Explanation:
The EOR handles all formal employment tasks such as payroll, tax withholding, benefits administration, and compliance with local employment laws. This allows companies to employ individuals in locations where they do not have a legal entity.
Practical Example of an Employer of Record:
A U.S. company wanting to hire an employee in Germany, without establishing a legal presence there, can use an EOR service to employ and pay the German employee in compliance with local laws and regulations.
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