An Employer of Record (EOR) is a service that enables organizations to hire employees in countries where they do not have a local entity. This solution is ideal for businesses looking to expand internationally without the complexities of establishing their own legal presence in a foreign market.

Setting up a local entity in another country can be both time-intensive and costly, making it impractical for companies not ready to commit to a long-term presence in that region. An EOR provides a streamlined, cost-effective alternative, allowing businesses to compliantly employ international talent without the administrative burden of creating and maintaining an entity.

With an EOR, your international employees are legally employed on your behalf. The EOR manages payroll, remits local taxes, administers mandatory benefits, and ensures compliance with local labor laws, enabling you to focus on growing your global operations.

An EOR platform is a secure, centralized online system designed to manage payroll, documentation, and HR compliance for global teams seamlessly.

It streamlines essential processes such as employee onboarding—facilitating the signing of locally compliant employment contracts and agreements—payroll processing, and the administration of employee benefits. With an EOR platform, organizations can efficiently handle the complexities of managing international employees while ensuring compliance with local labor laws and regulations.

A Professional Employer Organization (PEO) operates under a co-employment model in Canada, sharing employer responsibilities with the client company. Typically, the PEO handles functions such as payroll, tax compliance, benefits administration, and workers' compensation insurance, while the client company retains direct management of employees.

In contrast, an Employer of Record (EOR) provides a global employment solution where the EOR serves as the sole legal employer. The EOR hires workers on behalf of client companies, managing all employment-related responsibilities—such as payroll, taxes, benefits, and compliance—without requiring the client to establish a local entity in the country. This distinction makes EORs particularly valuable for businesses expanding into international markets.

An Employer of Record (EOR) operates by legally employing your international employees through its own local entities. With deep expertise in local employment laws, EORs ensure full compliance in critical areas such as onboarding, payroll, compensation, benefits, severance, termination, and more.

The EOR co-signs the employment contract with the employee and assigns them to your company under a service agreement. While the EOR handles all legal and administrative responsibilities, your company retains full control over the employee's daily management and work assignments. This arrangement allows you to focus on your business operations while the EOR ensures compliance and smooth workforce management.

Contractors have the flexibility to create their own invoices, which Rippling seamlessly routes through the appropriate approval workflows. For scenarios where Rippling already has the necessary information—such as fixed-rate contract terms or hourly contractors tracking time through the platform—Rippling can automatically generate invoices on their behalf. This automation simplifies the billing process, ensuring accuracy and efficiency for both contractors and employers.