Whether navigating employment laws and regulations across state lines or international borders, both PEO and EOR services play a key role in streamlining HR functions and ensuring compliance for growing companies. 

What is an EOR

An Employer of Record (EOR) is a specialized service provider that assumes the legal responsibilities and obligations of employing workers on behalf of a client company. In an EOR arrangement, the EOR becomes the legal employer, handling tasks that can include payroll, taxes, benefits administration, and compliance with tax and labor laws. 

This arrangement enables companies to focus their attention on core operations while outsourcing employment-related legalities and administrative tasks to the EOR.  

EORs play a critical role for companies that want to scale their operations internationally. They are experts when it comes to navigating the intricacies of global labor laws and foreign tax systems, facilitating companies’ entry into international markets. Rather than needing to set up legal operations in every country where expansion is occuring, EORs take on the management of local payroll and compliance as per each location's specifications.   

What is a PEO

A PEO, or Professional Employer Organization, is a company that provides comprehensive HR services to other businesses. These services often encompass payroll management, employee benefits administration, tax compliance, and risk management. 

When a company partners with a PEO, the PEO effectively becomes a co-employer of the company's employees, sharing certain employer responsibilities and liabilities. While the client company maintains control over its daily operations, the PEO handles administrative tasks related to HR and workforce management. 

What are the Differences Between an EOR and a PEO 

While both EORs and PEOs deal with the outsourcing of HR-related functions, EORs have their primary focus on becoming the legal employer of the employees, typically in an international context, whereas PEOs direct their services at co-employment arrangements in a domestic setting. 

As the legal employer, EORs directly employ the client company’s workers under their legal umbrella. PEOs on the other hand engage in a co-employment relationship where both the PEO and the client company share legal and administrative responsibilities. 

For the international expansion of business operations, an EOR allows companies to avoid setting up legal entities in foreign countries whereas a PEO operates within a single country and doesn’t replace the client company's legal entity. 

Employing EOR Services for Global Hiring 

In recent years, global expansion has taken on greater importance than ever before as a top growth strategy. In tandem, as the international workforce has become hyper-dispersed and increasingly remote, companies have opened the door to hiring opportunities that transcend physical location. 

In an HR survey it was found that 36% of companies would be enthusiastic to hire employees operating completely remotely. Piggybacking on this growing trend, another body of research revealed that 21% of executives believe global mobility to be a key feature in attracting and retaining top talent. 

With geographical barriers no longer prohibiting employment opportunities, global hiring has become a driving force for future-facing business strategies. In the wake of this new work model, the demand for EOR services has surged.

Through assuming the role of legal employer and the expert in local labor laws and tax compliance, EORs unlock the opportunity for companies to collaborate with top international talent.  

With an EOR managing payroll and compliance overseas, hiring strategies can prioritize specialized skills and best fit rather than professionals available in the geographical vicinity.

Making Rise your EOR

Rise is an all-in-one payroll and compliance solution built to streamline HR processes for traditional companies and web3-native organizations alike. An expert in local tax compliance worldwide, Rise ensures that payroll adheres to all regulations regardless of the country in which it is being issued. 

Rise provides a comprehensive platform for verifying employee identity, automating service agreements, ensuring full tax compliance and issuing instant payments in both fiat currencies and crypto. 

Additionally, Rise’s unique routing between fiat and crypto offers next-level flexibility to companies and employees alike. With Rise Pay companies can fund payroll in the currency of their choice, whether that is crypto in a digital wallet or fiat in a traditional bank account, and for contractors to withdraw payouts in their preferred currency. 

Make Rise your EOR today and start attracting top talent with expanded options for global employment and crypto payroll. Schedule a demo to learn more about how Rise can streamline your payroll and hiring across more than 150 countries.