If your company is expanding globally, you’re going to want to know how to hire and pay your remote teams. Read on to discover your international remote hiring solutions by using an employer of record (EOR) and how your company can hire remote employees almost anywhere in the world, manage payroll, and administer benefits, all without having to establish any legal entities in any of the countries in which you hire.
Why Partner With Skuad For EOR Services?
Skuad is a global HR and payroll outsourcing platform, allowing your company to hire remote talent anywhere in over 160 countries across the globe. With EOR services, remote employees can be hired and onboarded with the employer of record being the legal employer on paper while your company retains full control of your workforce.
Timesheets can be tracked, payroll can be run securely with a single click, and statutory benefits administered to your workers, all while you remain fully compliant with the country’s labor laws.
By 2027, Skuad expects to have offered over a million job opportunities, all over the world, and all hired remotely. These globally diverse remote teams will have been hired with the help of Skuad’s two decades of HR experience as a reputable employer of record and remote employment expertise. If your company is hiring overseas, contact us today to see how we can help.
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What Is an Employer of Record?
An employer of record, or an EOR, is an outsourcing and payroll solution for companies hiring globally. When hiring globally, your company has several options. The first option is that your company can set up a legal entity in the country and then you can legally hire employees in that nation.
Some countries may not require registration but many require it for hiring purposes. This can be cumbersome and expensive, especially if your company is expanding all over the world and hiring in many countries.
Employer of Record
The other option your company has to expand globally is to partner with an employer of record. In this situation, the employer of record would be the legal employer of your employees on paper, meaning your company does not need to be registered as a legal entity in the country of the hires. The EOR services would also include signing employment contracts, payroll, benefits, tax management, and compliance.
Professional Employer Organization
Another option for having remote employees on your payroll in another country other than the country in which you’re headquartered is to partner with a co-employment arrangement with a professional employer organization (PEO). After your company is set up, your company can then use the professional employer organization to handle certain human resources responsibilities.
These HR tasks include paying employees, deducting and remitting taxes, taking care of employee and employer contributions, and administering benefits. In this situation, your company would need to be duly registered as a legal entity in a country before you can hire employees.
Differences Between an Employer of Record and a Professional Employer Organization
An employer of record would be the legal employer of your employees on paper while your company still retains actual control of the workforce. An employer of record can handle the hiring, onboarding, safety training, payroll, and benefits administration for your employees. Legal employment contracts can be written by and enforced by employers of record.
A professional employer organization can take care of certain HR activities such as payroll management. In that case, your company would be registered in the country and would enter into employment contracts with the employees. A professional employer organization would be a co-employment arrangement where your company would share in some HR responsibilities.
Hire Remote Employees in Over 160 Countries
A major benefit to using an international employer of record is that your company can hire in numerous countries without having to have a legal entity in any of the countries. Skuad’s legal team will also keep on top of changes in labor laws so that your company will always be legally compliant.
Your company's payroll management can be handled by an employer of record. Payroll must be accurate and timely to stay compliant with the local laws and to treat employees properly to retain top talent. Time sheets and employee shift hours worked can be tracked with the help of biometric devices. Accurate payroll is then calculated for each employee.
As part of payroll, taxes and employee contributions are deducted, depending on the country’s laws. For example, in some countries, both employee and employer make contributions to social security, pensions, and various insurances such as unemployment insurance, disability insurance, and other payments toward statutory benefits. When payday comes, the bank is sent remittance advice to deposit employee salary payments.
Global Hiring Benefits
Statutory benefits are benefits that are mandated to be given by the employer to employees by law. The specific requirements of these statutory benefits are defined in a country’s labor statutes.
Some examples of mandatory benefits are:
- Mandatory leave entitlements such as annual leave, paid holidays off, maternity leave, paternity leave, adoption leave, and sick leave
- Other leave entitlements based on national laws such as bereavement leave, study leave, marriage leave, care leave — caring for family members, job advancement leave, and other types of leave
- Social security
- Health insurance
Other mandatory benefits may be required to be offered depending on the country.
Supplemental Benefits and Perks
In addition to benefits mandated to be given to employees by law, a company can go above and beyond the benefits they are legally required to give to employees by offering additional benefits and perks to their remote employees to provide what a local team of employees may expect to be given and in an effort to attract and retain top talent.
Some of these supplemental benefits may include additional insurances such as employer-provided health coverage, dental coverage, optical coverage, additional pensions, ergonomic equipment allowance, a high-speed internet connection, gym memberships, meal allowances, and more.
One of the most important duties of an employer of record is to ensure your company is fully compliant with the local labor laws. No matter which country you’re hiring in, the employer of record needs to be on top of the labor laws of that specific country as well as stay on top of any changes in the legislation. Laws are liable to change at any time, and if a law changes and your company is not adapting to that change, you run the risk of not being compliant.
Some examples of specific laws in labor statutes:
- Anti-discrimination laws for hiring and employing employees
- A mandatory minimum amount of leave for the employees such as annual leave
- Minimum wage
- Standardized working hours
- Termination rules such as notice periods and severance payments
These are just a few examples of many potential laws. It’s essential for your company to know the labor laws in every country where you will hire. If your company is not taking care of compliance, then you will want to partner with an employer of record like Skuad who has legal experts who know the local laws and can draft legally compliant contracts, administer statutory benefits, pay your employees properly, and keep your company compliant.
Risks of Non-Compliance
The risks of being found in non-compliance by a local country’s authorities vary by each country and can result in fines or prosecution for fraud in some cases. Some of the legal trouble a company can commonly get into involves the misclassification of employees as contractors. In most cases — and in most countries — independent contractors are not protected by labor laws, nor are they entitled to mandatory benefits. Companies also do not pay the contractor’s portion of social security which sometimes is covered by employers.
This means that a company would save money by misclassifying its workers as contractors. Whether the misclassification was intentional or accidental, government authorities may punish a company that has misclassified its employees by issuing fines, requiring the company to pay back pay and benefits, and even potentially prosecute them for fraud.
Labor Laws By Country
Labor legislation is a complex subject. Laws vary by country, and within each country, they can also vary by region, state, province, or locale. Laws are also subject to change and may be updated at any time. Your company may not be aware of the changes and could run the risk of non-compliance.
Hiring internationally can be difficult, complex, and risky, especially if your company doesn’t have a legal entity set up in each country or a team of legal experts in that country who can keep your company compliant with the law. That’s where an employer of record comes in. Your company may be expanding globally and might want to hire remote teams in numerous countries across the globe. It would be costly and difficult to establish a legal entity in each country. An employer of record like Skuad can help you hire remote employees in over 160 countries. That means you wouldn’t have to set up a legal entity in any of those countries.
The employer of record would:
- Hire and onboard new employees
- Be the legal employer of your workers on paper
- Take care of benefits administration
- Manage payroll, including taxes and contributions
- Keep your company legally compliant
By now you can see that an employer of record can handle a lot of human resources tasks and responsibilities, alleviating your need to establish legal entities in the countries you hire in and being your employee’s legal employer on paper, while your company retains full control of your workforce.
Start hiring for free today. Get your first employees in minutes. Cancel any time with no commitment required. To see how Skuad can help your company hire remote talent anywhere in the world, in over 160 countries, book a demonstration to see how we can offer your company employer of record services.