Global hiring glossary
Plain-language definitions of employer of record, contractor of record, payroll and compliance terms used across our reviews.
A
- Agent of record (AOR)
- An agent of record is a provider that manages independent-contractor compliance and administration on behalf of a client, while the client usually keeps the direct contractual relationship with each contractor.
C
- Contractor of record (COR)
- A contractor of record is a company that engages independent contractors on behalf of a client, acting as the contracting party and handling contracts, classification checks, invoicing and payments.
E
- Employer of record (EOR)
- An employer of record is a company that legally employs a worker on behalf of another business in a country where that business has no entity, and handles payroll, tax withholding, social contributions and statutory benefits.
G
- Global payroll
- Global payroll is the process of calculating, filing and paying wages for employees of a company’s own legal entities across several countries, in line with each country’s tax and social security rules.
O
- Owned entity
- An owned entity is a legal entity that a provider itself owns in a country and uses to employ workers directly, as opposed to relying on a third-party local partner.
P
- Permanent establishment (PE)
- A permanent establishment is a fixed place of business or a dependent agent in a country that can make a foreign company liable for corporate income tax there, a risk that can arise when employees or contractors work abroad.
- Professional employer organization (PEO)
- A professional employer organization is a company that shares employer responsibilities with a client under a co-employment model, typically requiring the client to have its own local legal entity.
W
- Worker misclassification
- Worker misclassification happens when a person who should be treated as an employee under local law is engaged as an independent contractor, which can lead to back taxes, penalties and claims for employee benefits.