Employer of record

An Employer of Record (EOR) is a third-party organization that legally employs workers on behalf of another company. While your business directs the employee’s day-to-day tasks, the EOR handles the legal and administrative responsibilities of employment—like payroll, taxes, benefits, and compliance.

For small businesses that want to hire employees in new states, countries, or employment structures without setting up a separate legal entity, an EOR offers a fast, low-risk solution. Platforms like Homebase can help you stay on top of hiring and team management, whether you’re handling it in-house or working with an EOR for extended reach.

An Employer of Record becomes the legal employer for workers while your company remains their functional manager. The EOR handles:

This arrangement allows you to delegate employment-related responsibilities while still managing the team directly on the ground.

If you're growing your business into a different state or country, hiring an employee there can require registering as an employer, setting up tax accounts, and complying with local labor laws. An EOR handles all of that for you—so you can hire fast without setting up a new entity.

For businesses hiring remote workers in multiple jurisdictions, an EOR ensures that payroll, taxes, and legal obligations are handled correctly across state or international borders.

An EOR can be a smart temporary solution when you're exploring a new location or role and aren’t ready to invest in full infrastructure. If the arrangement works out, you can transition to a direct employment model later.

Labor laws are complex and vary widely by location. An EOR has the legal expertise to ensure proper worker classification, wage laws, and leave entitlements—reducing the risk of costly compliance mistakes.

A Professional Employer Organization (PEO) and an EOR are often confused—but they function differently.

For small businesses without legal infrastructure in multiple locations, an EOR is typically the simpler and more flexible choice.

Before committing, evaluate whether an EOR is the right long-term fit—or a short-term bridge to expansion.

If you decide to work with an EOR, choose one that:

Clear communication and service-level expectations are key to a successful relationship with any EOR.

Whether you hire directly or through an Employer of Record, Homebase helps small businesses run a more efficient, compliant, and people-first hiring process. With Homebase, you can:

Explore Homebase Hiring and Onboarding to take the guesswork out of growing your team—whether you manage payroll yourself or lean on an Employer of Record for support.