EOR services are in all time high demand, specifically in countries like Singapore where the recent stringent regulations on work pass quota has disrupted the whole corporate.
The concept EOR is not too old but it’s also true that there has been confusion prevailing about its core operating principles and process. The one among the most talked about factors concerning EOR is the compliance. As, when a business plans to hire EOR services, it’s about acquiring workforce from different nations, then it’s obvious wondering about how come the EOR will manage compliance in different compliance and stay adhered to the statutory regulations.
Compliance is a necessary aspect of any business, be it in any nation. A business must ensure compliance when it comes to different operations or any third party involvement. How an EOR operates ensuring complete compliance is discussed below in this post.
What Is The EOR Model For Hiring?
An EOR operates as a legal employer for a company to talent hunt, recruit, onboard and manage the workforce while providing complete access to the company in total control of its operations and how they utilize their team. The main idea is to eradicate the complexities of HR services like payroll, taxes and other labour laws pertaining to the particular nation, their visas, work permits, local benefit administration, onboarding and termination, and employment contracts.
Also Read: How to hire an employee in India
The EOR will be there as a local entity in different countries, handling all the legalities and hiring proceedings while the company simply pays to the EOR service provider and uses the team as per their needs focusing on its operations.
This becomes even more helpful when a company needs to hire in other countries as the EOR being a local entity will make it easier to expand without any complications of labour laws, establishing its own entity and being compliant with other statutory norms and regulations.
What Does EOR Compliance Mean For A Business?
EOR provides options to expand teams overseas but businesses must stay careful when they are hiring from different nations as requirements vary by country, and must be ensured by your EOR partner. Every country has its own set of regulations for a business to operate legally and EOR must be a legally operating unit in the country they are providing you talent from. EOR must be efficient enough to handle oversea taxes, benefits, and the total wages as per the local norms. To function rightly and undertake legal responsibilities, it is also crucial that a company using EOR has formed a system in place to monitor and keep track of the ongoing important processes and ensure compliance. A business using EOR is never directly responsible for ensuring compliance to local labor laws in other countries, but any discrepancy or uneven set of operations could tarnish the image.
Employers are best advised to withhold federal income tax from their workforces from different countries and verifycheck with EOR for complete adherence. This action from the business will keep the employees directly connected and valued in their workplace. Mandatory benefits for employees must also be checked and monitored periodically if they are in complete compliance from your EORl. Compliances like Social Security contributions and Health Maintenance Organization (HMO) for their future and security purposes must also be verified with EOR before you sign the contract.
Why Use EOR Services For Hiring?
EOR is the future of how employers have been hiring, how is this addressing challenges which earlier seemed like that they cannot be bypassed is discussed below;
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Reduced Risk:
EORs ensure all complete compliance to local labour rules reducing the chances of getting into legal complexities. -
Speed and Flexibility:
Speed and flexibility comes with EOR, as companies will be focusing more on their operations and could rapidly hire employees overseas and scale up or down their reach as required. -
Cost-Effectiveness:
EORs handle everything ranging from onboarding to payroll, benefits, and compliance, minimizing the need for spending resources on HR management and accounts internally. -
More Focus on Core Business:
Administrative tasks will be managed by the EOR, the company can emphasize on their core strategies and operations enabling them to achieve desired revenue and enhance quality of their services or products within the industry.
Recruitment Central As Your EOR Partner
Some of the recent developments in the labours laws by MoM has introduced regulations which clearly that EORs cannot directly apply for any work passes for the foreign workers on behalf of overseas companies, which implies;
Also Read: The Future of Work: Remote Employers of Record
Key points about the Singapore EOR ban
- – No visa sponsorship:
EORs would only be able to hire local employees and cannot sponsor work passes for foreign workers employed under the overseas companies. - – Local presence required:
Foreign companies who need to hire foreign talent in Singapore must establish a registered local entity to request for sponsoring work passes. - – Compliance with MOM regulations:
Any attempt out of the conditions mentioned above by an EOR for getting visas for foreign employees working for non-Singaporean companies, would clearly be considered a violation under law.
It’s important to understand your options while you select EOR services in Singapore, know their history, their registered entities in Singapore, a one single loose step can put your whole sum of hardwork building your organisation in danger.
Conclusion
It’s not only about EOR, it’s about any operations of your business which you outsource to be operated by a third party. Your admin must not only be settling the invoices month after month, they instead add value to the process by monitoring and keeping a track of local contributions from wages, benefits/perks to the employees, leave benefits as required along with other coverages which any country’s local labor laws demand.
