5 Questions to Ask Before Choosing an EOR

Your employer of record (EOR) company serves as the critical front line between you and your employees. They are often responsible for managing your compliance with federal, state, and local regulatory laws governing payroll, benefits, and HR. It’s a hugely complex understanding filled with risk—which is exactly why you should ask these five questions before choosing your EOR partner.

Question #1: What is your local experience?

One of the benefits of an EOR is that they are established in areas where you don’t yet have a footprint. EORs can eliminate your need to register as a payroll entity in a particular region if they are the employer of record. There is a huge benefit in that the EOR assumes the risk of compliance with local and state laws governing payroll and benefits. But the EOR should be an experienced entity familiar with the local market. Avoid those “Mom and Pop” companies without a track record of compliance and service in your field and in the markets you serve.

Question #2: Will I be responsible for remitting taxes?

Your EOR should manage all of the aspects of payroll taxes, which vary by region. It’s an incredibly complex and risk-laden function within the HR role. The EOR you choose should have a consistent track record of handling federal, state, and municipal taxes across geographic boundaries. This is critical to keeping you legal but also for keeping your employees satisfied.

Question #3: What kind of support do you offer?

We believe an EOR has two primary clients: Your company and the employees that work for you. This requires nothing less than 24/7/365 support. Look for an EOR that only offers this service, particularly if your employees work across time zones. You need a resource that is there for your workforce, or you run the risk of lowered production due to unhappy workers. Your EOR partnership is and should be an extension of your HR team. Look for a firm that provides fast, efficient, and responsive support to your workforce and your company.

Question #4: What kind of worker contracts can you handle?

At some point, you may want or need a contingent workforce to handle periodic spikes in your business. This labor is handled quite differently from full-time workers. There are cost-savings and flexibility benefits to having this option. But not all EORs offer flexible types of contracts and management of those resources, choosing instead to focus on a non-contingent workforce. Ask your EOR vendor what types of workers they’re equipped to handle, and you’ll receive different answers across the industry. Look for the EOR that can offer your business the flexibility you’ll need in the future to adapt to a volatile marketplace.

Question #5: How much does an EOR cost?

Hiring on cost alone isn’t in your best interests. For obvious reasons, you’re looking for an EOR who is both experienced and a good partner to their clients. However, price does matter in any business partnership. Companies like FoxHire focus on contract workers that earn you a percentage for every employee you place into a job. This pays for the service itself.  

An EOR like FoxHire can help your business scale while providing contract workers to the jobs that build your business. Talk with our team about our EOR service and how it can help your business.