An Employer of Record (EoR) is a third-party company that legally employs workers on behalf of a client organisation. The EoR handles payroll, statutory benefits, employment contracts, and local compliance - while the client directs the work day-to-day.
When EoR makes sense
EoR is well-suited when: - You need to hire in a country where you do not have a legal entity - The engagement is expected to last under 24 months (beyond which a local entity often makes more financial sense) - You want to convert a successful contractor relationship into something more stable
EoR versus direct contracting
A direct contractor arrangement is simpler and cheaper in the short term, but it transfers compliance risk to you. Misclassification penalties vary by country, but in the UK, France, and Germany they can include back-taxes, social charges, and in some cases personal liability for directors.
What to review in an EoR contract
- **Termination provisions** - who bears severance and notice costs
- **IP assignment** - does it flow through the EoR to you automatically
- **Benefit floor** - is the EoR meeting minimum statutory benefits or exceeding them
- **Data sub-processing** - the EoR processes personal data on your behalf, which has GDPR implications
Corpshore Work's EoR arrangements include IP assignment by default, statutory-minimum benefits in every territory, and a standard DPA that satisfies GDPR and UK GDPR requirements.