Employer of Record Services
Employer of Record Services
Globalization Partners is a leading Global PEO offering one of the industry’s most renowned employer of record service suites. Those services have one goal in mind — let your organization grow without the burden of borders by identifying and then retaining international talent that’ll help you flourish.
What is a Global Employer of Record?
A global employer of record is an outsourced back-office administrator for companies with international employees. In short, employers of record place their clients’ international staff on their own Global PEO (professional employer organization) payroll. In doing so, the business no longer needs to undertake the long, complex, and financially onerous task of setting up a subsidiary within their international employees’ countries, instead using the infrastructure and established payroll resources of their employer of record partner.
The expanding company is still the functioning employer and the one all foreign staff report to. The employer of record executes back-office payroll, benefits, and regulatory technicalities associated with international staffing. They can also provide other auxiliary HR duties the original organization doesn’t have the resources, bandwidth, or technical expertise to tackle themselves.
Employer of records companies execute the following for their clients:
- Payroll: Setting up and managing international employees’ direct deposits, taxes, tax contributions, payment schedules, and any other payroll-related matter, alongside the accounting and bookkeeping services necessary with each.
- Benefits: Administering medical, dental, vision, and other cultural or location-specific benefits. Global PEO employers of record also manage benefits like 401(k)s and 401(k) equivalents, commute reimbursement, flex spending accounts, paid time off, paid sick leave, and more.
- HR/legal: Managing compliant hiring and onboarding practices, plus appropriate employee classifications, statuses, tax filings, registration, and more as mandated by local laws.
- Miscellaneous services: Employer of record services can also include administering family or medical leave, short and long-term disability, workers’ compensation, staff performance evaluations and management, and even termination negotiations.
Globalization Partners' Employer of Record Services
Globalization Partners is proud to be the Global PEO of choice for small businesses to Fortune 500 companies seizing the opportunity for international expansion.
Our employer of record service model works as follows:
- Adoption: Globalization Partners maintains a network of established business entities in over 150 countries around the world. We offer one of the most robust and comprehensive Global PEO infrastructures in the industry. You find and vet your organization’s ideal international candidate(s). We then get to work placing that new hire onto our payroll system, setting up benefits, classifying their official employee category, and tying up any other country-compliant hiring norms.
- Onboarding: Our entities are ready to execute locally compliant employee contracts and classifications. Once done, we move on to onboarding your employee(s) within our established entity system, which typically takes between one and three weeks.
- Integration: New international employees are formally integrated onto our payroll and into our proprietary software. Payroll launches upon the finalization and receipt of a service deposit, which ensures upfront your employees’ payment schedules and benefits administration are on-time and consistent from their first day on the job.
- Administration: We provide ongoing oversight and maintenance into front- and back-office HR, accounting, and legal needs of your international employees. You and your staff can access our software platform at any time, checking payroll schedules, employee documents, servicing information, and more. We built our platform to be transparent and user-friendly, reducing headaches and ensuring you stay empowered and in-the-loop regarding all pay and benefits activities.
- Ongoing support: Globalization Partners remains today’s only Global PEO with complete, end-to-end employer of records services. Our unique ability to offer such a robust partnership is due to maintaining some of international labor law’s and business law’s top talent, including attorneys, consultants, and contractors with country-specific career expertise. Plus, our technology is the only employer of record platform of its kind on the market.
Hiring and managing employees abroad can be a challenge — one Globalization Partners exists to solve. Clients receive payroll, benefits administration, tax, data compliance, legal consultation, and a variety of other human resource functions from an industry pioneer whose leadership network has decades of experience under its belt. We are the only Global PEO offering this complete set of employee-management services.
The Benefits of Employer of Record Services
There are myriad benefits that come with working with a company that provides employer of record services, including:
Using an established employer of record platform is the quickest way to scale your workforce globally.
Consider the traditional route — in order to find the perfect candidate to fill an essential role in a new market, your company would then need to:
- Build or buy a branch office in that country
- Register as a subsidiary of your US headquarters
- Contract a local payroll service, local accountant, local lawyers, and local HR personnel
- File and receive a tax ID
- File and receive a local bank account
- Research labor laws and collective bargaining rights
- Implement labor laws and collective bargaining rights into your contract offerings
- Procure a final contract for new employees
- Onboard new employees
- Set up a compliant payroll schedule, benefits administration, and more — all before their first day on the job
This process will take months if you’re lucky and well over a year if you’re not. If you already have candidates in mind, those candidates could accept other offers in the amount of time it would take to establish a branch or subsidiary in their country. Simply put, an employer of records service takes care of all this — and more — in a fraction of the time using pre-established business entities and an on-call network of local experts.
Without the regulatory need to set up a local subsidiary, organizations save thousands.
Yet this only scratches the surface of the cost advantages of using a Global PEO’s employer of record platform. These services offer unparalleled flexibility and cost-effectiveness, particularly for smaller businesses with only a handful of employees testing out new markets.
What’s more, organizations do not need to support additional HR, finance, or legal functions internally. This saves more time and money. The employer of record service model provides a template ready for adoption and initiation, reducing lead times and trimming implementation and upkeep costs across domains.
It’s rare for organizations to operate their own department dedicated solely to compliant international labor laws and operations. Maintaining employees overseas requires expertise in human resources, taxes, data compliance, benefits, and a number of international employment regulations. Quite bluntly, it’s a huge responsibility — and one with severe consequences if mismanaged.
Employer of record service companies exist to provide a safe, compliant solution. You no longer have to handle the burden of international employment regulations, which means you don’t bear the responsibility of fines, penalties, lost licenses, and business sanctions for non-compliance. Global PEOs and their employer of record platforms are the answer to alleviating regulatory worries, giving you the experts you need across international labor laws and practices.
4. Risk Mitigation
As mentioned earlier, the vast majority of compliance risks fall on your employer of record — not your organization. They’re the one with employees’ names on the payroll, and they’re the ones who’ve drawn up, implemented, and then administered day-to-day payroll and employee benefits. Any risks associated with these functions — from misclassified workers and paid holiday negotiations to family leave policy disputes and tax audits — will be directed toward the Global PEO.
Luckily, these risks are few and far between with global experts like ours. Our team familiarizes themselves with the particularities of global onboarding and employee management, helping us avoid risk. With a reputable employer of record like ours, you’ll receive only culturally informed hiring, contract drafting, onboarding, and retention systems in addition to appropriate local benefits, incentives, and labor law-following practices.
Employer of record services lend businesses peace of mind. This is an ultimate benefit, one as priceless and beneficial to your bottom line as anything else on this list.
The full-service partnership also means organizations that use a Global PEO can do what they do best — focus on core business functions and providing market-superior products and services.
Imagine what goals could be realized when you have a partner providing relief into the technical and administrative burdens of managing a global workforce. Any organization with international employees — from a few to a few hundred — knows how delicate this balancing act can be. When international expansion is the end game, and new markets are in sight, there are few better solutions than a pre-established employer of record service.
Additional Employer of Record Benefits
In addition, working with an employer of record often means that the company has its own entities in a variety of countries. This means that a company does not need to establish its own business entity in-country, especially if that company only wants to test a market with a few employees.
International employees benefit from a company providing these services because they have the assurance that they’ll be paid on time, that their taxes are being withheld appropriately, and that their employer are operating within compliance of all local laws and standards.
Frequently Asked Questions
Curious to learn more? Consult this guide for additional information of Globalization Partners and the employer of record service industry.
1. Who Uses Global PEOs and Employers of Record?
Organizations of all types and shapes use outsourced employers of records.
For small and medium-sized businesses, an employer of record provides financial, legal, and HR expertise many companies at this scale simply can’t manage themselves. This frees the company to focus on core business domains and growth objectives and prevents them from spreading in-house resources too thinly.
Similarly, Fortune 500 companies favor employers of records for their expediency as well as their expertise. Larger organizations — and smaller ones, too — have the assurance they’re getting the best of the best, with Global PEOs staffed by dedicated, certified professionals who hold years of experience in their respective domains.
2. Are You an International Staffing Agency?
Sorry, we’re not. However, with our RecruitGlobal program offered under our suite of Global PEO services, we can help your business find top talent with around-the-clock international sourcing. Our experts understand the nuances of hiring around the globe. These experts can help you navigate through negotiations and onboarding during your expansion.
3. Isn’t It Just Easier to Hire Foreign Contractors?
You always have the choice to hire foreign contractors. While this may initially appear a more convenient and, in some situations, cost-effective situation, it exposes you to a new set of legal regulations and compliance risks. If regulatory agencies in your contractors’ countries learn you’ve hired contractors without registering a formal legal business entity, you may be subjected to fines, business penalties, and even criminal litigation.
4. How Long Does It Take You to Onboard an Employee?
We average new employee onboarding process of two to three weeks within our entity network of 187 countries. With local legal experts and labor infrastructure already established, our onboarding rates are truly turnkey ready and one of the best in the business.
5. Does This Mean You Manage and Have Oversight of My Employees Now?
No. In fact, the whole point is that we would take care of your employees’ payroll, global benefits, taxes, and other back-office human resources issues, thus freeing you to manage the work of your employees. Your organization is still the primary employer of all international staff. Employees still report to you, perform the work you assign, contribute to your organization’s goals, and represent your business’ status globally. While on paper, any international employee, team, or department is employed by your Global PEO, they are immediately assigned to work full-time, exclusively for you. Therefore, employers of record service companies, like Globalization Partners, are executing back-office tasks so you don’t have to.
6. Once Established, How Do We Ensure Our Employees are Being Paid on Time and Receiving Their Benefits? How Do We Track Their PTO and Bonuses?
Through our technology. Globalization Partner’s proprietary software is designed to fully comply with U.S. and local laws, and its dashboards are user-friendly. The platform significantly cuts down on emails (to us, from us, to your employees, etc.), and will keep everyone (you, us, your employees) in the loop.
From our user-friendly platform, you can review payroll transactions, benefits administration, employee requests, account statements, and more. You can also send and receive communications on all relevant payroll and HR activities, decluttering your inbox and consolidating these communications into one place.
Our industry-leading platform is also fully compliant with US federal and state labor system laws, as well as approved for use in all 170+ countries we operate entities in. Plus, it contains role-based security features so only certain team members can access certain information.
7. Do I Need to Set up a Subsidiary to Hire International Employees?
No. With Global PEO employer of records, you do not need to set up a subsidiary or branch office in your new employee’s country — which takes tremendous time, money, and oversight. You also don’t need to go through the process of receiving a local bank account and tax ID. By working with an employer of record, you eliminate any need to execute the process of formally setting up international subsidiaries or branches. On average, this saves clients between six and 12 months.
8. What If I Hired Someone in a Country You’re Not In?
Don’t worry. Even if you’ve located an ideal candidate outside of our current 150+ country network, Globalization Partners has the resources in place to connect you with a reliable set of local payroll, accountants, HR staff, and lawyers. We’ll act as a liaison to identify the best regional, compliant third-party to secure any of your back-office HR needs — again, so you don’t have to.
9. Are International Hires Still Considered “At Will” If My Company Is Headquartered in the US?
No. The US is the only country that legally recognizes at-will employment. At-will employment is a concept stating employees can be terminated at any time, for any given reason, and without any prior warning so long as the termination rationale isn’t illegal.
The clause works both ways, as well. At-will employment also protects an employee’s ability to quit at any time and for any reason, in most cases allowing them to do so without stating any formal reason at all.
Because at-will regulations are a US-only legal concept, it can be tricky for companies to understand their full regulatory duties regarding hiring terms, contract terms, and termination clauses in other countries. Employer of record companies understand local labor laws as well as collective bargaining agreements across workers’ union, which are imperative to employ your foreign workers fully and compliantly.
10. How do you manage this across multiple countries around the globe?
We are experts in the local laws, regulations, culture, and customs in over 150 countries around the world. In addition, we have legal business entities in a very high percentage of those countries. So, placing your global employees on our payroll is easy. Where we don’t have an entity set up, we have long-established relationships with reliable local partners who are equipped to handle your back-office HR needs.
Request a Proposal
Contact Globalization Partners to learn more about partnering with a global employer of record service. We’re here to answer questions and outline activities so you can make an informed, empowered decision on the growth of your company — one unburdened by borders.