Employer of Record (EOR)
Build your team in China effortlessly, no local entity required. We serve as the employer on paper, handling all employment matters while you focus on leading your team.
What is an Employer of Record (EOR)?
- An Employer of Record (EOR) is a third-party service provider that acts as the official employer for your employees. This arrangement allows businesses to hire globally without establishing a legal entity in each location, or to hire a team during the headcount frozen period.
- With this service, the EOR handles all administrative, legal, and compliance responsibilities, allowing you to efficiently manage your global workforce while focusing on core operations. While the client continues to be the actual employer, managing employees daily work, and taking full responsibility of employees’ work activities.
- EOR is also known as employment outsourcing, employment solution, or employee leasing. In China, EORs are sometimes referred to as Foreign Enterprise Service Companies (FESCo).
In Which Situations Clients Need an EOR
International Expansion
Expand into new countries without the time and cost of establishing a legal entity.
Hiring Remote Employees
An EOR manages local employment laws and regulations when hiring remote staff in various countries.
Temporary Projects
For short-term projects requiring local hires, an EOR offers a flexible solution.
Pre-opening a Business
Hire a pre-opening team to establish initial operations and test the market before setting up a legal entity.
Closing a Business
Retain a team post-closure to manage winding down operations and ensure compliance with local labor laws.
Extra Workforce During Headcount Frozen
Fulfill extra tasks needs when the headcount is frozen.
How Does an EOR Work?
The EOR legally employs workers on behalf of the client company, managing employment contracts, payroll, and compliance.
The EOR takes care of all payroll processing, including salary payments, tax withholdings, and social insurance contributions. They also manage employee benefits such as health insurance and retirement plans.
The EOR oversees HR tasks including recruitment, onboarding, performance management, and offboarding.
Ensure that all employment practices comply with local laws and regulations.
Benefits of Using an EOR
Compliance Assurance
Ensures adherence to local employment laws, reducing the risk of penalties and legal issues.
Cost Efficiency
Avoids the high costs and complexities associated with setting up and maintaining a legal entity in a foreign country.
Quick Market Entry
Facilitates rapid entry into new markets without lengthy setup processes.
Focus on Core Business
Allows businesses to concentrate on their primary activities by outsourcing HR responsibilities.
Access to Global Talent
Ideal for companies that require a small local team to manage business relationships within China, such as sourcing operations or software development, without the necessity of establishing a Chinese entity.
Risk Mitigation
Minimizes risks related to employment law violations and administrative errors.
Benefits of Using an EOR in China
China has intricate labor laws. An EOR ensures compliance with these regulations, including payroll, social insurance, and employee benefits, thereby reducing legal risks.
Navigating Complex Regulations
Setting up a legal entity in China can be both expensive and time-consuming. An EOR allow businesses to start operations quickly and cost-effectively.
Cost and Time Savings
EOR in China possess deep knowledge of local business practices, cultural nuances, and regulatory requirements.
Local Expertise
EOR manage payroll and benefits in accordance with Chinese regulations, ensuring timely and accurate payments.
Efficient Payroll and Benefits Management
An EOR offers the flexibility to hire local and foreign employees, as well as contractors.
Flexibility in Hiring
By assuming employer liabilities and ensuring compliance with local laws, an EOR mitigates the risks associated with employment in China.
Risk Reduction
With an EOR handling HR responsibilities, businesses can focus on core operations and strategic initiatives.
Focus on Business Growth
EOR provide competitive benefits packages and efficient HR support, boosting employee satisfaction and retention.
Enhanced Employee Experience
Key Services Provided by HROne
- Act as the legal employer by signing labor contracts with employees
- Manage employment relationships
- Share employer liabilities with the client, providing added support
- Assist with all aspects of managing local employees, ensuring compliance and efficient operations
- Access all features of HROne EOR services for streamlined HR management
Key Processes of HROne EOR Service
- Initial Meeting: Virtual introduction between client and Account Manager.
- Policy Introduction: Overview of relevant policies and online portal functionalities.
- Process and Template Confirmation: Agreement on work calendar, processes, templates, benefits, and salary structure.
- System Setup: Configuration of client-specific policies and templates in HROne’s system.
- System Access: Providing the client with access to HROne’s system.
- Employee Onboarding: Initial employees are onboarded ( see detailed process below).
- Service Start: Official commencement of services.
- Introduction: Client introduces the new employee to HROne.
- Employment Details Confirmation: Finalizing salary, benefits, and employment conditions.
- Authorization: New employee signs a privacy authorization letter.
- Information Collection: Gathering necessary data from the new employee.
- Payment Preparation: Preparing the first payment notice, including any deposits.
- Confirmation and Payment: Client confirms and pays the first payment notice.
- Contract Signing: Signing of the labor contract between HROne and the new employee.
- System Setup: Adding the new employee’s information to HROne’s system.
- Account Setup: Establishing social insurance, housing fund, and bank accounts for the new employee.
- System Access: Providing the new employee with access to HROne’s system.
- Service Start: Official commencement of services for the new employee.
- Policy Updates: Informing the client of any changes in government policies.
- Information Exchange: Client provides payroll-related information.
- Payment Preparation: Preparing the payment notice.
- Confirmation and Payment: Client confirms and pays the payment notice.
- Salary Disbursement: HROne pays the employees’ salaries.
- System Updates: Updating the system with paystubs and reports.
- Compliance: Payment of social insurances, housing fund, and individual income taxes.
- Calendar Confirmation: Confirming the work calendar for the upcoming year.
- Annual Report Preparation: Preparing the annual salary report, including data on offboarded employees.
- Report Confirmation: Client confirms the annual salary report.
- Submission: Submitting the report to government authorities.
- Policy Updates: Briefing the client on new government policies.
- Policy Implementation: Implementing updated policies in the system.
- Data Management: Removing data of offboarded employees upon request.
- Compliance: Filing mandatory benefits, social insurance, and housing fund.
- Termination Briefing: Client explains the reason for termination.
- Solution Provision: HROne provides a professional termination solution.
- Solution Confirmation: Client confirms the solution.
- Documentation: Completing termination documents with the employee.
- Payment Preparation: Preparing the payment notice for severance payment.
- Confirmation and Payment: Client confirms and pays the severance payment.
- Severance Payment: Processing the severance payment.
- Termination Certificate: Issuing the termination certificate.
- Account Management: Transferring or archiving related accounts and removing system access if required.
- Case Closure: Ensuring all unsettled cases are closed.
- Refund: Refunding the deposit balance.
- Service Termination: Confirming the termination of the service.
- Handover Process: Confirming the handover process, including accounts, materials, and information.
- Employee Offboarding Plan: Confirming the plan for offboarding employees.
- Final Payment Preparation: Preparing the last payment notice, including any historical balance.
- Confirmation and Payment: Client confirms and pays the last payment notice.
- Employee Offboarding: Offboarding the employees.
- Handover Completion: HROne hands over accounts, materials, and information to the client.
- Case Closure: Ensuring all unsettled cases are closed.
- Refund: Refunding the deposit balance.
