Common myths about Employer of Record (EoR)

Expanding globally without establishing a local entity can feel daunting. From labor laws to payroll compliance, international hiring is complex — and that’s where Employer of Record (EOR) services come in.

An EOR enables companies to hire and manage employees in new countries legally and efficiently, without creating a local subsidiary. Yet, despite growing awareness, many myths about EORs still cause hesitation among businesses.

In this article, we debunk the most common Employer of Record misconceptions and explain the real value of partnering with an EOR.

Employer of record services: Myths vs reality

Before diving into misconceptions, let’s clarify what an Employer of Record actually does.

An EOR acts as the legal employer for your international employees, handling payroll, taxes, benefits, and compliance — while you retain full operational control.

This model helps you expand globally faster, without the cost or complexity of setting up an entity.

Despite the growing popularity, EOR services are constantly being misunderstood. Misconceptions about what an EOR truly does and who it is for can prevent businesses from utilizing it to its full potential.

Myth 1: An EOR is just a staffing agency

Multiple businesses tend to confuse EOR services with a traditional staffing or recruiting agency. While staffing agencies might help candidates, an EOR will go beyond just hiring.

• Staffing agencies will provide candidates; however, the company will still handle taxes, benefits, payroll, and compliance.
• EORs will act as a legal employer for the international employees, handle the payroll, taxes, benefits, compliance, and employment contracts, while also maintaining control over the operations.

In simple words, an EOR is more than just finding the right talent. It is also about handling them compliantly and efficiently.

Myth 2: You lose control of the employees

Some companies will hesitate primarily because they fear losing authority over the team. This is one of the most common Employer of Record myths, and the reality, however, is quite the opposite.

• You tend to retain entire operational control over the employees. This includes project assignments, performance management, company culture, and day-to-day supervision in your hands.
• The EOR will only handle the legal and administrative responsibilities, such as taxes, benefits, payroll, and labor law compliance.
  

This partnership will enable you to focus on the growth of the business while also staying fully compliant across borders.

Myth 3: An EOR is only for large corporations

Another Employer of Record myth is that EOR services are made exclusively for multinational companies.

• In fact, SMEs and startups can benefit significantly from an EOR, as it allows them to enter new markets without the cost or complexity of setting up a local entity.
• Businesses of any size can hire globally in days, not months, while also ensuring compliance with local labor laws and regulations.

An EOR is a scalable solution for businesses of various sizes looking to grow internationally.

Myth 4: EORs are only meant for short-term projects

Some tend to think that EORs are only suitable for freelancers or temporary contract-based work. However, EORs can easily handle both short-term and long-term employment.

• If you require talent for a single project or would like to build a permanent team globally, an EOR can handle it.
• They will provide full-time employment, compliance management, and benefits, thus making them a reliable solution for long-term workforce planning.

This means that you can expand your global team confidently, whether it is temporary support or permanent hires.

Want to understand how much it really costs to partner with an EOR? Read our detailed breakdown of Employer of Record costs

Why Choose Global Squirrels as Your EOR Partner

Global Squirrels is an all-in-one hiring, payroll, and compliance platform that enables businesses to employ global talent quickly and safely.

1. Flat-fee pricing model

Global Squirrels operates on a transparent, flat-fee pricing model. This eliminates the hidden charges and unexpected costs. You only pay for their monthly payroll costs and our platform’s flat fee. Whether you are hiring a single employee or scaling across countries like India, the Philippines, or Mexico, you can see the hiring cost details on our platform.

2. Ensure data privacy and security

We safeguard employee information, and it’s our top priority. We follow strict international data privacy standards, which include standard compliance rules and secure systems to store and process sensitive data. We establish clear agreements that outline data handling policies, thus ensuring that the talent cannot bypass data outside the business.

3. Simplifying compliance complexity

Global Squirrels takes the complexity out of international employment by taking care of all the aspects of local labor laws, contracts, statutory obligations, and benefits on your behalf. Our team of compliance experts stays updated on regulations across multiple regions, which ensures that your payroll, contracts, and HR processes are fully compliant, reducing the risk of legal violations or regulatory errors.

If you are wondering how our EOR platform works, Global Squirrels offers three plans to hire, manage, and pay your remote talent beyond borders.

4. Flexible Global Hiring Plans

With the Orange Plan, we recruit top talent based on your job and handle the administrative operations of the hires.

The Purple Plan will streamline onboarding for talent you have already identified, and also covers payroll and benefits management.

The Blue Plan is perfect when you want your hire to work from our designated offices in Mexico, the Philippines, or India for seamless productivity and management.

Similar to the other plans, we handle onboarding and HR activities, ensuring a smooth, compliant setup and efficient global workforce management.

Final Thoughts

Employer of Record services are not just for big companies—they’re a modern solution for businesses of all sizes seeking safe, fast, and compliant global expansion.
By separating compliance from operations, an EOR like Global Squirrels lets you focus on growth while we handle the rest.