Is It Possible For Payroll Companies To Become Employer Of Record

In the last decade, many business organizations and owners have tried to simplify their payroll procedures by turning over to a third party for provisions. International employers have benefited a lot of valuable services from the right providers. They can hire an employer organization, an EOR (Employer of Record), and even a payroll company.

Now organization and business owners new to the research of such kinds will face a few doubts regarding these terms and their purposes. The first question that might crop up is that if payroll companies are eligible to become a Payroll Company Employer of Record? Let us define both aspects and discuss their differences while we try to answer the question properly.

What is an EOR?

The term EOR stands short of Employer of Record, and it usually is known for providing back-office services like outsourcing employee on-boarding, timestamps entries, processing payroll, administration benefits, HR compliance, etc. Independent business owners and firms are able to outsource these significant responsibilities once the candidates are okay to fill the job order. Here is the common Employer of Record services that can be provided.

• An Employer of Record helps in employing temporary and contractual workers by covering their worker’s Comp in any state that they are working in all the while withholding state taxes. 
• USA Employer of Records can help you navigate the federal and state employment laws that are always changing and ensure that your business is compliant as per all the regulations. 
• EORs offer benefits such as health care as mandated by the ACA compliance.
• EORs are also legally responsible for paying all employees their timely salaries while withholding their federal and state taxes. 

What are payroll companies?

Payroll companies are also companies that provide similar services, but their focus is more on software solutions required for payroll. They sometimes do provide assistance with many HR-related tasks, but all their expertise is centered on the payroll.

The significant difference

While payroll companies can be very efficient in providing comprehensive solutions to all the payroll related requirements that businesses can experience, they somehow fall short of Employer of Record whose services encompass all that payroll companies provide and a lot more. For instance, they take care of HR services for these businesses. They can also help businesses expand overseas by filling out all the paperwork associated, thereby saving the time and efforts of business owners. 

The main difference between them is the responsibility and liability associated. Payroll companies are only responsible for providing you with the tools and resources for making your employee payroll process smoother. At the same time, USA Employer Of Record takes on a lot more responsibilities for the company.

Our final verdict

Payroll companies have the potential to turn them into Employer of Record, provided they have the resources and capabilities to take on added responsibilities for the company, and deliver results. If your business needs only assistance regarding employee payment handling, then a simple payroll service would suffice. But for payroll companies to become Employer of Record Service USA, they would have to provide more than just payroll software.