Many people define an Employer of Record (EOR) as a third party entity placed in between the client and employee. The EOR carries out payroll and basic HR functions on behalf of the client, while managing legal and statutory requirements is one of the key tasks undertaken by an EOR.

While EOR is the registered employer for employee they do not undertake any supervisory, management or strategic role within the employee’s company whereas the employer makes all decisions pertaining to the employee however EOR might execute certain decisions made by the original employer. An EOR carries out many tasks which include arranging visa and work permit for employees, providing registered entity for managing a locally compliant payroll, equipped to meet country’s labor law pertaining to employee contracts and permits, advises the client on notice, pay and termination rules and be the mediatory between the client and government authorities. 

There are few things to be mindful of when looking for an EOR company before expanding. It is important to choose the right EOR partner when expanding to an unknown territory altogether.

Here are few questions that you need answers to from your potential EOR companies before signing an agreement.

  1. Are they equipped to run a local payroll in the host country with statutory compliance?
  1. Does the employment contract they use tally with your company’s interests?
  2. Have they worked with companies similar to yours so they are capable of understanding your needs?
  3. What is the EOR’s service history and performance record?
  4. What is their employee strength and team that they will assign you to?
  1. Is the EOR service the core business of the company, or is it one of the service offerings?
  2. What is the contract minimum length for your company and the notice period for termination?
  3. What other services do they offer apart from EOR?
  4. How are their fees and rates set, and what is the timing cycle for invoicing and payments?
  5. Can they give references and do they have any case studies?

Having answers to above questions will give you clarity on their services, experience and knowledge on EOR also give you a clear understanding on what sort of team and experts will manage your employees within the country.

Choosing the correct EOR is important not to fall into trouble specially because you are dealing with the country’s labor law and statutory requirements with many authorities. It is important to have a partner who will carry out the services efficiently and effectively while maintaining your company reputation.

If you are looking for an EOR partner within Asia, ExroAsia team can help you with your requirements. Schedule a session with our team to understand what services they offer to ease out your expansion.

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