FAQs

1. What is an Employer of Record (EOR)?

• An EOR is a third-party organization that becomes the legal employer of a company's employees in a different location or country. It handles employment responsibilities, such as payroll, benefits, taxes, and compliance with local labor laws, while the client company manages the day-to-day work.

2. Why should I use an EOR?

• An EOR is useful when a company wants to hire employees in a different country or region without setting up a legal entity there. It helps streamline the process, ensures compliance with local labor laws, and reduces risks associated with managing international employees.

3. How does an EOR differ from a Professional Employer Organization (PEO)?

• An EOR becomes the legal employer for tax and compliance purposes, whereas a PEO co-employs the worker but the client remains the legal employer. PEOs often require the client to have a legal entity in the country where they operate, while EORs do not.

4. What services does Reliable (EOR) provide?

• Payroll processing

• Tax withholding and filing

• Employment contracts compliant with local laws

• Benefits administration

• Compliance with local labor laws and regulations

• Employee onboarding and offboarding

• Immigration and work permits (if applicable)

5. Can I control the work of my employees when using an Reliable's EOR?

• Yes, your company retains control over the day-to-day activities, job roles, and tasks of the employees. The EOR is responsible for the legal and administrative aspects of employment, while you manage the operational side.

6. Does Reliable EOR handle employee benefits and insurance?

• Yes, an EOR typically provides benefits such as health insurance, retirement plans, and other legally required benefits according to the laws in the country where the employee is located.

7. How does Reliable EOR ensure compliance with local labor laws?

• Reliable EOR stays up-to-date with labor laws and regulations in each jurisdiction they operate. They ensure employment contracts, payroll, benefits, and termination processes comply with local laws, reducing the risk of legal issues for the company.

8. How is payroll handled through an EOR?

• The EOR manages payroll, ensuring that salaries are paid in the local currency and taxes are withheld according to the country’s regulations. They also handle any deductions, social contributions, and filings required by the government.

9. Can an EOR be used for short-term or project-based employment?

• Yes, EORs can support both short-term and long-term employment needs. They can help hire employees or contractors for specific projects or temporary roles.

10. What are the costs of using Reliable EOR?

• Reliable EOR charges a flat fee per employee per month. Additional costs may apply depending on the role.

11. How does an EOR handle terminations and severance?

• The EOR ensures that terminations are conducted in compliance with local labor laws, including any notice periods, severance payments, or legal requirements. They also manage the offboarding process.

12. In which countries can an EOR operate?

• Most EOR providers operate in multiple countries worldwide. However, Reliable specializes in Mexico, where the cost, skilled workforce, and proximity to the U.S. and Canada offers the best value for our clients.

13. Can Reliable hire independent contractors?

• Yes, Reliable also provides services to hire and manage independent contractors, ensuring that the classification of workers complies with local laws to avoid potential misclassification issues.

14. What happens if local employment laws change?

• The EOR is responsible for staying informed about changes in local employment laws and ensuring that your employees remain compliant with the new regulations. They will inform you of any significant changes that might affect your workforce.

15. Can I convert an EOR employee to a direct hire?

• Yes, many companies use an EOR as a bridge solution before establishing a legal entity or permanent presence in a country. Once you're ready to directly employ the worker, the EOR can help with transitioning the employee to your organization.

16. Is the employee aware that they are employed by an EOR?

• Yes, the employee is aware that the EOR is their legal employer, but they understand that their day-to-day work is managed by your company.

17. What are the risks of not using an EOR when hiring internationally?

• Hiring without an EOR can expose your company to risks such as non-compliance with local tax, labor, and employment laws, leading to fines, penalties, and potential legal action. EORs help mitigate these risks by ensuring legal compliance.