An International PEO is introduced in the employment world to ease the global hiring process of businesses trying to expand internationally. International PEO is not a co-employment of international employees but is a service similar to an employer of record service (EOR) to onboard resources without having an entity in a foreign country.  Basically what an International PEO does is to help businesses set up a fully functional and legally thorough international remote team without the need of setting up an entity in the country a company is hiring from.
Let us take a closer look at how an International PEO actually works, what is the difference between an International PEO and other closely related employment models, what are the requirements to collaborate with one of them, the benefits of collaborating with them, and how to build a dream team with the help of them.
What is an International PEO?Â
International PEO is an employment service that helps companies with the compliant hiring of international candidates from anywhere in the globe without setting up a legal entity in that country of the candidate. It saves companies from HR and legal hassles involved in the recruitment and maintenance of international candidates. An International PEO manages complex processes like international payroll, onboarding and offboarding of the candidates, dealing with conflicting local labor laws of the hiring country, employee engagement and employee retention, and many other related operations. The HR tasks can often be finicky especially when a business is dealing with international candidates and employers have to be particularly expert in handling individual HR issues all by themselves.
Employers may find themselves in the middle of nowhere with this humongous responsibility and miss out on stellar candidates. Fortunately enough, there is an employment model (International Professional Employer Organization) at hand whose expertise will not only eradicate this operational conundrum but also make these tasks rudimentary in the global expansion process of a company’s workforce.
This legal employer for a company’s global workforce along with all the compliance and administrative heavy lifting, comes in handy to manage the employee benefits, contracts, and taxes at a very cost-effective budget. The International PEO employment service is however frequently confused with other interconnected employment services such as global PEO, domestic PEO, and global employer of record (EOR).
While each of these services is responsible for hiring and managing an organization’s workforce, there is a thin line between these three-letter employment acronyms and the terms and conditions for the individual models vary greatly from one another.
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International PEO vs. PEO
| International PEO | PEO |
| International PEO has its roots in a PEO and acts as the sole legal employer for your business. | Traditional PEOs are the domestic version of the model. Traditional PEOs do not act as the sole legal employer for your business. |
| An International PEO model is associated with hiring international candidates or handling their employment contracts. | Traditional PEO is a co-employment model that takes care of the outsourced human resource services for the local workforce. |
| An International PEO caters to businesses aspiring to build and manage an international remote team. | A PEO is solely responsible for managing the payroll, health benefits, onboarding, and other administrative tasks for local employees. |
| With an International PEO, there is no need to have a legal entity in another country as it acts as the legal employer for your team and is responsible for all compliance matters. | Collaborating with a PEO does not change the employment dynamics of your local teams. You are still the legal employer for all your hires with shared compliance risks and responsibilities with the PEO. |
International PEO vs. Employer of Record (EOR)
| International PEO | Employer of Record (EOR) |
| International PEO offers similar solutions as an employer of record (EOR) to businesses expanding internationally. | Employer of record (EOR) has similar terms and conditions on the working models as an International PEO. |
| International PEOs are focused on hiring and onboarding international employees while managing payroll and benefits for the hired employees. | Employer of record (EOR) provides you with some added assistance like IT and infrastructure support, customized employee documentation, etc. |
| Employer of record (EOR) is a more popular and commonly used terminology. | The terms International PEO and employer of record (EOR) are synonyms in their literal meaning and are often used interchangeably. |
Know more about PEO vs EOR vs International PEO
What Do International PEO Companies Do?
International PEO companies help businesses explore new opportunities in emerging global markets by assisting them with a full spectrum of services. International PEO companies support businesses in expanding their workforce without any geographical constraints by abiding by all foreign laws and regulations.
They manage the entire legal payroll on a company’s behalf which involves international taxes, timely salary for every employee, and miscellaneous financial liabilities for international employees. Even a slight negligence of the payroll system can lead a business to reputational damage and in worst-case scenarios to potential compliance risk but International PEO companies cover it all for it.
However, the core essence of partnering with International PEO companies is that they become the heart and soul of human resources of a business along with saving time and money in the process. With their vast network and strong hold on the international markets, International PEO companies work way smarter and faster than any other employment model.
An International PEO has access to a diverse talent pool that is excellent at their jobs yet available at a very economical salary range. International PEO companies also save businesses from unnecessary legal fines due to non-compliance, on-time payment failures, or workers’ Read More
