What are the compliance responsibilities of an Employer of Record?

An Employer of Record is responsible for ensuring local employment compliance on behalf of the client company. This includes issuing compliant employment contracts, running payroll accurately, withholding and remitting payroll taxes and social security, and administering statutory benefits in line with local labour laws. The EOR must also manage employment lifecycle events such as onboarding, leave administration, contract changes, and terminations in accordance with local legal requirements. In addition, the EOR is responsible for maintaining employment records, supporting audits, and monitoring changes in local employment legislation. While the EOR assumes these operational compliance duties, the client company should still understand how responsibilities are allocated and ensure the EOR is applying local law correctly.