Published on 30th November 2023
A few years ago, when a company wanted to expand globally, they hired an accountant or a corporate service provider to organize an entity or establish their footprint abroad, and when ready, they could hire locally. Or, if they wanted to send an employee abroad, they hired an umbrella company which managed work permits and often, the related employment and payroll services.
With globalization and increased expansion, this activity has complexified. More services are being provided, adding support with immigration and industry-specific issues to the more traditional payrolling and benefits payments. Enter “Employers of Record” (EOR), a model aggregating those services. In the last 4-8 years, the industry has “hyper-grown”, becoming a bit of a disruptive force for employment policies.
“Our promise to help companies employ in any country, almost as hassle-free as they do in their home country,” explains Johan Opperman, CEO of Parakar, a leading European company in the sector and a member of the World Employment Confederation (WEC). “The EOR sector may be young and complex, but our ambition is to bring progress and innovation to the world, in a compliant and quality manner.”
With only a few countries having explicit legal frameworks supporting EOR, the sector is started to wonder whether it needs to organise itself at global level and advocate for better fitting legislation. In November 2023, the World Employment Confederation, at the initiative of Parakar, brought together more than 20 companies from the sector to discuss the regulatory challenges faced by Employer of Record (EOR) services and the potential need for joint advocacy and self-regulation.
Participants discussed various cases of current legal and regulatory concerns. The variation across national legislation, especially around the split of responsibilities and liabilities between the employer and the service provider, creates uncertainty for the industry and makes it more complicated to set up compliant operations.
“Labour mobility is an evident solution to the most acute challenges that labour markets currently face: labour shortages and talent scarcity,. Therefore, the moment is right for EOR companies to unite and work together with governments in order to smoothen labour mobility,” explains Denis Pennel, WEC’s Managing Director. “The World Employment Confederation stands ready to use its experience from dealing with regulatory challenges and from developing quality standards in the agency work to support those endeavors. The sustainable growth of EOR services can only contribute to WEC’s vision of enabling better labour market outcomes for all,” he adds.
Following this first meeting, EOR companies agreed to continue confronting their experiences and to further investigate the set-up of a dedicated network for the sector within the World Employment Confederation.
