Employer of Record (EOR)

An Employer of Record ( ie EOR) is very similar to a Professional Employer Organization (ie PEO) in that they both provide work comp and payroll services in a turnkey fashion to the staffing company. EOR’s enable staffing companies to cost-effectively combine payroll services and work comp coverage for all employees. In turn, a staffing firm can concentrate on the revenue-producing part of the business. Work Comp Staffing Solutionss’ preferred EOR’s (like their PEO’s) service all 50 States.

EOR’s will work with start up staffing companies; whereas most PEO’s will only work with staffing companies with at least 1 year’s experience, and with at least 300K/yr in payroll.

In an EOR arrangement, the employees are 100% the legal responsibility of the EOR. Conversely, with a PEO, it is a “shared legal relationship” between the PEO and the staffing client. This shared legal arrangement with a PEO is also referred to as a “co employment” arrangement. Like with a PEO, with an EOR, the relationship between with the staffing firm is generally invisible to the employee, and staffing companies clients. The staffing company still controls the daily management of employees, all recruitment and screening activities, and controls all aspects of the employees’ work schedules and pay rates.

Benefits of an EOR (which are similar to a PEO) :

  • Provides a workers’ comp solution often with less expensive rates than some direct carriers and State Funds (depending on your comp loss experience.)
  • Administers workers’ comp claims.
  • Manages employee benefits and payroll processes.
  • Manages payroll tax compliance.
  • Administers unemployment insurance claims.
  • Workers compensation payments are “pay as you go.” Usually no upfront deposits are required.
  • Charges between 1.5-3.0% of payroll for providing all administrative services.

Over 1500 staffing companies use EOR’s. Work Comp Staffing Solutions only works with a few EOR’s because Work Comp Staffing Solutions only uses EORs that are very experienced in the staffing industry, and have stable work comp carrier relationships. Some EOR’s are not experienced in the staffing industry. Work Comp Staffing Solutions’s preferred EOR’s all have client bases of over 150 staffing clients and have been in business for at least 10 years.

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