Employer Off The Record (EOR) And Employer On The Record (EONR)

Flexibility On Transition From Employer Off The Record To Employer On The Record

In both models, for the initial setup period, we act as the Employer Off Record (EOR). This allows you to transfer all legal, HR, and compliance responsibilities to us during the early stages of offshore operations. Importantly, in both the employer off record and employer on record models, you retain full control over managing your team’s day-to-day functions, including hiring, firing, performance management, and bonuses. The EOR model offers significant flexibility, allowing you to focus on building and integrating your offshore team without the burden of handling compliance and administrative tasks. You also retain the option to transition to being the employer on record (EONR) when you are ready to take over full legal and administrative responsibilities.

Employer Off Record

Being the Employer Off Record (EOR) means that MYCPE ONE takes care of legal and administrative responsibilities, such as compliance with labour laws, employee contracts, and benefits. In this model, we handle the regulatory obligations on your behalf, allowing you to focus on managing day-to-day team operations, including hiring, firing, and performance management. You retain full control over your team while we manage the legal and compliance aspects. Below are the key pros and cons of this model.

Pros of Being Employer Off-Record

No Compliance Burden

Being the employer off record allows you to transfer all compliance responsibilities, including tax filings, labour laws, and other legal obligations, to us. This relieves your internal teams from having to manage complex regulatory requirements, ensuring compliance without consuming resources or increasing risk. You can focus on core business operations while we handle compliance, claims, and litigation risk.

Tax-Optimized Salary Structures

As an employer off record, you benefit from tax-optimized salary structures that increase employee take-home pay while reducing the overall cost for the company. This ensures better retention and allows you to remain competitive in the job market without incurring additional payroll expenses. This advantage is especially relevant for senior roles, where tax efficiency significantly impacts compensation.

Full Control Over Hiring and Firing

Even though we act as the employer off record, you retain 100% control over all aspects of your team, including hiring, firing, bonuses, and appraisals. This ensures that your firm’s policies and culture are preserved, and your leadership remains fully in charge of key team decisions. This control is retained while we handle administrative and legal tasks.

Quick Scaling and Access to Talent

With us as the employer off record, you gain immediate access to our established network of over 200,000 pre-vetted professionals across 19 cities in India and the Philippines. Our recruitment team ensures you can scale rapidly without the complexities of managing recruitment processes yourself.

Cons of Remaining Employer Off Record

Perceived Lack of Employer Identity

Although you maintain full control over team management—such as hiring, firing, and performance decisions—employees may still associate certain administrative aspects of their employment, like contracts and compliance, with us as their legal employer. This could lead to a subtle distinction in how they perceive their connection to your brand, potentially making it feel less direct. However, strong communication and integration efforts can help bridge this gap and ensure employees feel fully aligned with your company’s culture and values.

Dependency on Us for Compliance

Remaining in the employer off record status means continued reliance on us for managing compliance and HR functions. While this helps ease your operational workload, it places these responsibilities under our management rather than being handled internally

Employer On Record

Being the Employer On Record (EONR) means your organization assumes full legal and administrative responsibility for all aspects of employment, including payroll, benefits, compliance with labour laws, and employee contracts. In this model, you handle all regulatory obligations directly, while maintaining full control over team management and decision-making. Below are the key pros and cons of taking on this role.

Pros of Being Employer On Record

Direct Accountability for Employment Decisions

As the employer on record, you take on direct accountability for managing all aspects of employment, including payroll, benefits, and compliance. While you already have control over hiring, firing, and day-to-day team management in an employer off record model, being the employer on record allows you to personally oversee administrative tasks like compliance and payroll processing, giving you more insight into these areas.

Enhanced Employer Branding

Being the direct legal employer can strengthen the connection between your company and offshore employees, fostering a deeper sense of loyalty and alignment with your brand. This may lead to improved engagement and long-term retention as employees feel a closer attachment to your firm.

Cons of Being Employer On Record

Limited Flexibility in Termination

This closer connection can also create challenges when managing terminations. In the employer on record model, if an employee is let go, they have no alternative options within your company, which can result in a more rigid and difficult termination process. In contrast, with us as the employer off record, we can place terminated employees with other clients, offering a smoother transition for both parties.

High Compliance and Legal Burden

Managing compliance with local labour laws, employee contracts, and other regulatory requirements can become complex, particularly when dealing with offshore markets. As the employer on record, the full responsibility for compliance lies with you, potentially increasing legal risks and operational costs. We can appoint a local director to help manage these compliances, but you will still need to handle all related tasks internally with the assistance of our director.

Higher Operational Costs

Establishing your own offshore entity requires substantial investment in infrastructure, HR systems, and office space. These upfront and ongoing costs add to your operational expenses, making it a less cost-efficient choice compared to the employer off record model, where these costs are managed by us.

Time-Consuming HR and Admin Functions

As the employer on record, all HR functions such as payroll, benefits administration, and compliance management must be handled in-house, which can take away time and resources from your core business activities. In contrast, an employer off record model allows you to focus on strategic tasks while outsourcing these operational responsibilities.

Function Comparison: Employer Off Record (EOR) vs. Employer On Record (EONR)