often a great option when looking to hire a distributed workforce, regardless of company size or industry. We find companies are a great fit for EoR when they:

Need to expand team size in new markets,
Is it where.
Do not want to set up a new entity or register their business in another state
Are looking for a streamlined employment solution to manage compliance, payroll and benefits for their entire distributed workforce
Will an Employer of Record hire candidates for me?

Yes, we use locally compliant employment contracts to hire new members of your global team and become their legal Employer of Record (EoR).

Why use an Employer of Record instead of paying a worker as a contractor?

Employee Misclassification is a considerable risk that can possibly result in severe fines and penalties. It should be noted that if the employer manages an employee’s day-to-day responsibilities, or if the employee reports only to that employer, the employee is not a true consultant.

Will you pay/deduct taxes from the supported employee’s payroll?

Yes, we follow all local tax laws in their region and will withhold individual taxes on a monthly basis.

Do you assist with paying the necessary contributions in-country?

Our monthly invoices include mandatory taxes and other payments that are required by local governments for employers to pay into social security and other public programs. Our local experts provide an up-to-date report on the payment schemes in each country, calculate the amount due based on the supported employee’s salary, and provide a detailed breakdown in your invoice.

Do you charge fees for offboarding?

No, there are no fees for termination, but we do require 30 days’ notice to offboard any client. Keep in mind, the statutory notice period for the supported employee in a given country may be longer than 30 days by law. Some countries have unique mandatory severance periods and payouts, which our team helps you navigate.

Do you broker a deal with local partners, or are you involved through the entire Employer of Record process?

Our clients and supported employees rely on our global network of experts, which allows us to manage and control our customers’ experience. Our clients and supported employees are provided with a personal Client Account Manager to help navigate time zone, cultural, and language-appropriate contact.

Our regional teams actively remain up-to-date with any local employment law changes and perform quarterly reviews to ensure compliance with these laws.