An Employer of Record (EOR) in the UK is a company that takes on the responsibility of being the legal employer for a worker. This includes managing payroll, benefits, and other employment-related tasks on behalf of the worker's actual employer.
Discover the key considerations and essential details you should be aware of before opting for an Employer of Record (EOR) in the United Kingdom (UK).
On this page: Employment Contracts | Minimum Wages | Payroll in the UK | Employment Laws | Social Security | Personal Income Tax | Employees vs Independent Contractors | Employment Rights | IR35 | Work Permits and Visa
Employment Contracts in the United Kingdom (UK)
Employment contracts in the UK can be either verbal or in writing. All legally classified workers who started their job after 6th April 2020 are entitled to receive a written statement about the terms and conditions of the employment. A written statement is different from an employment contract. A written statement contains the important details about the employment such as salary, working hours, job title, scope of work, and more. An employment agreement might include clauses such as confidentiality, code of conduct, policies like GDPR, and more.
The relationship between an employer and an employee is considered formal from the date the employee starts working, even if the employer failed to provide a written statement or an employment contract. The work contract may be deemed formal if the employee meets all the requirements set by the employer, the terms of employment are mutually agreed upon verbally or in writing, and the employee accepts the job offer verbally or in writing.
Types of employment contracts in the UK
- Fixed-term
- Permanent
- Casual
- Zero-hour
In the UK, the employer of record, often with the assistance of legal or HR teams, drafts employment contracts to outline roles, benefits, and termination. The employer of record ensures contract compliance and oversees administrative aspects, fostering transparency and reducing disputes.
Minimum Wages
The national minimum wages are progressive and vary based on the age of the employee. In the UK, wages are categorized as the National Minimum Wage (NMW) and the National Living Wage (NLW). The National Living Wage is applicable to individuals aged 23 or above, while the National Minimum Wage is for those aged below 23.
| Wage Band | Current Rate per Hour (from 1 April 2023) |
|---|---|
| Age 23 or over (National Living Wage) | £10.42 |
| Age 21 to 22 | £10.18 |
| Age 18 to 20 | £7.49 |
| Under 18 | £5.28 |
| Apprentice | £5.28 |
For foreign employers operating in the UK, understanding the significance of minimum wages is paramount. As an Employer of Record (EOR), ensuring compliance with UK minimum wage regulations is not just a legal requisite but also a testament to your commitment to fair employment practices in a new jurisdiction. By adhering to these wage standards, you uphold the rights of your workers, mitigate potential legal complexities, and establish credibility in the UK market.
Payroll in the United Kingdom (UK)
Payroll Cycle
In the UK, payroll is typically processed monthly, and salaries are paid during the last five days of the month. Some companies process salaries daily, weekly, and fortnightly. All employers are required to let HMRC know the standard pay day of the month.
Key Considerations for Running Payroll in the UK
Navigating the intricacies of payroll in the UK involves understanding vital aspects that impact both employers and employees. Here's a comprehensive guide to help you stay on top of your payroll responsibilities:
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HMRC (HM Revenue and Customs):
HMRC is the authoritative body collecting taxes and national insurance contributions in the UK.
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PAYE (Pay As You Earn):
PAYE is the system through which employers pay and report taxes and social insurance contributions deducted from employees' salaries.
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Calculations:
Income tax and social insurance contributions are computed based on the employee's tax code and national insurance category assigned by HMRC.
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Recommended Payroll Software:
HMRC suggests various payroll software to facilitate online reporting. These tools calculate deductions based on the employee's tax code. Explore both free and paid options for your convenience.
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Reporting Obligations:
Employers must report employment details, including starters, leavers, and changes in address. Full Payment Submission (FPS) and Employer Payment Summary (EPS) are mandatory submissions covering employee payments, tax deductions, and more.
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Payslip Essentials:
Issuing payslips is crucial. Include gross salary, total tax deductions, social insurance contributions, and working hours. Ensure accuracy and transparency.
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Tax Month Cycle:
The tax month runs from the 6th of one month to the 5th of the next.
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Key Forms:
Familiarize yourself with essential PAYE forms such as P45 (for leavers), P60 (detailing taxes paid during the tax year), and optionally, P11D (disclosing non-cash benefits).
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Conclusion:
Running payroll in the UK demands meticulous attention to detail. By adhering to reporting obligations, utilizing recommended software, and issuing accurate documentation, businesses can streamline payroll processes and ensure compliance.
An Employer of Record (EOR) streamlines payroll management for foreign employers in the UK by leveraging local expertise to ensure compliance with regulations, handling tax deductions, facilitating timely payments, integrating payroll with HR functions, updating employers on regulatory changes, and maintaining meticulous records.
Employment Laws in the UK
Probation Period
Unlike some jurisdictions, the UK does not have specific regulations governing the probation period. However, it is common practice for companies to implement a standard probationary timeframe ranging from 3 to 6 months.
Notice Period
In the UK, the notice period is intricately tied to the duration of employment, emphasizing a graduated approach:
- 1 month to 2 years: At least one week.
- 2 to 12 years: One week for each year.
- 12 years or more: A fixed 12-week notice period.
Payment Options and Calculations
Statutory Redundancy Pay
Statutory redundancy pay is a mandatory provision, calculated based on your age, weekly earnings, and years of service. This calculation is a legal requirement, not subject to employer discretion.
Payment through Notice Period
Under this arrangement, the employer continues to pay the employee during the notice period. The amount is based on the average weekly earnings over the 12 weeks preceding the notice period.
Payment in Lieu of Notice
This option involves immediate termination with a lump sum payment equivalent to the notice period. Like the payment through the notice period, the calculation is based on the average weekly earnings over the 12 weeks before the notice period starts.
Both payment options—whether through the notice period or in lieu of notice—have distinct implications, providing flexibility for employers and employees in managing the conclusion of the employment relationship.
Working Hours
The standard working hours in the UK is 40 per week and 8 hours per day. Average working hours cannot exceed 48 hours in a period of 17 weeks.
Overtime Pay
While paying for overtime is not mandatory, the average pay must not fall below the national minimum wage.
13th Month Salary
It is mandatory to pay a 13th month salary in the UK.
Personal Income Tax in the UK
Income tax in the United Kingdom is a progressive tax, meaning the rate of tax paid increases as income rises. The system operates on a fiscal year basis, which runs from 6th April to 5th April the following year.
Here are key insights:
- Income Types and Exceptions: Income tax applies to specific types of income, with exceptions and available tax reliefs. Learn more
- Tax Codes: HMRC provides tax codes for each employee, aiding employers and pension providers in accurate tax deductions. Learn more
- Personal Allowance: The first £12,570 GBP of income is tax-free, known as Personal Allowance.
- Tax Bands: Tax calculation is based on income distribution across different tax bands.
The main difference in income tax across the UK lies in Scotland:
- Scotland: Has its own devolved income tax system, meaning some rates and bands differ from the rest of the UK. Currently, it has an additional tax band above £150,000 (45% rate) and slightly adjusted rates and bands within the lower brackets.
- England, Wales, & Northern Ireland: Share the same income tax system with three standard bands (20%, 40%, 45%).
Essentially, Scottish taxpayers contribute slightly more at higher income levels and less at lower income levels compared to the rest of the UK. However, other aspects like NI contributions and taxes on savings/dividends remain unified across the UK.
This difference is due to Scotland's devolved powers, allowing it some legislative control over certain areas, including income tax.
Tax Bands in the UK
In the UK, your income isn't taxed one lump sum. It climbs a ladder of tax bands, each with a different rate, ensuring fairness and a smoother ride (well, as smooth as taxes get!).
| Band | Taxable Income | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Personal Income Tax in Scotland
| Taxable Income | Scottish Tax Rate | |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter Rate | £12,571 to £14,732 | 19% |
| Basic Rate | £14,733 to £25,688 | 20% |
| Intermediate Rate | £25,689 to £43,662 | 21% |
| Higher Rate | £43,663 to £125,140 | 42% |
| Top Rate | Over £125,140 | 47% |
(Note: No personal allowance for individuals with income over £125,140.)
Personal Income Tax in Wales
In Wales, personal income tax aligns with the rest of the UK on non-savings and non-dividend income. The Welsh Rate of Income Tax (WRIT) applies to Welsh residents. The Welsh government has the authority to set its own tax rates, subject to change.
In the UK, an Employer of Record (EOR) ensures accurate income tax deductions from employees' wages based on local laws. With current tax knowledge, the EOR correctly withholds amounts from each paycheck and remits them to tax authorities, ensuring compliance and reducing employer liabilities.
Employees vs Independent Contractors in the UK
The classification between employees and self-employed is primarily based on the tax laws and employment laws.
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Employees
- Part of HMRC’s PAYE and payment happens through PAYE.
- Entitled to certain employment rights.
- Works under an employment contract and covered by the employment laws.
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Self-employed and Contractor
- Not part of PAYE.
- Not entitled to the same employment rights as employees.
- Employment laws do not cover the self-employed.
A contractor can be self-employed and can have the employment status of a worker or an employee.
Employment Rights in the UK
In the United Kingdom, employment rights are a cornerstone of the nation's labor framework, designed to ensure fairness, safety, and dignity for all workers. These rights encompass a broad spectrum, ranging from minimum wage and working hours to protection against discrimination and unfair dismissal. Rooted in legislation and further elaborated upon through various legal judgments, these rights serve as a foundation for both employers and employees, fostering a balanced and harmonious working environment.
- Statutory Sick Pay
- Statutory Maternity Pay and Leave
- Statutory Paternity Pay and Leave
- Statutory Adoption Pay and Leave
- Statutory Shared Parental Pay and Leave
- Minimum Notice Periods during Termination
- Protection Against Unfair Dismissal
- The Right to Request Flexible Working
- Time Off for Emergencies
- Statutory Redundancy Pay
Statutory Sick Pay (SSP)
In the UK, employers play a pivotal role in supporting their workforce, especially during times of illness. Statutory Sick Pay (SSP) is a foundational component that ensures employers can provide financial assistance to employees when they're unable to work due to health reasons. Familiarizing oneself with SSP guidelines not only aids in maintaining a harmonious work environment but also ensures compliance with legal obligations.
Guidelines and Considerations on Statutory Sick Pay (SSP) for Employers:
Rate and Duration:
- Eligible employees are entitled to SSP at £109.40 per week.
- This financial support extends for a maximum of 28 weeks.
Payment Protocols:
- SSP should be disbursed in alignment with an employee's regular working days.
- Payments are administered akin to regular wages, inclusive of tax and National Insurance deductions.
Eligibility Criteria:
- Employees should possess a valid employment contract.
- They must have rendered services under this contract.
- A consistent illness period of four days is a requisite.
- The employee's average weekly earnings should meet or exceed £123.
- Employers may request appropriate notification and medical evidence.
Fit Notes and Validation:
- Should an employee be absent for a duration surpassing seven days, a fit note (or sick note) becomes mandatory.
- Fit notes can be provided by a range of medical professionals, encompassing GPs and nurses.
- Both printed and digital versions of fit notes are acceptable.
Specifics and Clauses:
- If an employee briefly engages in work before succumbing to illness, that particular day is exempt from being counted as a sick day.
- Notably, if an employee falls ill during an extended shift, the ensuing day is designated as a sick day.
- It's imperative to recognize that even employees with less than an eight-week earnings history can claim SSP.
For employers in the UK, a clear grasp of SSP ensures a transparent and supportive approach to employee welfare, reinforcing trust and understanding within the organizational framework.
Maternity Pay and Leave
Supporting employees during maternity is both a legal obligation and a reflection of a company's commitment to its workforce's well-being. Here's a concise guide to understanding maternity pay and leave for employers in the UK.
Key Considerations for Employers:
Types of Leave Available:
- Statutory Maternity Leave (SML): Spanning 52 weeks, it's divided into Ordinary Maternity Leave (first 26 weeks) and Additional Maternity Leave (last 26 weeks).
- While employees aren't mandated to take the full 52 weeks, a minimum of 2 weeks' leave post-childbirth is compulsory (4 weeks for factory workers).
- Eligibility for Shared Parental Leave might allow flexibility in how this leave is distributed.
Commencement of Leave:
- Typically, SML can commence 11 weeks prior to the expected childbirth week.
- In instances of early births or if an employee is absent due to pregnancy-related conditions within 4 weeks of the expected childbirth, leave begins accordingly.
Maternity Pay:
- Statutory Maternity Pay (SMP): Lasting up to 39 weeks, SMP provides:
- 90% of average weekly earnings (pre-tax) for the initial 6 weeks.
- £172.48 or 90% of average weekly earnings (whichever is lower) for the subsequent 33 weeks.
- SMP aligns with regular wage payment cycles, with tax and National Insurance deductions in place.
- For those opting for Shared Parental Leave, Statutory Shared Parental Pay (ShPP) is provided at a rate of £172.48 weekly or 90% of average weekly earnings (if lower).
Eligibility Criteria for Employees:
- SML Eligibility:
- Employee status (not just 'worker').
- Submission of appropriate notice to the employer.
- The duration of employment, working hours, or pay scale aren't decisive factors.
- Note: Those having children via surrogacy aren't eligible for SML but can avail of Statutory Adoption Leave and Pay.
- SMP Eligibility:
- Average weekly earnings of at least £123.
- Submission of necessary pregnancy confirmation and notification.
- Continuous employment with the same employer for a minimum of 26 weeks leading up to the 'qualifying week' (15th week before childbirth).
- Even with fluctuating earnings, such as those on furlough during the Coronavirus Job Retention Scheme, eligibility might still apply.
- It's essential to recognize that maternity pay doesn't continue if an employee enters police custody during the pay period.
As employers, understanding and accommodating maternity rights is crucial. This ensures compliance with regulations while fostering a supportive and inclusive work environment.
Paternity Pay and Leave
Introduction:
Recognizing and supporting paternity rights is pivotal for fostering an inclusive and supportive workplace. As employers in the UK, understanding the nuances of paternity pay and leave ensures compliance and enhances employee satisfaction.
Key Considerations for Employers:
Types of Leave Available:
- Paternity Leave: Employees may opt for either 1 or 2 weeks of paid leave, irrespective of multiple births.
- Shared Parental Leave (SPL): Eligible employees can avail of SPL, though they cannot opt for Paternity Leave post SPL.
- Leave for antenatal appointments is permissible, allowing time off for up to 6.5 hours per appointment.
Commencement and Duration of Leave:
- Paternity leave cannot commence before the birth and should conclude within 56 days post-birth (or the due date if earlier).
- Employers should be informed at least 28 days in advance regarding any changes in the leave's start date. Specific dates aren't mandatory; a general timeframe suffices.
Paternity Pay:
- The statutory weekly Paternity Pay rate stands at £172.48 or 90% of average weekly earnings (whichever is lower).
- Payments align with regular wage cycles, with necessary deductions for Tax and National Insurance.
- Employers with company paternity schemes might offer enhanced pay rates but cannot go below the statutory amounts.
Eligibility Criteria for Employees:
- For Paternity Leave:
- Employee status is mandatory.
- Proper notice should be provided.
- Continuous employment for at least 26 weeks leading up to any day in the 'qualifying week' is essential. The 'qualifying week' refers to the 15th week before the baby's expected due date, with variations for adoption.
- For Paternity Pay:
- Active employment up to the birth date.
- Earnings of a minimum of £123 weekly (pre-tax).
Special Conditions and Considerations:
- Paternity Pay and Leave are not applicable if an employee has previously availed paid leave for adoption appointments.
- Those engaged in surrogacy arrangements or same-sex partnerships are also eligible, reflecting the inclusive nature of the regulations.
For employers, a comprehensive understanding of paternity rights underscores a commitment to fairness and employee welfare. It also ensures that the organization remains compliant with the established legal frameworks.
Adoption Pay and Leave
As employers in the UK, understanding the intricacies of adoption pay and leave is essential for fostering a supportive workplace environment and ensuring adherence to statutory regulations. This guide aims to provide clarity on the rights and entitlements of employees when they embark on adoption or surrogacy journeys.
Key Considerations for Employers:
Types of Leave Available:
- Statutory Adoption Leave: Consisting of 52 weeks, split into 26 weeks of Ordinary Adoption Leave and 26 weeks of Additional Adoption Leave.
- Eligibility is exclusive to one person in a couple. The partner can opt for paternity leave instead.
- Provision for paid time off to attend up to 5 adoption appointments post-matching.
Commencement and Duration of Leave:
- For UK adoptions, leave can commence up to 14 days prior to the child's arrival.
- For overseas adoptions, it begins either when the child enters the UK or within 28 days of this event.
- In surrogacy situations, leave starts on the child's birth or the subsequent day.
Modifications and Notifications:
- Employers must be informed within 28 days of any changes in the adoption placement or UK arrival date for overseas adoptions.
- A minimum 8-week notice is mandated for alterations in the return-to-work date.
Adoption Pay Structure:
- Spanning 39 weeks, Statutory Adoption Pay is determined as:
- 90% of average weekly earnings for the initial 6 weeks.
- £172.48 or 90% of average weekly earnings (whichever is less) for the subsequent 33 weeks.
- Payments should align with regular wage cycles, with the necessary deductions for Tax and National Insurance.
- Employers offering enhanced adoption pay schemes cannot provide amounts below the statutory rates.
Eligibility Criteria for Employees:
- For Adoption Leave:
- Employee status is a prerequisite.
- Proper notice and evidence of adoption or surrogacy should be provided upon request.
- For Adoption Pay:
- Continuous employment for a minimum of 26 weeks up to the child-matching week.
- Earnings averaging at least £123 weekly (pre-tax) are essential.
Additional Notes:
- Those adopting from overseas with a partner must complete form SC6 to confirm the exclusion from paternity leave or pay.
By familiarizing themselves with these guidelines, employers can ensure a smooth transition for employees during their adoption or surrogacy experiences, reinforcing a culture of support and compliance within the organization.
In the UK, an Employer of Record (EOR) safeguards employee rights by ensuring adherence to local employment regulations. The EOR oversees fair wage distribution, timely benefits provision, and adherence to work hour regulations. They also address grievances, promote workplace safety, and ensure that employees are treated equitably, upholding a standard of respect and protection for all workers.
IR35 - Off-payroll for Independent Contractors
In the UK, the employer and the independent contractor relationships are regulated through IR35.
IR35 stands for Intermediaries Legislation and 35 is the section of the UK tax code that introduced these rules in 2000.
IR35 will ensure the self-employed individuals pay income tax and national insurance almost the same as regular employees. IR35 applies to the individuals that provide services to an employer through an own intermediary, a partnership or through another individual.
Intermediary refer to entities or structures through which individuals provide their services to clients or end-users. The most common form of intermediary is a Personal Service Company (PSC), which is a company set up by an individual to provide their services to clients.
Work Permits and Visas in the UK: A Comprehensive Guide for Global Mobility
Introduction
As the global business landscape continues to evolve, foreign employers exploring opportunities in the UK often encounter the complexities of work permits and visas. Navigating the intricacies of the UK's immigration system is crucial for ensuring a smooth transition for employees. This guide aims to provide a comprehensive overview of the various work permits and visas available in the UK, catering to the needs of foreign employers seeking assistance in global mobility.
Types of UK Work Visas and Permits
1. Skilled Worker Visa
The Skilled Worker visa is a sponsored working route, allowing skilled foreign nationals to work in the UK. To qualify, applicants need a job offer from a licensed sponsor, a Certificate of Sponsorship (CoS), and must meet specific criteria, including salary requirements and English language proficiency. Skilled Worker visa holders can stay for up to 5 years, with the possibility of extension and potential permanent settlement.
2. Health and Care Worker Visa
Similar to the Skilled Worker visa, the Health and Care Worker visa targets qualified professionals in the healthcare sector. This includes doctors, nurses, and adult social care professionals sponsored by a licensed health and care sector employer in the UK.
3. Scale Up Visa
Introduced in 2022, the Scale Up visa is designed for foreign nationals with high skills or qualifications seeking employment with a UK company in the scale-up phase. This visa emphasizes academic elite status, requiring a job offer, a salary of £33,000 or more, and a Certificate of Sponsorship.
4. Temporary Worker Visa
Temporary Worker visas cater to short-term work purposes with specific categories, such as Charity Worker, Creative Worker, Government Authorized Exchange, International Agreement, Religious Worker, and Seasonal Worker visas. Duration varies from 3 months to 2 years, and eligibility depends on factors like age, job offer, and sponsorship.
5. Global Business Mobility Visa
Launched in 2022, the Global Business Mobility visa facilitates overseas businesses operating in the UK. It includes visas like Senior or Specialist Worker, Graduate Trainee, UK Expansion Worker, Secondment Worker, and Service Supplier. This scheme requires a Certificate of Sponsorship and accommodates stays ranging from 6 months to 5 years.
Work Permits Without a Job Offer
1. High Potential Individual Visa
The High Potential Individual (HPI) visa targets foreign nationals with recent 'degree-level' qualifications from top global universities. It doesn't require a job offer, and applicants are free to find work in the UK. The HPI visa permits a stay of up to 2 years (3 years with a Ph.D.).
2. Graduate Visa
For those who have completed a degree or post-graduate course in the UK, the Graduate visa allows an additional 2 years (3 years with a Ph.D.) to stay and work. While extension and settlement are not possible, applicants can switch to other visa types.
3. Global Talent Visa
The Global Talent Visa caters to leaders or potential leaders in academia, research, arts and culture, or digital technology. It offers stays of up to 5 years, with fast-track settlement options after 3 or 5 years. Endorsement from approved bodies is a prerequisite.
4. UK Ancestry Visa
Intended for Commonwealth and British Overseas citizens, the UK Ancestry visa requires a grandparent born in the UK. This visa allows a stay of up to 5 years, with the option to apply for Indefinite Leave to Remain (ILR) afterward.
Conclusion
Understanding the nuances of work permits and visas in the UK is essential for foreign employers embarking on global mobility. Whether seeking skilled professionals, temporary workers, or exploring options without a job offer,
UK Overview
Overview
| Continent | Europe |
| Country | United Kingdom |
| Capital | London |
| Time zone | UTC−08:00 — Pitcairn Islands |
| Total Time zones | 9 |
| Working hours per week | 40 |
| Working week | Monday–Friday |
| Typical hours worked | 8 |
| Personal Tax filing deadline | 31 January following the end of the tax year. |
| Financial Year | 6 April – 5 April |
| Date format | dd/mm/yyyy |
| Currency | Pound Sterling (GBP) |
| VAT | the standard rate is 20% |
Conclusion
The choice of an Employer of Record (EOR) in the UK is a strategic move for companies seeking global expansion. By delegating responsibilities such as local employment regulations, payroll complexities, and compliance matters to the EOR, businesses can effortlessly establish a presence in the UK, avoiding the intricate process of setting up a legal entity. This collaborative partnership enables companies to concentrate on their core objectives and growth strategies, ensuring that their UK workforce operates in strict compliance with local laws. The EOR simplifies international employment procedures and offers expert guidance in navigating the intricate landscape of UK employment regulations.
Social Security in the United Kingdom (UK)
Navigating the UK's social security system requires a clear understanding of its foundational elements. This section delves into three pivotal aspects: National Insurance Classes, Category Letters, and Contribution Rates. National Insurance Classes describe the various groups of contributions, while Category Letters categorize individuals based on their employment status and pay. Contribution Rates, on the other hand, outline the specific percentages and amounts that both employees and employers are obligated to contribute. A nuanced comprehension of these components ensures accurate compliance and payroll management within the UK's social security landscape.
National Insurance Classes
National Insurance Classes in the UK categorize individuals based on their employment status and earnings.
Category Letters
NI category letters determine the employee and employer's contribution amounts during payroll. Different letters correspond to different contribution percentages based on factors like employment status, age, and pension eligibility. Most employees receive category letter A, and these letters can be found on the payslip. For comprehensive information about all types of category letters, visit GOV.UK.
National Insurance Contribution Rates
Employers deduct these contributions as part of the payroll process. Below are the employer and employee contributions for Class 1.
Employer Contribution Rates for Category A
The employee contribution follows a progressive structure:
Employee Contribution Rates for Category A
The employee contribution also follows a progressive structure:
For details about employer and employee contributions for other categories, refer to GOV.UK.
Class 1A and Class 1B Rates
Employers are required to pay Class 1A and Class 1B national insurance on benefits and expenses provided to employees. The contribution rate is set at 13.8% for the tax year from 6 April 2023 to 5 April 2024.
An Employer of Record (EOR) supports foreign employers in the UK by overseeing social security deductions in line with local regulations. The EOR not only calculates and deducts National Insurance contributions but also ensures these funds are promptly remitted to the relevant social security authorities. By managing these crucial payments, the EOR guarantees that employees are adequately covered and socially secured, while also safeguarding foreign employers from compliance oversights and potential liabilities.