A Guide to Choosing an Employer of Record Service Company 

When you’re ready to start your small business, the first thing you’ll need to do is find an employer of record. An employer of record is an organization that will store your company documents like your tax returns and business licenses and serves as the point of contact for government agencies, such as the IRS and the Department of Labor.  

An employer of record is also an important part of your small business structure, as it can help you expand your reach and grow your business. But when you’re starting, you have many questions, and the last thing you want to do is make the wrong choice. 

Employer of record services helps small businesses keep accurate employee records and comply with government regulations. By acting as the business’s employer of record, an employer of record service company can help small businesses stay in compliance with government regulations and save time and money by managing their employee recordkeeping and compliance needs.  

But choosing the right employer of record service isn’t easy. It’s important to research and find a company that offers the features you need for a great cost. 

employer of record working on his desktop

Questions to Ask Before Hiring an Employer of Record 

Do They Operate in the Destination Country? 

If you’re opening a foreign business, you may be tempted to hire an employer of record service provider based in an easier location for you to navigate. But before you invest in any particular company, you should be sure they operate in the destination country and have the proper government authority to work with your business.  

If they’re based in a difficult location for you to navigate and get around, they may not be able to help your business operate as effectively as possible.  

Are They Compliant with Local Employment Laws? 

It’s also important to ensure that the employer of record service provider you choose complies with local employment laws. If they aren’t, you may end up paying penalties or facing other consequences for breaking the law.  

You should consider asking the company if they are licensed with the local government, have the proper government authority to operate as an employer of record in your country, and accept and process payroll for the employees working in your company. If you’re unsure, it’s best to go with a company that can answer these questions for you. 

Have They Worked with Similar Businesses in Your Industry? 

Another question you should ask when hiring an employer of record service provider is if they have worked with similar businesses in your industry. You want to make sure that they are familiar with the type of small business recordkeeping services you’ll need and that they have experience working with other businesses in your industry.  

If they don’t have these qualifications, it may signify that they aren’t the right fit for your business.  

employer of record having a discussion

Do You Need an Employer of Record to Help You? 

Without a doubt, an employer of record is a substantial factor in achieving your company’s goals. Payroll, taxes, and employee benefits are a few of the important aspects that a company should take care of to ensure that everything is running well.  

Entrusting these responsibilities to a team of knowledgeable professionals relieves you of the unnecessary stress you should be carrying as a business leader. If you think you could use some help on these administrative tasks, call us at ClearPath today.  

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