Employer of Record (EOR)
An Employer of Record is a third-party organization that serves as the legal employer for a temporary, contingent worker on behalf of another company.
When partnering with a company offering an Employer of Record service, often referred to as an EOR, all employment-related tasks such as onboarding, payroll, benefits, and more are handled by the EOR across multiple jurisdictions on behalf of the company. Meanwhile, the client company retains its day-to-day worker oversight.
Here are a few examples of scenarios where you would benefit from an Employer of Record solution:
A company has hundreds of internally sourced workers for ongoing projects. They don’t want to hire employees, lay them off, and rehire them when needed.
A university is considering potential adjuncts and other workers in various states. They’re only registered in one state and prefer not to set up business entities in the other states.
A young company needs specialized skills for a specific project. The company would not have an ongoing need for that skill once the project has been completed.
When partnering with a company offering an Employer of Record service, often referred to as an EOR, all employment-related tasks such as onboarding, payroll, benefits, and more are handled by the EOR across multiple jurisdictions on behalf of the company. Meanwhile, the client company retains its day-to-day worker oversight.
Here are a few examples of scenarios where you would benefit from an Employer of Record solution:
A company has hundreds of internally sourced workers for ongoing projects. They don’t want to hire employees, lay them off, and rehire them when needed.
A university is considering potential adjuncts and other workers in various states. They’re only registered in one state and prefer not to set up business entities in the other states.
A young company needs specialized skills for a specific project. The company would not have an ongoing need for that skill once the project has been completed.
Why Do You Need an EOR?
Agility
You can temporarily engage individuals with specialized skills only when you need them.
Administrative costs of expanding into new markets
An EOR can help an organization enter new states or countries without having to set up their own legal entity.
Legal ramifications of hiring remote workers
You have the ability to use remote workers from different locations without having to worry about various international, state, and local labor laws, payroll taxes, or benefits.
Staying compliant with laws for all worker types
Laws for temporary workers differ from those aimed at employees. Also, regulations differ by location and job category. This requires expertise to ensure that the organization remains compliant.
Reducing administrative burdens
You can reduce your administrative burdens of managing temporary workers in addition to full-time employees.
Want to learn more if an EOR is right for you?
What does an Employer of Record do?
An EOR assumes all administrative and legal responsibilities related to the employment relationship, while the client company retains control over the performance of the work assignments.
This frees your organization from manual, labor-intensive operational tasks, eliminates the need for human resources and legal personnel dedicated to understanding temporary worker compliance standards, and offers a standardized way to contain and reduce costs.
When serving as your Employer of Record, all employer-related obligations are fulfilled on your behalf. nextSource does this seamlessly, so every hiring manager’s and worker’s experience is consistent. By handling all the administrative and legal tasks, nextSource allows you to focus on your core business objectives.
We offer an effective solution for companies or colleges and universities that want to leverage the advantages of a temporary workforce without having to deal with the complexities and challenges of managing it. When partnering with nextSource, you can reduce costs and risks as well as ensure compliance and quality.
Once you partner with us, your pre-identified workers become Associate Employees of nextSource. At that point, our responsibilities include:
Financial
Managing payroll and employee compensation, withholding and remitting taxes, issuing W-2 forms, and providing payroll funding. We work with local, regional, national, and global experts to ensure all guidelines are followed and continually updated.
Regulatory
Tracking and updating labor laws and regulations in different jurisdictions, ensuring proper worker classification and compliance, and filing any necessary reports or audits with the proper authorities. We have developed rigorous screenings, onboarding requirements, verifications, spot checks, and Key Performance Indicators (KPIs) to mitigate co-employment, misclassification or other risks
Employee (Associate) Benefits
Employee (Associate) Benefits: Providing health insurance, dental insurance, vision insurance, life insurance, disability insurance, and accident and critical illness insurance. Conducting background checks and drug tests, if required. nextSource also goes above and beyond typical EOR benefits to include:
*Contributing an employer portion toward the medical insurance.
-
- *Contributing a matching percentage to all 401(k) participating Associates (review the guide for eligibility and plan rules).
- *Extending optional Holiday pay, paid time off, and other benefits to the payroll package at client request, depending on client offering, contract, and state law.
Legal
Complying with local labor laws and regulations, handling employment contracts and agreements, managing unemployment claims and workers’ compensation insurance, and resolving any employment disputes nextSource leverages our in-house counsel and employment attorneys as needed to ensure risk is minimized. As new legislation is passed, we update our staff and make any changes to the program.
Processing Forms
Tracking and managing important forms such as I-9s, W-4s, W-9s, 1099s, and other forms. Working with nextSource helps ensure all government forms are tracked, logged, and retained so your company remains compliant. As a side note, an EOR is not to be confused with a Professional Employer Organization (PEO) that handles human resource functions such as payroll, benefits, tax, and compliance but does not serve as the employer of the workers for the duration of their engagement with you. This means that if you engage a PEO your organization still carries all liabilities and burdens associated with these workers.
Financial
Managing payroll and employee compensation, withholding and remitting taxes, issuing W-2 forms, and providing payroll funding. We work with local, regional, national, and global experts to ensure all guidelines are followed and continually updated.
Processing Forms
Tracking and managing important forms such as I-9s, W-4s, W-9s, 1099s, and other forms. Working with nextSource helps ensure all government forms are tracked, logged, and retained so your company remains compliant. As a side note, an EOR is not to be confused with a Professional Employer Organization (PEO) that handles human resource functions such as payroll, benefits, tax, and compliance but does not serve as the employer of the workers for the duration of their engagement with you. This means that if you engage a PEO your organization still carries all liabilities and burdens associated with these workers.
Legal
Complying with local labor laws and regulations, handling employment contracts and agreements, managing unemployment claims and workers’ compensation insurance, and resolving any employment disputes nextSource leverages our in-house counsel and employment attorneys as needed to ensure risk is minimized. As new legislation is passed, we update our staff and make any changes to the program.
Regulatory
Tracking and updating labor laws and regulations in different jurisdictions, ensuring proper worker classification and compliance, and filing any necessary reports or audits with the proper authorities. We have developed rigorous screenings, onboarding requirements, verifications, spot checks, and Key Performance Indicators (KPIs) to mitigate co-employment, misclassification or other risks
Employee (Associate) Benefits
Employee (Associate) Benefits: Providing health insurance, dental insurance, vision insurance, life insurance, disability insurance, and accident and critical illness insurance. Conducting background checks and drug tests, if required. nextSource also goes above and beyond typical EOR benefits to include:
*Contributing an employer portion toward the medical insurance.
-
- *Contributing a matching percentage to all 401(k) participating Associates (review the guide for eligibility and plan rules).
- *Extending optional Holiday pay, paid time off, and other benefits to the payroll package at client request, depending on client offering, contract, and state law.
EOR Success Stories
Discover how we expanded access to talent through our EOR Solution.
EOR Success Stories
Discover how we expanded access to talent through our EOR Solution.
Getting Started with nextSource
nextSource approaches our partnership by focusing on operational efficiencies, cost containment, and risk mitigation.
Our unique approach consists of:
An Associate Services Team: This dedicated team ensures a positive experience for every payrolled worker. We refer to these workers as nextSource Associates. In this time of worker scarcity, when companies want to be able to reengage proven talent when needed, the worker experience is critical. We take this responsibility to a whole new level.
Serving as a Bridge: nextSource is the bridge between the organization and the temporary worker. We provide a single point of contact for both parties, simplifying the communication and coordination process. By taking care of all the administrative and legal tasks related to the employment relationship, both parties can focus on their core objectives.
Leveraging the Workforce: We provide an effective solution for companies that want to leverage the advantages of a temporary workforce without having to oversee the complexities and challenges of managing it. By partnering with nextSource, you can quickly access national or global markets, reduce costs and risks, and ensure compliance and quality.
Facilitating Reengagement of Top Workers: nextSource offers an optional proprietary Talent Community that is beneficial to the worker and our clients looking to quickly reengage workers on an assignment. Our community is not a stale pool of workers. We keep involvement high through continuous communication. This provides the flexibility and scalability needed to meet changing business or academic needs, dramatically speed-up the process of hiring local talent, and frees up internal resources to focus on strategic or operational tasks. Best of all, we can create a Talent Community branded to your organization. You can read more about our Talent Community here.
Getting Started with nextSource
nextSource approaches our partnership by focusing on operational efficiencies, cost containment, and risk mitigation.
Our unique approach consists of:
An Associate Services Team: This dedicated team ensures a positive experience for every payrolled worker. We refer to these workers as nextSource Associates. In this time of worker scarcity, when companies want to be able to reengage proven talent when needed, the worker experience is critical. We take this responsibility to a whole new level.
Serving as a Bridge: nextSource is the bridge between the organization and the temporary worker. We provide a single point of contact for both parties, simplifying the communication and coordination process. By taking care of all the administrative and legal tasks related to the employment relationship, both parties can focus on their core objectives.
Leveraging the Workforce: We provide an effective solution for companies that want to leverage the advantages of a temporary workforce without having to oversee the complexities and challenges of managing it. By partnering with nextSource, you can quickly access national or global markets, reduce costs and risks, and ensure compliance and quality.
Facilitating Reengagement of Top Workers: nextSource offers an optional proprietary Talent Community that is beneficial to the worker and our clients looking to quickly reengage workers on an assignment. Our community is not a stale pool of workers. We keep involvement high through continuous communication. This provides the flexibility and scalability needed to meet changing business or academic needs, dramatically speed-up the process of hiring local talent, and frees up internal resources to focus on strategic or operational tasks. Best of all, we can create a Talent Community branded to your organization. You can read more about our Talent Community here.
Advantages Delivered Through our EOR Solution
Cost and Time Savings
With business entities already in place across the United States and various other jurisdictions, we decrease the cost and time associated with creating a business presence. We also help negotiate competitive pay rates to reduce payroll expenses.
Risk Mitigation
Staying current with legislation helps mitigate risk and liability related to employment matters. It also includes handling employment disputes or potential lawsuits.
Compliance Assurance
Avoiding worker misclassification issues which can result in fines or penalties.
Flexibility and Scalability
Whether an organization needs to quickly scale up or scale down, our services allow the flexibility and agility to do so easily.
Local Expertise
Providing expertise and support to the organization and the worker that goes beyond legal and tax implications to include offering guidance on cultural norms and local business practices.
Worker Satisfaction
Along with timely and accurate payroll services, we offer competitive pay rates and benefits packages that are tailored to the local market to drive overall worker satisfaction. Regular check-ins ensure the best possible experience for each worker, increasing possibilities of reengaging when the need arises.
Other nextSource Services
You may also be interested in our other services:
Other nextSource Services
You may also be interested in our other services:
Looking to Learn More?
ou can find more information in our Thought Leadership library or set up a time to talk to one of our Workforce Solutions consultants.