Hiring internationally doesn’t need to start with opening entities in every country. That’s where an Employer of Record (EOR) steps in—not just to hire talent on your behalf, but to manage the legal and compliance-heavy side of cross-border employment. But what’s actually happening behind the scenes?
Let’s break down the exact operational flow of how an EOR works, what responsibilities are shared, and how it all fits into a global hiring strategy.
Step 1: You select the candidate, the EOR becomes the legal employer
What happens:
You find a great candidate in another country—but your company doesn’t have a legal presence there. Instead of opening a local entity (which can take months and cost thousands), you partner with an EOR like Omnipresent.
The EOR already has legal entities around the world. They become the legal employer of your new hire on paper, but you remain the operational manager.
In practice:
- You run interviews and choose the candidate.
- You decide their job title, compensation, responsibilities, and start date.
- The EOR hires them locally using their legal infrastructure.
Why it matters:
This setup allows you to bring someone onboard legally and quickly—without dealing with government registration, tax setup, or local labor law requirements.
Step 2: The EOR creates and signs a locally compliant employment contract
What happens:
The EOR drafts an employment contract that aligns with the labor laws of the employee’s country. This includes standard legal clauses required by local authorities, such as termination rules, working hours, notice periods, and mandatory benefits.
You’re still involved—you define the role and salary—but the EOR ensures it’s legally airtight and in the local language if necessary.
In practice:
- The EOR sends you a draft contract for review.
- You provide input or adjust terms within legal boundaries.
- The EOR signs the contract directly with the employee as the employer of record.
Why it matters:
Many countries have complex employment laws. A compliant contract helps avoid lawsuits, fines, or delays. For example, firing someone in Germany requires strict documentation and justification, while in Mexico severance is mandatory even for just-cause terminations.
Step 3: Payroll, taxes, and statutory benefits are handled by the EOR
What happens:
Once the employee is hired, the EOR takes full responsibility for paying them accurately and on time. That includes withholding the right amount for taxes, social contributions (e.g., pension, unemployment), and managing any required national benefits.
In practice:
- You fund the payroll: each month you pay the EOR an invoice that includes salary + employer taxes + any benefits + service fees.
- The EOR processes payroll in local currency and sends payslips to the employee.
- The EOR handles government reporting, tax filings, and ensures all contributions are made properly.
Why it matters:
Payroll errors or tax misreporting abroad can lead to heavy penalties. The EOR protects you from that risk by managing the entire process in compliance with each country’s regulations.
Step 4: You manage the work, the EOR manages compliance
What happens:
Even though the EOR is the official employer, you’re in charge of the employee’s day-to-day responsibilities—just like with any team member.
The EOR stays in the background, handling legal obligations: keeping up with regulation changes, updating contracts if needed, and ensuring all employment decisions are compliant.
In practice:
- You assign work, give feedback, and do performance reviews.
- If there’s a promotion, salary raise, or policy update, you request it and the EOR executes the paperwork.
- If there’s a dispute or local issue, the EOR advises on how to handle it legally.
Why it matters:
This division of labor gives you full control over your team’s performance and culture, while the EOR shields you from regulatory missteps in unfamiliar legal systems.
Step 5: Termination or resignation is handled by the EOR, legally and fairly
What happens:
If the employee leaves (voluntarily or not), the EOR manages the offboarding process according to local laws. This might include severance, documentation, official notice letters, and final payments.
In practice:
- You inform the EOR of the decision and reason.
- The EOR checks local rules: some countries require written justification, others require multi-week notice periods or specific payout calculations.
- The EOR prepares the paperwork and manages the legal side of the exit.
Why it matters:
Wrongful terminations abroad can cost companies tens of thousands, or trigger legal actions that block future hiring in that market. The EOR helps you exit cleanly, without drama or financial risk.
