How an Employer of Record Can Help with Benefits

Posted by: Rod Kurtz on April 24, 2006

Your early-stage company may not be able to afford an HR department, benefits, and many other pieces of today’s employment puzzle, but you can hire them all. Instead of a simple payroll company, choose an employer of record firm. Legally, they are the employer of your employees, whom you essentially rent. You, the client, hire your people, set the pay scale, and determine the employment agreement. The employer of record handles benefits — including 401(k) and other retirement, insurance, state and federal deposits — and employee taxes and reporting. They also provide you with an employee handbook, personnel counselors, as well as coaching for you, the business owner, on how to work with your employees.

If you as the owner want to be paid regularly, you too can become a company employee and enjoy the benefits that big companies offer. The employer of record company has a huge employee count that allows them to negotiate benefit plans at far more favorable rates than you could get on your own.

Having used the service, I found that it cost less than paying a bookkeeper to do the payroll tasks, and that the employees were less stressed and more focused on their work after the employer of record was hired.

Marilyn Holt, CMC
Holt Capital
Seattle

Reader Comments

Chad

April 24, 2006 6:35 PM

Where can I find a list of employers of record in Georgia?

Robert Caldarella

October 10, 2006 11:28 AM

My company, Oasis Outsourcing, is one of the largest employer-of-record firms (also known as PEO/Professional Employer Organization) in the nation, with literally thousands of "employees" across all 50 states. We provide comprehensive services that include payroll administration, group health insurance and employee benefits, retirement plans, workers' compensation and HR administration for companies with 5 to 500 employees. Many companies find that it much more cost effective to outsource these functions to a company like ours, and are able to offer a much better employee benefits package through us. Feel free to contact me anytime for more information.

Robert Caldarella
Oasis Outsourcing
(770) 804-8433 x 13

PEO Advisor

November 27, 2006 11:40 AM

Outsourcing human resources tasks makes sense for small- and medium-sized businesses. There are over 400 HR outsourcing companies operating in the USA. With hundreds of HR outsourcing options in the United States, selecting an HR outsourcing company can be time consuming. Many states require a HR outsourcing company to be licensed in order to do business (like Georgia). In addition, each HR outsourcing company has different risk tolerance (for work comp insurance), health insurance offerings, and general HR outsourcing service capabilities.

Liz

November 7, 2007 6:03 PM

Another option is a Portable Employer of Record, or PER. This solution works best for independently-minded consultants and contractors your business engages as 1099s. There is a lot of risk associated with hiring 1099s, so if this applies to your firm, check out MyBizOffice. You may be exposed to more risk than you realize, and working through a solution like this will be beneficial for both your company and the individuals you are hiring.

Susan

January 23, 2008 12:21 PM

My colleagues and myself have used an Employer of Record company for years. I have tried many in search of the one that fits all my needs, and Yurcor (www.yurcor.com) has stood above the rest. Please don't take my word for it, give them a call. They offer you the most user friendly online solutions, backed by friendly, and informative customer service. I always have someone there when I need them.

Richard

April 7, 2008 10:19 AM

hands down the best employer of record out there; I've spent months interviewing multiple peo's and eor's. We decided to go with MBO Partners

online payroll outsourcing

September 30, 2008 3:29 AM

1)There is a huge reduction is cost: If taken a general view the direct cost of payroll can be easily be reduced if we outsource payroll services.
2)The personal involvement and pain taken to manage payroll activities would be eliminated.
3)Payroll processing is a time-consuming process.
4)Outsourcing payroll can free up staff time to pursue more important value-added and revenue-generating activities.
5)The headache involved in technological updations is also not required.
6)By outsourcing payroll, a small business can take advantage of expertise that was previously available only to big companies.
http://www.acepayxpress.com

John C

October 13, 2008 4:01 PM

Our niche IT/communications consulting firm has offices in four states, and we deploy consultants all over the US. After a lot of checking, we ended up with MBO Partners. They are perfect for our needs, since we wanted competitive benefits in many different states and we needed a portable EOR that would work with the consultants no matter what state they were working in.

MBO goes wherever our consultants go, seamlessly, and the online system makes everything pretty convenient. Finally, I feel good that our IRS compliance for contractors is all buttoned up.

Rodney Gibson

April 7, 2009 11:32 AM

It is great to come across this discussion! Before I started interviewing with Ambrose (provider of these types of services), I was not familiar with the whole PEO/EOR/PER model.

At first, I was a bit skeptical but it has been a pleasant surprise to see how many people are already benefiting from this model -- and to see how many out there could benefit, especially in our current economic environment.

Many stories of companies saving significant dollars on health care, similar to the discussion here, float around our company. (Most save enough on health care alone that our fee for their rest of their HR back office admin is virtually free.) I truly do feel like I am serving, not selling, when I encounter a potential new partner.

That being said, we are more selective than most of our peers so we enjoy the luxury of a more attractive risk pool (mostly hedge funds, private equity firms, and VC-backed tech) resulting in amazing rates for our clients, coupled with white glove service. It is all about finding the right fit with a firm that can best serve your specific needs.

If I can be of any help, please reach out to me...

Rodney Gibson
VP Sales, Ambrose Group
646.356.8674

Dan Horrell

October 21, 2009 1:04 PM

Staffing agencies often use this type of model to employ thier temps as temp workers ofen include high turn over and placements in several states that the agency may not be set-up in and they must have thier staff focus on sales rather than wasting down time on operations in order to stay profitable. Our firm services mainly these types of clients but we service businesses directly as well and provide a "full service option" which includes not only EOR and payroll processing services but also payroll/tax funding, invoicing for thier clients and full HR support. This gives our clients a comprehensive option all with one provider and leaves them to focus on the more important tasks of sales and customer service. There are lots of variations in the market on EOR services so it's just a matter finding the service that matches all of your specific needs.

Dan Horrell
Clover Resource Solutions, Inc.
VP Operations
(877)223-1791
www.cloverresource.com

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