All about Ruul’s new Employer of Record (EOR) service

Ruul now rolled out its brand new Employer of Record (EOR) service for organizations that would like to hire employees in different parts of the world but refrain from opening up new entities in other countries.

Location-independent and remote work is the reality of our day. More and more companies have started to hire remote employees across borders to expand their influence around the world. Four out of five firms that generate more than $1 billion in annual revenue have increased their share of international workers in the past years. 

With such a blooming demand for international hiring, new solutions have emerged–such as international Employer of Record services. Regardless of the size of your organization, you too can expand globally with remote hiring by partnering up with an EOR service provider.

What is an Employer of Record (EOR), and what is an EOR solution? Keep reading to join as we go over definitions, related terms, how it works, and everything else about global Employer of Record services.

Definition of EOR

An Employer of Record (EOR) is a third-party organization that employs and pays full-time employees on behalf of an organization. With the help of an Employer of Record, organizations can hire any remote talent located in countries where they do not have a local entity, compliantly. 

What is the difference between PEO and EOR?

A Professional Employer Organization (PEO) is a service provider that helps organizations with HR functions such as payroll processing, benefits, and training. PEOs operate as co-employer in locations where an organization already has a local entity. 

PEOs can help you hire remote employees in other countries, but you must have a local entity in that location. If you want help with managing payroll and everything else related to remote employee management without having to set up a local entity, that can be only done by an EOR. With global Employer of Record services, your EOR partner becomes the full legal employer on paper.

A PEO helps you outsource your HR duties, whereas an EOR acts on your behalf as an employer in addition to managing HR admin. With the help of international Employer of Record services, you can hire as few as a single employee from a certain country without the costs and bureaucratic burden of setting up a local entity. That’s not the case with PEO.

What is the difference between EOR and AOR?

An Agency of Record (AOR) is a service provider that helps organizations hire independent contractors. AORs handle independent talent management processes from forwarding invoices to making payments, on behalf of the organization. They may also handle tax reporting and filings for 1099 workers (independent contractors).

Working with an AOR gives you limited control over your workforce. In fact, they only provide services to manage your contingent workforce. Unlike Employers of Record, AORs can only help with managing independent talents. If what you’re looking for is fully compliant employment and complete payroll management, what you need is an EOR.

Employing with EOR solution vs contracting

There is no single recipe for hiring global talents. For some organizations, working with independent contractors on a project or need basis is sufficient. A contract-based arrangement saves resources and administrative burdens. Especially for companies that want to access global talent pools without having to establish local entities, working with regular contractors is a great option.

But it’s not the only available option. If your organization works with a blended team consisting of employees in your location and independent contractors from all over the world, you can easily add your regular contractors to your payroll with the help of an Employer of Record. 

Employer of Record vs payroll companies

Payroll companies offer exclusively payroll and tax management services. With a payroll company, you would get help with setting up and processing your payroll obligations with compliance. Some payroll services also include benefits and retirement account management. However, these services are usually limited to financial assistance.

A global Employer of Record, on the other hand, not only helps you process payroll but also takes over HR tasks from onboarding to offboarding, and assists with compliance in different locations around the world. With an EOR partner, you get access to comprehensive global payroll services across borders without having to set up a local entity, plus streamlined HR solutions.

What Employer of Record can do for companies

What exactly does an Employer of Record do? In a nutshell, it helps you expand your workforce internationally by hiring employees on your behalf in another country. As a global Employer of Record, Ruul runs your payroll and HR admin in over 160 countries.

Payroll and financial management

Employer of Record services can ease the costs and administrative burden of running your payroll through:

• Setting up and processing payroll
• Generating employment contracts compliant with local laws
• Tax registration (issuing W-2 forms)
• Cross-currency payment options to distribute payroll
• Financial admin support

Simplified HR management

Running a blended, multinational talent force is no easy business. When you work with an EOR, you are supported on all steps along the way. Here is what the comprehensive EOR service Ruul offers help with:

• Background checks
• Tracking talent information
• Employee onboarding
• Benefits (insurance coverage, pension schemes, stock options)
• Holiday entitlements (vacation and sick days) and time-off requests
• Probationary period confirmation
• Collecting and processing time sheets
• Tracking attendance and leaves
• Reimbursements and expenses
• Employment termination

Regulatory compliance

One of the biggest advantages of partnering with an Employer of Record is ensuring your global employment processes are locally compliant. EOR services can help you abide by local labor requirements on the following issues:

• Social security requirements
• Minimum wage
• PTO payout for salaried employees
• Local holidays and expectations
• Termination liabilities (notice periods, severance payouts, suitable procedures)
• Correct classification of workers (1099 workers vs W2 workers)

In addition to these three pillars, what Ruul exclusively does is serve as a single platform from which all of your blended workforce can be added to your dashboard–both employees and external talents. You also are able to process multiple payments like recurring expenses in a single monthly invoice, and pay external talents in bulk with a consolidated invoice.

What are the advantages of a company using an EOR?

If you’re still not sure about the advantages of working with an EOR and are questioning “Who needs an Employer of Record?” and “Why use an Employer of Record?”, this section sets it all straight.

International expansion

Say you’ve decided to open up to new markets and diverse talent pools. Cross-border hiring is a great step to take your business global and expand your influence. But it’s also costly and comes with quite a lot of administrative burden. 

To open a subsidiary in a new country, you would have to go through local and international bureaucratic processes, open bank accounts, register with tax authorities, and more. There are also issues like how to pay employees in different currencies. With an EOR service provider, you can simplify global hiring and no longer have to go great lengths to manage and pay your cross-border workforce.

Centralized global talent management

Opening subsidiaries in different regions and countries also comes with management issues. With so many different regulations and local liabilities to keep up with, you might struggle with maintaining a unified and strong culture–especially if your team is fully remote.

EOR services can help you centralize your hiring and talent management processes. In a single platform, you can track and manage every detail of your workforce including requests and timesheets.

Compliance with laws & error-free payroll processing

Local labor laws vary in each country and region. Working with a global Employer of Record, you won’t have to worry about the specifics of local benefit and tax requirements and follow up on questions like “How many sick days do you get in Mexico?”

Staying on top of different due dates for all phases of payroll processing is no longer a problem. Your EOR partner ensures tax forms are filed correctly and declaration payments are made in a timely manner. All payslips are compliant, correct, and produced on time. If you pick an EOR provider with cross-currency payment options, you also benefit from fast and secure global payouts to your employees.

Easy universal HR

What do industry leaders have in common? They place utmost importance on employee wellbeing and satisfaction. With a blended and cross-border workforce, it may be difficult to identify and provide competitive compensation and benefits packages to employees located in different parts of the world.

Working with an EOR partner, your organization can streamline all aspects of talent management from onboarding to offboarding. Universal HR admin becomes faster, more seamless, compliant, and up-to-date with the dynamics of local markets. Some Employers of Record also provide ongoing advice on organizational structure, helping you maximize employee retention and productivity.

How does Ruul’s Employer of Record service work?

Your EOR service provider hires, pays, and manages your talent force on your behalf, and takes care of all the details related to these processes. But how exactly does it work after you decide to work with one? 

Here is how you can use Ruul’s Employer of Record solution:

Sign up and create an organization account at Ruul

1. Apply for the service through the Employment tab on your dashboard
2. Meet our Global EOR and Payroll Team and discuss your needs
3. Enter the data of your employees (name, surname, position details such as salary, start date, and benefits)
4. Have your employees complete the KYC process and upload required documents
5. Ruul reaches out to your employees and onboards them
6. Sign the employment contract sent to you
7. Receive the invoice for your employees (including 1 month of deposit, benefits, and EOR flat fee)
8. Manage your employees on your Ruul dashboard

How much does an Employer of Record cost?

Is working with an Employer of Record expensive? Compared to the costs of hiring globally in locations where your organization has no subsidiaries, no–quite the opposite. Of course, the exact answer depends on the service provider you choose and which pricing model they offer.

Some Employers of Record opt for the percentage pricing model, which means you pay a fixed percentage of the total processed payroll. This would not exactly be to your advantage–as salaries increase, so will your labor costs. 

The flat fee pricing model proves more feasible in the long term for many organizations. With this model, you pay a flat rate per employee. Contact our team at [email protected] to get a quote for your organization.

Which is the best EOR for your organization?

What is the best employer of record? This depends on the needs and demands of your organization, however, there are certain criteria you should consider.

• Security – Sensitive data regarding your organizational structure as well as financial records, and the personal information of your employees will be in the hands of your EOR partner. You would want to work with a service provider that ensures the safety of all data.
• Global coverage – Ideally, your EOR partner should be able to help you hire talents in as many locations as possible, and process payments across borders in multiple currencies.
• Agility – Universal payroll processing and talent management require everything to be handled punctually and as fast as possible.
• Support & communication – All sorts of questions, last-minute demands and mishaps may occur when you’re dealing with talents on a global scale. Your EOR partner should be responsive and helpful at all stages.
• Expertise – Ensuring compliance with local labor laws and tax requirements requires experience and expertise. To minimize the risks, entrust your global hiring and talent management to an expert.
• Pricing – Among the top selling points of working with an EOR is cutting down on costs. Hence, a transparent pricing plan that makes sense for your organization is key.

Ruul has been harmonizing universal work relationships since its inception as a work, finance and compliance partner. With a network of global payment processing partners allowing for cross-currency payments in over 120 countries, Ruul now offers compliant global hiring and payment solutions in 120 locations across the world. 

If you haven’t done it yet, sign up for Ruul as an organization and apply for Ruul’s EOR services through the Employment tab of your dashboard or get in contact with our Global EOR and Payroll Team at [email protected] to get started and expand your workforce and influence beyond borders.