With innumerable advantages, it has become easier for Indian businesses to hire employees formally on an Employer of Record (EoR) basis. The other alternative is hiring contract employees who work for a contractual duration. But before we go into the benefits that make Employer of Record beneficial for Indian companies, let’s see what this term actually means.

An employer of record provides the same benefits as traditional employment but without the legal consequences typically imposed by law on employers. This includes substantial tax savings or exemptions as well as liability protections. A large number of US employers opt for an Employer of Record designation, particularly when it comes to paying Social Security and Medicare taxes.

Benefits of an employer of record

[1] It can help with workload

An employer of record designation allows you to carry out operations without the hassle of administrative costs. It allows you to hire additional employees and pay just a small percentage of their salary in taxes rather than all of it. This is a huge advantage, especially if you are working on heavy volumes and need more manpower. With more workers comes more work and no dedicated HR professionals to manage that extra workload

For example, say you own a restaurant and are looking for a bigger team for your kitchen. By employing a larger team, the restaurant is bound to earn more, and it’s only fair that you are allowed to keep a part of the earnings as profit.

But as an employer, if you hire these employees directly, you will have to bear the burden of paying all their taxes. Along with this burden comes the responsibility of managing them, giving them an annual review, and making sure they are being paid their dues.

But if you have an EoR, all these responsibilities shift to that company that is your EOR provider in India.

[2] It can help with HR

Hiring contractors can sometimes be a bad experience – in the long run. First of all, you have to spend a fortune on HR and training because your team and staff need to get better every day.

But even if you are lucky enough to find someone good and are able to train them properly, you need to worry about their paperwork.

So there is always paperwork involved in employment. An EOR will take care of all formalities and paperwork for HR. There will be no more deals with the HR team or even the process of filling up HR forms with employees. This is hugely beneficial for your company.

All you need is a few things to be listed in a form, and you are good to go. It saves a lot of time and money.

[3] It can help with severance packages

EOR services benefit Indian companies in another way – when you have to pay severance packages to your employees. Hiring employees on time and getting them trained is important.

But it doesn’t exempt you from the consequences when you have to let them go and provide them with a severance package. An EOR can help with all the formalities within the legal and HR stipulations in place.

[4] It can help with visa issues

It is not uncommon to hire employees who are not from the same country as you. And it’s even less uncommon for an employee to quit or be terminated because of visa issues. An EOR provider in India will make sure the employee has all the documents and visas in place. It also helps with illegal immigration cases or any other legal mess you might land yourself in because of an H1B issue.

[5] It can help with outsourcing

An employer of record in India can be used to outsource and hire employees who have no ties to the company.

This is a common practice among companies and helps them immensely with their outsourced operations. An EOR company will hire workers on your behalf and act as an employer of record for those employees.

To sum it up

With a competent EOR solution, you can hire, manage and pay global employees in a seamless way. An international employer of record (EOR) is a third-party service that helps to hire, onboard, manage, and pay international employees. Contact NSquareIT Offshore Agency for more insights on concepts like PEO service providers in India.