Why We Offer Customized PEO and EOR solutions in the US
Entering the US market can be a daunting task for companies, especially when navigating the complexities of employment laws and regulations. At In2America we provide a number of solutions including a Managed PEO (Professional Employer Organization), which can be a game-changer for businesses seeking to expand into the United States. In this post, we’ll discuss the key differences between a PEO and an EOR (Employer of Record), as well as why our unique solutions that can be customized to help streamline your expansion process.
Understanding PEO vs. EOR
The primary distinction between a PEO and an EOR lies in their legal roles and the scope of services they offer. A PEO acts as a co-employer, allowing your company to maintain control over its employees while outsourcing some HR responsibilities like payroll, employment taxes and benefits administration. PEOs are particularly beneficial for companies with a domestic workforce and physical presence, or those concentrated in a single location looking to alleviate some of that HR burden.
In contrast, an EOR serves as the sole legal employer of the workforce, assuming full responsibility for compliance, payroll, employment taxes and benefits. This arrangement is especially advantageous for international companies hiring employees in new countries where they lack a local entity or for testing the market from overseas. EORs simplify the hiring process by eliminating the need to establish a legal presence in a foreign market.
The Complexity of the US Employment Landscape
The landscape in the US is more complex than in many other countries. While federal laws and taxes govern the entire nation, each state has the autonomy to establish its own employment laws, which can exceed federal regulations. Adding to the intricacy, some cities impose additional taxes and laws on top of state and federal requirements.
Each state also mandates unique insurance provisions and compliance factors. Failing to adhere to these regulations can lead to severe consequences; for instance, not having the correct workers' compensation insurance can be classified as a felony in some states, potentially resulting in jail time.
For both international and domestic companies expanding across multiple states, outsourcing these complexities may seem like the best solution. However, it’s crucial to understand liability issues and to have checks and balances in place to ensure that you and your employees are adequately protected.
Personal Experiences and the Need for Transparency
When I expanded my business into the US, I relied on several well known EOR and PEO solutions to help scale. I was shocked by the lack of transparency in pricing and the customer service offered. Small businesses, which typically require the most assistance, often find themselves at the bottom of the support hierarchy. When issues arise, they can feel trapped in endless automated chatbots or subjected to long hold times with no resolution.
While it might seem logical to outsource everything to an EOR when entering the US, there are limitations. For instance, an EOR cannot facilitate the relocation of employees on a visa despite what they might claim because you must have your own entity, and those employees need to be directly employed by you. Additionally, issuing share options via an EOR can also be challenging and limiting.
On the other hand, while a PEO provides a way to relocate employees on visas and issue more tax favorable share options, it often lacks the comprehensive HR support necessary to help you navigate your workforce management needs. This leaves many companies managing onboarding, payroll and benefits through software without adequate support.
Tailored Solutions for Your Success
Recognizing these challenges is what inspired our comprehensive service offerings. We aim to simplify your entry into the US market, regardless of whether your employees are on visas or local contracts. By combining the benefits of both PEO and EOR solutions, we ensure that the employee value proposition remains consistent across the board.
We’ve created a customized model that adapts to your needs, whether you’re hiring your first employee or your one-hundredth. Our goal isn’t to maximize profits from your initial hires; rather, we strive to be your employment partner in launching and scaling your operations in America. You get the best advice for your specific situation in every state and the ability to scale at speed with confidence.
With the lessons we learned during our own expansion journey, we turn our initial challenges into opportunities for your growth. We save you years of costly learning experiences, allowing you to focus on what matters most growing your business.
Ready to simplify your U.S. expansion? Let us help you navigate the complex employment landscape and build a workforce tailored to your goals. Together, we can make your American venture a success.
Adrian Kinnersley – CEO In2America