Frequently Asked Questions
Have Questions? We’re here to help.
Employment of Record (EOR)
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What is an Employer of Record (EOR)?
An Employer of Record is a service that enables businesses to outsource their employee management responsibilities, including payroll, benefits, and compliance, to a third-party organization.
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How does EOR benefit my business?
EOR services provide access to a global talent pool, simplify compliance with local regulations, offer scalability for workforce expansion, and ensure expert support for various HR functions.
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What responsibilities does the EOR handle?
An EOR manages tasks such as payroll processing, tax withholdings, benefits administration, and compliance with local labor laws, allowing you to focus on core business operations.
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Can I use EOR for global expansion?
Yes, EOR is an excellent solution for businesses looking to expand globally without the need to establish legal entities in every country. It facilitates quick market entry and ensures compliance with local regulations.
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Is EOR suitable for short-term projects or seasonal work?
Absolutely. EOR services offer flexibility, making them ideal for short-term projects, seasonal employment, or any situation where a temporary workforce is required.
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How fast can new hires be onboarded through EOR?
Onboarding times vary, but with the streamlined processes of an EOR, new hires can often be ready to work in a matter of days, ensuring a quick and efficient integration into your workforce.
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How do I choose the right EOR provider for my business?
Consider factors such as the provider's global reach, industry expertise, compliance capabilities, and the level of support offered. Evaluate their track record and customer reviews to ensure a reliable partnership.
Agent of Record (AOR)
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What is an Agent of Record (AOR)?
An Agent of Record is a company providing compliant workforce administration around engaging independent contractors.
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What services does an AOR typically provide?
An AOR typically offers a comprehensive suite of services including contractual obligations, worker classification, onboarding, and payment of independent contractor invoices.
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Why is AOR important?
Proper AOR is crucial to avoid legal and financial risks, including penalties and back taxes associated with misclassification. It also ensures fair treatment of workers and adherence to labor laws.
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What services do AOR providers offer?
AOR providers offer services such as worker classification assessments, contract review and management, tax form processing (like 1099s), legal compliance checks, audit support, and advice on best practices.
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How does a business determine if a worker is an employee or an independent contractor?
Misclassification can lead to legal penalties, fines, back payment of taxes, benefits, and wages owed under labor laws, as well as damage to the company’s reputation.
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Are AOR services beneficial for small businesses?
Absolutely. Small businesses, often lacking specialized HR or legal departments, can particularly benefit from these services to navigate the complex regulations surrounding independent contractors.
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How does an AOR service provider handle an audit situation?
In the event of an audit by tax or labor authorities, AOR providers can offer crucial support, providing documentation and guidance to demonstrate compliance.
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How do AOR services impact the management of a contingent workforce?
These services streamline the management of a contingent workforce, ensuring that independent contractors are engaged and managed in compliance with legal requirements, thereby reducing administrative burdens and legal risks for the business.
Professional Employer Organization (PEO)
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What is a Professional Employer Organization (PEO)?
A PEO is an organization that partners with companies to provide comprehensive HR solutions, including payroll, benefits administration, HR management, and compliance assistance. Through a co-employment arrangement, a PEO shares certain employer responsibilities with the client company.
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How does a PEO arrangement work?
In a PEO arrangement, the PEO becomes the employer of record for tax purposes and handles HR and compliance tasks. The client company retains control over business operations and management of employees.
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What are the benefits of using a PEO?
Benefits include access to better employee benefits, reduced HR administrative burden, compliance with employment laws, risk management, cost savings, and allowing business owners to focus on core business activities.
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Can any business use a PEO?
While PEOs can serve a variety of businesses, they are particularly beneficial for small to medium-sized businesses that may not have the resources for a full HR department.
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How does a PEO handle employee benefits?
PEOs offer a range of employee benefits, often at more competitive rates than small businesses could obtain independently. They manage the administration, compliance, and renewal of these benefits.
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What is the difference between a PEO and a traditional HR outsourcing service?
Unlike traditional HR outsourcing, a PEO enters a co-employment arrangement with your business, allowing them to share legal responsibilities. This is more comprehensive than simply outsourcing HR tasks.
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How does a PEO ensure compliance with employment laws?
PEOs stay updated on federal and state employment laws and regulations. They ensure that your business's HR practices are compliant, reducing the risk of legal issues.
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What is the cost of using a PEO?
Costs can vary based on the services provided and the number of employees. PEOs may charge a percentage of total payroll or a flat fee per employee.
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How does a PEO relationship affect employee-employer relations?
The client company retains control over day-to-day management and workplace culture. The PEO handles administrative and compliance aspects, but employees remain under the direction of the client company.
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How can a business transition to a PEO?
Transitioning involves signing a service agreement with the PEO, which then takes over HR responsibilities. The PEO works closely with the business to ensure a smooth transition for employees and management.
