There are many reasons why employers may choose to hire foreign workers. Sometimes, it may be because they can fill a skills shortage in the company. In other cases, it may be because they are willing to work for lower wages than local workers. However, there can be several problems associated with hiring foreign workers.
From the recruitment process to the visa bit to facing immigration and relocation and even helping the foreign worker adapt to the new culture and climate.
No matter how large or small your business is, it’s important to make sure you’re in compliance with employment and labour law in Malaysia. There are rules and regulations of foreign worker recruitment that you have to follow, from work pass application, work permit renewal, wages payment, to workplace safety, etc.
Along with the tough competition happening in the market, small business owners are finding ways to get through it. One of the ways they consider it is to have an Employer of Record (EOR), but why do these owners choose to have it for their business? This blog will walk you through the answers.
What is Employer Of Record (EoR)?
An Employer of Record (EOR) is a helpful bridge for small and global businesses. When a company wants to hire workers in a foreign country where they don’t have an office, the EOR steps in. They become the official employers for these remote staff members, taking care of all the legal employment and administrative tasks on behalf of the company. This also makes it easier for businesses to hire internationally and ensures they follow all the rules and regulations in the foreign country.
The EOR takes on all the legal and compliance obligations, while you retain the day-to-day relationship with the team member as usual. While they are primarily used for this purpose, EORs can also function domestically. In some countries (like the US, Canada, and Australia), different states or provinces have different taxation and employment requirements. In situations like this, a local employer might choose to partner with an EOR just to simplify their HR processes.
EORs typically take on HR administrative duties, run payroll, provide compliant benefits, and manage taxation obligations. They serve as the employing entity, so when you partner with an EOR, you don’t need to establish a legal entity in your hire’s country.
You also don’t need to spend time, money, and resources on building the required knowledge in-house. The best EOR providers guide you through every step, with in-built local expertise and strict guardrails to keep you compliant.
With a reliable EOR partner, you can quickly and safely hire and pay workers globally.
How does it work?
An Employer of Record (EOR) officially hires employees in other countries on behalf of their client. For example, if your company is legally registered in the United States and you want to hire an employee in Portugal, you can do so through an Employer of Record (EOR).
In this partnership, the employer (client) is still in charge of the employee’s day-to-day operations — such as tasks, meetings, performance reviews, and termination decisions — while the EOR handles the administrative burden of managing a foreign workforce.
Our team of HR professionals and legal experts will help you stay compliant and get ahead of changing regulations globally by keeping up with local updates in every country we service.
Leveraging an Employer of Record (EOR) service empowers businesses to access a global talent pool without limitations. By eliminating geographical barriers, organizations can attract top-tier professionals from diverse backgrounds, fostering both innovation and inclusivity within their workforce.
In conclusion, no matter how many advantages we have by hiring a foreign worker, it is still not easy to hire a foreign worker as the government has set very strict rules on the application process. The process is complicated, and you might be blacklisted if you accidentally cross the line. Our team of HR professionals and legal experts will help you stay compliant and get ahead of changing regulations globally by keeping up with local updates in every country we service. With PeopleX as your EOR partner, you’re positioned to unlock global opportunities and achieve unprecedented success.
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