Employers of record (EORs) and professional employer organizations (PEOs) are third-party entities that partner with companies to handle their HR needs. The main difference between the two is that while EORs employ workers on behalf of their client companies without requiring their clients to have a US entity, PEOs mostly handle HR functions for client companies who already own US entities.

The employer of record (EOR) is responsible for the full-time employment of a worker, including wages, benefits, taxes, and other expenses associated with their employment. The EOR is also responsible for managing any disputes or legal issues that may arise in relation to the employee. This includes ensuring compliance with applicable labor laws and regulations and providing assistance with insurance claims or workers’ compensation cases. The EOR also has the responsibility to ensure that all payroll and tax-related paperwork is accurate and up-to-date. Additionally, they are responsible for communicating with employees regarding their rights and responsibilities as employers. The employer of record must also provide appropriate training and support to ensure that workers have the necessary skills to perform their job duties.

If you decide to expand to the US via our employer of record service, EMS, Foothold America will hire your US assigned personnel and will manage payroll, medical benefits, retirement, income tax deductions, expenses, leave tracking, workers compensation, unemployment for your employee compliantly in whichever state they live.

Whilst we will hire your US assigned personnel, you lead your assigned personnel’s training or day-to-day relationship. You are free to plan professional development and training for your employee. When it comes to state-mandated training, for harassment prevention, for example, Foothold America takes responsibility for ensuring employees complete the required training. We aid our clients in keeping a remote workforce engaged with innovative tools that resonate with US workers. 

If you have decided to expand your business to the US via our Employee Management Service, Foothold America will work with you, your recruiter or our network of recruiters to identify the best candidate for the position. If you already have a candidate in mind, then this is great as well. Once the candidate is selected, we will offer a comprehensive benefits package and extend the hiring offer to your US assigned personnel. Once the offer is signed, the employee can begin in as little as one week. Our onboarding team will ensure the employee’s right to work in the US, will conduct background checks, set appropriate income tax and employer tax deductions and will guide your employee through the online employee portal to enroll in benefits. If things are not working out well with your US assigned personnel,  and you would like to terminate your employment relationship with your US worker or implement a Performance Improvement Plan, when recommended, for your US employee, Foothold America will provide support and assistance to do so compliantly. 

The difference between PEO (Professional Employer Organization) and EOR (Employer of Record) is that a PEO acts as an employer for the company’s workforce, while an EOR provides a range of administrative services related to hiring and payroll.

A PEO is responsible for all aspects of the employment relationship, including recruiting, hiring, managing payroll and benefits, setting employee policies, handling disciplinary action and terminations, and ensuring compliance with relevant labor laws.

An EOR, on the other hand, provides administrative services such as payroll processing, tax filing and remittance, employee onboarding and offboarding, employee benefits management, and compliance with relevant labor laws. An EOR does not manage the day-to-day operations of the company’s workforce; rather they provide assistance to make sure HR processes are handled properly.

Employer of record (EOR) for tax purposes is a service offered by certain companies that allows businesses to outsource the responsibility of payroll, tax, and insurance compliance. The EOR assumes the legal responsibility of being the employer and handles all employee-related transactions such as hiring, onboarding, payroll, benefits, and taxes. This service simplifies the process of managing employees and eliminates the need for employers to be familiar with local regulations or file taxes in multiple jurisdictions. Employers benefit from this service by saving time and money on administrative tasks while ensuring they remain compliant with local labor laws.

At-will employment means the employee or the employer may terminate their work relationship at any time without the need to provide prior notice, as long as the termination is not discriminatory or for another illegal reason. It is also important to know that most states in the US are considered at-will employment states. To find out more about at-will employment and the doe’s and don’ts of terminating an at-will US employee, click here.  

We understand that sometimes, our clients decide to cease US operations. 

If you would like to discontinue using our Employee Management Service, you would need to give us a one month notice. With our one month notice period, we alleviate the stress of a long term commitment and ensure that the US assigned personnel is terminated compliantly.