Employer of Record (EOR)
An Employer of Record/ EOR is different than the State Fund because an EOR covers the employees for work comp AND processes their payroll (and pays all payroll taxes and manages their HR) on a “pay as you go” basis. Also in an EOR arrangement, the employees are 100% the legal responsibility of the EOR. Conversely, with a State fund comp program, the employees are 100% the responsibility and liability of the staffing co owner.
The relationship between the EOR and the staffing company is usually invisible to the employees and the staffing co’s clients. The EOR does not communicate with the employee unless given the approval by the staffing co. Though the employee will complete an EOR Application, they can be “co branded” with the staffing cos logo and name. As are the pay stubs as well.
Below are the benefits of using an EOR (versus the State Funds) for work comp:
- 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 1.5-2.0% of payroll for providing all administrative services.
- Often lower deposit than state fund
Over 1500 staffing companies use EOR’s in the US. 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 deep work comp carrier relationships. Some EOR’s are not experienced in the staffing industry and should be avoided. Work Comp Staffing Solutions preferred EOR’s all have client bases of over 300 staffing clients each, and have been in business for at least 20 years.