As a consulting firm dedicated to helping property management companies, brokerages, and investors scale their businesses, we understand the importance of having a strong international remote workforce. But, here's the thing most aren't considering: using an official employer of record (EOR) is crucial to avoid any potential disasters. Are you paying your remote team directly or using a recruiting firm that may not be permanently established in the country you are leveraging talent from?

If so, you could land in some hot water with local employment laws and regulations. In the property management industry, we've seen first-hand what happens when laws aren't followed. Take for example a big property management company that got slapped with a $2.75 million fine in 2018 for not following California labor laws. They classified their workers as independent contractors instead of employees, which led to a bunch of violations including failure to pay overtime and provide breaks.

This is a cautionary tale for all businesses in the property management industry and it's a reminder of the importance of compliance with local laws. By using an EOR, businesses can make sure they're following all the necessary regulations and protecting themselves from any legal issues.

But it's not just compliance that's an issue, not using an EOR can also limit the benefits and support offered to international employees. An EOR can provide access to things like health insurance, retirement plans, and other benefits that may not be available to employees working in other countries. Without those benefits, businesses may have a harder time retaining top talent and may see higher employee turnover rates. This could hinder their ability to scale and reach their business goals.

And let's not forget, not using an EOR could also increase the workload of a company's HR team. Handling payroll, taxes, and other HR-related tasks can be a huge time suck and divert resources away from more important business matters. By partnering with an EOR, these tasks can be outsourced, freeing up the HR team to focus on more pressing issues and supporting the overall growth of the business.

In short, not using an official employer of record when contracting international remote talent could mean noncompliance with local laws, limited employee benefits, and increased HR workload. That's why we recommend partnering with an EOR to ensure compliance, support employee retention, and streamline HR-related tasks.

Don't be the next example of the consequences of not using an EOR, talk to our team to determine if your internal recruiting practices or talent provider is above board. At RevUp Recruiting, we only partner with permanently established employers of record to make sure our clients stay competitive and compliant.

Author: Maya Madden