Employer of Record (EOR)
Definition
A legal entity that handles employment responsibilities on behalf of another business.
What is an Employer of Record (EOR)?
An Employer of Record (EOR) is a third-party organization like ExtensisHR, that legally employs your workers on paper while you manage their day-to-day duties. This means we take care of payroll, tax filings, benefits, and compliance, while you retain full operational control.
Why is an EOR Important for Employers?
Handling HR and compliance can be challenging, especially for growing companies, those operating across multiple states, or organizations with lean in-house teams. An EOR helps navigate these complexities by reducing compliance risks and streamlining HR processes, allowing your business to focus on more strategic goals.
- Minimizes the risk of employee misclassification
- Simplifies multistate employment
- Offers enterprise-level benefits regardless of company size
FAQs
Is using an EOR legal?
Yes. Co-employment is a legal and compliant model supported by the IRS and DOL.
Does the EOR own my employees?
No. You still manage your team—work assignments, promotions, culture. We just handle the legal and “paperwork side” of employment.
What if I have employees in multiple states?
We’ve got that covered. ExtensisHR helps manage all state-level compliance requirements.
How ExtensisHR Can Help
As your EOR, ExtensisHR becomes the legal employer for tax and benefit purposes. You maintain authority over your team and business operations, while we handle:
- Payroll administration
- Tax compliance (federal and state)
- Benefits management (medical, dental, vision, 401(k), etc.)
- Risk mitigation (workers’ comp, EPLI)
- Government filings and notices
This co-employment model keeps you protected and lets you offer top-tier benefits to attract and retain talent.
Related Terms
- Professional Employer Organization (PEO)
- Payroll Tax Filing
- Workers’ Compensation
- Employee Classification
- Form I-9