The What, Why, and How of an Employer of Record

“Spend time upfront to invest in systems and processes to make long-term growth sustainable.” – Jeff Platt

As a small to medium business, HR responsibilities can be time-consuming and costly. The compliance aspect, in itself, can be both difficult and stressful. That is where an employer of record can make a compelling difference.

An employer of record serves as the employer for tax purposes while the employee performs work at a different company. The employer of record takes on the responsibility of traditional employment tasks and liabilities.

For example, Company A contracts with an EOR. Company A’s employees are placed on the EOR’s payroll. The EOR is now responsible for payroll, benefits, taxes, and a variety of other HR functions. The EOR ensures that every aspect is compliant with government regulations. However, while the EOR becomes the employees’ primary employer on paper, Company A remains in control concerning day-to-day functions. They assign responsibilities, provide instruction, allocate working hours, and set expectations. The employees are still considered workers for Company A, who retains control over business operations. Company A also retains responsibility for workplace safety and compliance.

The Benefits –

Cost Savings

An employer of record is a cost-effective way to outsource payroll and HR functions. The business pays the employer of record a set rate for every hour the employee works, and the employer of record handles all tasks.

Time Savings

The EOR handles back-office HR services, including:

  • Fields all communication regarding personnel
  • Processing and funding payroll
  • Depositing and filing taxes
  • Issuing Forms W-2
  • Collecting and processing timesheets
  • Creating and maintaining employment contracts
  • Maintaining certificate of insurance
  • I-9 Forms

  • Complying with E-Verify

  • Conducting background checks and drug screenings

  • Administration of benefits

  • Managing unemployment

  • Managing workers’ compensation

  • Employee termination


Employer of record services can be especially helpful when dealing with payroll processing and employment laws for employees in multiple states. The EOR takes on the responsibilities for fulfilling both federal regulations and state guidelines, which vary from state to state. An EOR stays up to date on laws, so you don’t have to stress over compliance.

When a company hires employees internationally, connecting with an EOR is crucial. An EOR will often have entities in a variety of countries. Their clients can trust an EOR to know the regulations from country to country.

Choosing the best EOR for your company –

When choosing an EOR, remember that you have options, not only concerning which EOR you contract with, but also which services you need. Take the time to evaluate multiple options.

Create a list of questions to ask before signing on the dotted line. A few questions to get you started are:

  • Can I pick and choose the services I need?

  • Can I customize the services I need?

  • What is the payment structure?

  • Will I have a representative available to call and ask questions when needed?

  • Does the EOR have experience in the states (or countries) in which I have an operation?

Bluebox Creative Solutions can help. We are a consulting firm with expertise in staffing and human resources that are critical to companies large and small. We have dedicated professionals with decades of experience, and we understand the challenges you the Employer face on a day to day basis. Bluebox Creative Solutions has partnerships with viable Employer of Record entities. We help you connect with the best choice for your company. Contact us today at (732) 921-2105.