also called PEO
A firm that co-employs a company's workers to handle payroll, benefits and HR, usually within one country.
A PEO is a firm that shares the employer role for your staff, running payroll, benefits and HR paperwork so you do not have to build that yourself. The key difference from an Employer of Record is reach: a PEO usually needs your company to already have a legal entity in that country, while an EOR can hire for you where you have none. Get them mixed up and you plan to hire somewhere you legally cannot yet.
Your small company wants to hire someone in France. You approach a PEO expecting them to make it happen, then learn they can only co-employ once you have set up a French entity, which is the very thing you were trying to avoid.
It's often confused with an EOR, but a PEO typically needs the company to already have a local legal entity.
The difference is the whole point, so here is each one in a line.
These are the arrangements for paying someone who works in a different country from their company.
An Employer of Record legally employs the worker in that country on the company's behalf; a Professional Employer Organization co-employs within one country; and a contractor of record does the same for a self-employed contractor.
Payroll is the ordinary wage-and-tax system, invoicing is how a contractor bills instead, shadow payroll is a reporting-only second payroll to satisfy a second country's rules, and global mobility is the corporate team that manages all of it.
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