Employer of Record Frequently Asked Questions

Employer of Record is when us, Polyglot Group, employ on your behalf an employee working for your business.

This employee will benefit from all the working rights of a permanent employee at Polyglot Group. Therefore, unlike a contractor, the employee will be able to accrue annual, personal and long service leave during their tenure, while still working for your business.

While some of the core elements are similar, an Employer of Record is slightly different from a Professional Employer Organisation (PEO). In short:

An EOR becomes the legal employer of the workers, while a PEO enters into a co-employment relationship with the client company (you!).

As a Professional Employer Organisation (PEO), a company provides a range of employment-related services to client companies, including HR, benefits administration, and payroll management.

One of the services that a PEO (like us!) offers is Employer of Record (EOR) services. In practical terms, this means that we become the legal employer of the workers, handling all administrative tasks related to employment, such as onboarding, payroll, taxes, and benefits administration. Essentially, we take care of the paperwork and compliance requirements, while you retain control over the workers’ job duties and responsibilities.

So, while your PEO offers a range of employment-related services to clients, including HR, benefits, and payroll management, the EOR service specifically involves taking on the legal employer role for the workers. This can be especially useful for clients who need to hire workers quickly in a new location, as it can help to streamline the administrative and legal processes involved in setting up new employees.

There are several reasons why a company might choose to use an Employer of Record service. Some common reasons include: 

• simplifying HR and payroll processes, 
• reducing administrative burdens, 
• minimising legal and compliance risks, and 
• expanding into new markets without setting up a legal entity.

But also:

• in times of recruitment and headcount freezes. 

Through a round-about solution, as a Professional Employer Organisation provider, we take on the vast majority of employment responsibilities and any hired staff will be recognised as an employee of Polyglot Group. 

Through this solution, the staff will not be part of your payroll and as such won’t be considered part of your headcount. Instead, their salaries will appear as a business expense that is paid through a single invoice by your company.

When you engage in an Employer of Record service, your employees become employees of the EOR, but they continue to work for your company.

The EOR takes care of payroll processing, tax withholding, and other HR-related tasks, while you retain control over the day-to-day management of your employees.

Some key benefits of using an Employer of Record service include:

•  reduced administrative burdens, 
• improved compliance with employment laws and regulations, 
• access to HR expertise and resources, and
• the ability to expand into new markets more quickly and easily.

When choosing an Employer of Record service provider, it’s important to consider factors such as cost, experience and expertise, reputation, and the specific services and support offered by the provider.

You may also want to seek out recommendations, read reviews and case studies from other companies that have used the service.

The cost of an Employer of Record service can vary depending on factors such as the number of employees you have, the specific services you require, and the provider you choose. Some providers charge a flat fee per employee per month, while others charge a percentage of the employee’s salary.

Depending on your business model and what you’re after, one may be more convenient than the other.

A flat fee model will enable you to plan and budget accordingly, whilst the 2nd option will depend on the number of staff you hire and their salaries.

Although it’s natural to assume a flat fee is cheaper, don’t be fooled as it could involve extra or additional costs (what we call “hidden costs”). To prevent nasty surprises, we recommend asking the following when discussing pricing:

• What are we paying for exactly? What is included in the price?
• Are there any onboarding or set-up fees?
• Are there any transfer or exit fees?
  

Use our Employee Cost Calculator to estimate the additional costs of hiring using our Employer of Record Solution in Australia and New Zealand.

To get started with an Employer of Record service, you’ll typically need to sign a service agreement and provide some basic information about your company and your employees.

The EOR will then take care of setting up payroll and benefits administration and will provide ongoing support and assistance as needed.

Yes, an Employer of Record is responsible for ensuring compliance with local employment laws and regulations, including payroll, taxes, and benefits.

This can help businesses avoid legal issues and penalties.

Any business looking to hire staff overseas can benefit from using an Employer of Record service.

This includes foreign companies looking to expand their operations to a new country, startups, and businesses without a legal entity in the country.

Yes, an Employer of Record can help with benefits administration, including health insurance, retirement plans, and other employee benefits.

They can work with businesses to design a benefits package that meets their needs and comply with local regulations.

An Employer of Record is responsible for handling payroll and for the staff they employ on behalf of the client business.

This includes calculating and disbursing salaries, taxes, and other payroll-related expenses.

An Employer of Record service provider can handle a variety of employment arrangements, including full-time, part-time, temporary, and contract staff.

Sure thing!

An EOR can provide HR support, including onboarding, training, and performance management. This can help your business ensure that their staff are productive and engaged, while also complying with local employment laws and regulations.

Terminating staff hired through an Employer of Record service is typically easier than terminating direct employees, as the service provider handles the legal and administrative aspects of the termination process.

This can save your business time and money while avoiding legal issues.

Our Employer of Record (EOR) service covers many countries worldwide, including those in Europe, Oceania, and the Americas.

Please contact us to find out if we cover the countries where you need employment services.

Yes!

In fact, an Employer of Record service can be a great option for short-term contracts or projects. It allows you to quickly and easily set up employment in a foreign country without having to establish your own legal entity.

An Employer of Record service is different from a traditional staffing agency in that it handles all legal and administrative matters related to employment, including payroll, benefits, and taxes. A staffing agency typically only handles the recruitment and placement of employees, which we also do!

Depending on how organised and quick a client is in gathering all information required it could take from 2 to 5 days.