| Feature | Employer of Record (EOR) | Professional Employer Organization (PEO) |
|---|---|---|
| Definition | A company that takes on the responsibility of being the legal employer of a worker, including handling payroll, benefits, and compliance. | A company that provides HR and administrative services to businesses, including payroll, benefits, compliance, and employee relations. |
| Legal responsibility | Assumes all legal responsibility and liability as the employer of record. | Shares some legal responsibility and liability with the client company. |
| Ownership of employees | Owns the employment relationship with the worker. | Shares the employment relationship with the client company. |
| Hiring/firing | Typically does not have involvement in hiring/firing decisions. | May have some involvement in hiring/firing decisions. |
| Cost | Typically more expensive than PEO services. | Typically less expensive than EOR services. |
| Focus | Primarily focused on compliance and legal responsibilities. | Provides broader HR and administrative services. |
| Customization | Limited customization of services. | Can provide more customized services. |
It’s important to note that there may be variations in the specific services offered by EORs and PEOs. The level of involvement in employment decisions may vary based on the agreement between the service provider and the client company.