9 min As businesses venture into the global market, they often encounter a maze of employment laws, regulations, and tax systems across various countries. This is where the Employer of Record (EOR) steps in, cutting through the complexity of int
A successful business needs to expand into new markets, but it comes with its own challenges. Businesses face a never-ending spiral of employment laws, payroll taxes, and compliance issues when hiring beyond borders. That’s where the Employer of Record (EOR) steps in.
So, what is an employer of record? To put it simply, it’s a trusted third-party organization that legally hires talent for your organization while you have day-to-day control over work. It’s one of the most efficient ways for businesses to expand without stumbling over lasers.
What Is an Employer of Record?
An employer of record is a global partner that acts as the legal employer for your international workforce. The EOR manages onboarding, payroll, taxes, and compliance, while you focus on expanding your business.
Think of it as hiring someone to do the HR and legal heavy lifting so you can concentrate on strategy, sales, and customer experience. For companies, especially those entering new markets, EOR reduces compliance risks while increasing speed.
One might think, “Why should I use an EOR instead of setting up my own entity?”. The answer is simple. Establishing a legal entity in another country takes a lot of paperwork, thousands of dollars, and endless legal resources. With Procloz, you skip this process and gain instant access to compliant hiring structures, saving both time and money.
The Demand for Global Talent
The modern workforce is no longer closed off to one place. Hybrid work culture, digital connectivity, and international collaborations have opened opportunities for businesses to hire the best talent worldwide.
In 2022, the global employer of record market was valued at USD $4.45 billion and is expected to reach USD $6.6 billion by 2029, growing at a CAGR of 6.8%
The main drivers of this growth include:
- A growing need for global expansion by startups and enterprises.
- Lower HR setup costs compared to incorporation or subsidiaries.
- Simplified immigration, payroll compliance, and employee onboarding.
- The ability to attract top professionals without being restricted by borders.
From tech companies hiring developers in Asia to consultants poaching specialists in Europe, what is an employer of record? EOR solutions are quickly becoming the go-to method for workforce management and international hiring. But what about American companies? For companies wondering what is an employer of record, it is essentially a calculated solution that allows them to hire abroad without establishing a local entity.
With Procloz, it’s simple. Instead of juggling multiple providers, you receive one consolidated invoice while we handle the rest. From paying employees across states or overseas in their local currency to managing federal and state taxes, Social Security, Medicare contributions, and employee benefits, Procloz ensures payroll runs accurately, compliantly, and on time. The result? A smooth, stress-free payroll experience for both you and your team.
How Does an Employer of Record Work in The USA?
The essence of an EOR lies in its simplicity. For companies still asking what is an employer of record, the answer is straightforward and easy to understand. An EOR like Procloz takes care of complicated local employment responsibilities in the US, while you remain in control of your team’s operational side.
Here’s how it works in practice for American businesses:
- Simplified Compliance – The US has a complex system of federal, state, and local labor laws covering minimum wage, overtime rules, tax obligations, healthcare, and retirement contributions. Procloz manages all of these regulations, preventing the risk of IRS penalties, Department of Labor violations, or state-level fines.
- Co-Employment Model – The EOR becomes the official legal employer in the US, while you continue to oversee the daily operations of your employees. This structure gives you full control while ensuring compliance from hiring to payroll.
From drafting compliant employment contracts, managing Form I-9 and W-4 requirements, handling healthcare enrollments, and ensuring proper visa sponsorship for foreign employees, Procloz makes onboarding seamless.
Risk Mitigation – Compliance risks in the US such as employee misclassification, wrongful termination claims, or wage-and-hour disputes, are minimized with the EOR structure.
Imagine you’re an India-based company hiring US employees. Without an EOR, you’d need to set up a US entity, hire employment lawyers, and manage payroll compliance with the IRS and state authorities, a process that can take months. With Procloz, you can employ skilled US professionals in a matter of weeks while staying 100% compliant.
Can an Employer of Record help with compliance in the US? The answer is yes. Compliance is one of the main components of what an EOR does. With Procloz, every employment contract, benefits package, and termination policy is aligned with US federal and state labor regulations helping you avoid disputes, penalties, and reputational risks.
Benefits of Partnering With an Employer of Record in the US
Partnering with an Employer of Record in the US provides a strong competitive edge for both local and global companies. Here’s why businesses across industries choose this model:
Faster Market Entry – Instead of waiting months to establish a US entity, foreign companies can hire local employees in weeks.
Cost Savings – Avoid expensive setup and administrative costs tied to registering with the IRS, state agencies, and healthcare compliance systems.
Scalability – Easily expand or reduce your workforce in response to market demands across the US’s dynamic industries like tech, healthcare, and finance.
Focus on Growth – Free your HR and legal teams from compliance headaches so they can focus on business expansion.
Expertise – With Procloz, you gain access to deep local knowledge of US employment laws, taxation systems, and labor market trends.
For businesses planning multi-country expansion with the US as a hub, these benefits multiply quickly—transforming a complex hiring process into an agile growth strategy. And for leaders still asking what is an employer of record, it is the bridge between hiring the right people in the US and maintaining full compliance while scaling globally.
Final Thoughts
Now that you know what is an employer of record and specifically how it works in the US, the next step is choosing the right partner.
By working with Procloz, businesses get a seamless way to hire across borders without creating a local presence. That means faster entry into the global markets, fewer delays, and a smoother experience for employees.
At Procloz, we combine expertise, local knowledge, and proven processes to help businesses expand confidently in the US and beyond. Our solutions cover everything from payroll to compliance, making us a trusted partner in business process outsourcing and global hiring.
Whether you’re a startup looking to enter the US market or an established enterprise scaling internationally with US operations, Procloz ensures you can hire the best talent anywhere, anytime.
Ready to tap into global talent with a trusted Employer of Record in the US? Procloz is here to help. Contact us today to learn more.
ernational hiring and giving companies seamless access to global talent. Curious about what an EOR actually is and how it works? Let’s break it down and dive into this game-changing solution for workforce management.
