Global HR Glossary

What is Employer of Record Software?

Employer of Record (EOR) software is a specialized service platform that allows businesses to outsource the complexities of employment, payroll, and compliance responsibilities. It acts as the legal employer for staff, handling all HR functions including payroll, benefits, and compliance with local employment laws, particularly for international hires. 

Functionality and Benefits of EOR Software 

An EOR enables companies to hire employees in jurisdictions where they do not have a legal entity. This is particularly advantageous for companies looking to expand internationally without establishing local offices. Key benefits include:

• Streamlining the hiring process across different countries.
• Ensuring compliance with local labor laws and tax regulations.
• Managing payroll and employee benefits efficiently. 

For instance, a U.S. company can employ a remote developer in Germany using EOR software, which will handle all local legal and payroll challenges, thereby facilitating global workforce management.