One of the most noticeable distinctions between an EOR and a PEO is who is the legal employer of their employees. As a result of the second, you’ll have a co-employment arrangement, which implies your company will be the legal contractor. As a result, you are legally liable for your employees, while the company just assists with HR duties.
An Employer of Record, on the other hand, is the person who employs the employees and acts as their legal representation. Even though they work for you, the workers sign a contract with the company that offers the services in this scenario. You are, however, still in charge of setting your employees’ compensation and evaluating their performance.
However, the EOR, as a legal employer, can make the hiring you need in any place where it is established. Moreover, most employers of record can offer companies Human Resources services. Also, based on this main aspect, the following differences arise.
With certain constraints, a Professional Employer Organization handles your company’s Human Resources needs. They can, for example, manage employee onboarding, assessments, and other associated activities. While a PEO can assist you in improving the hiring process, it is your company’s responsibility to manage employment.
The Employer of Record, on the other hand, can assist you in streamlining the recruiting and management of employees. They are also, as you can see, legitimate employers that oversee all of their workers’ work. They do this for both small and large enterprises aiming to develop internationally.
