HR and legal liabilities don’t wait for a convenient time to show up. If your business engages contractors, contingent workers, or remote employees across multiple states, you’re likely exposed to a range of compliance risks — whether you know it or not.

Here are the top risks that Employer of Record (EOR) services solve:

⚠️ 𝗪𝗼𝗿𝗸𝗲𝗿 𝗺𝗶𝘀𝗰𝗹𝗮𝘀𝘀𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻: Misclassifying an employee as an independent contractor can trigger IRS penalties, back taxes, and lawsuits. A good EOR assesses risk per jurisdiction and assumes the liability — including indemnification clauses.

⚠️ 𝗪𝗮𝗴𝗲 𝗮𝗻𝗱 𝗵𝗼𝘂𝗿 𝘃𝗶𝗼𝗹𝗮𝘁𝗶𝗼𝗻𝘀: Overtime rules vary by state. So do break requirements and final paycheck timelines. EORs monitor these variations in real time, adjusting processes to stay compliant.

⚠️ 𝗟𝗮𝗰𝗸 𝗼𝗳 𝗜-𝟵 𝗮𝗻𝗱 𝗘-𝗩𝗲𝗿𝗶𝗳𝘆 𝗿𝗲𝗮𝗱𝗶𝗻𝗲𝘀𝘀: If your audit trail for employment verification is incomplete, you risk federal penalties. EORs centralize documentation and automate retention schedules to avoid fines and delays.

⚠️ 𝗢𝘂𝘁𝗱𝗮𝘁𝗲𝗱 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲 𝗵𝗮𝗻𝗱𝗯𝗼𝗼𝗸𝘀 𝗮𝗻𝗱 𝘁𝗿𝗮𝗶𝗻𝗶𝗻𝗴 𝗴𝗮𝗽𝘀: Sexual harassment training and policy disclosures are legally required in some states. EORs deploy jurisdiction-specific onboarding and training workflows to meet statutory requirements.

⚠️ 𝗦𝘁𝗮𝘁𝗲-𝘀𝗽𝗲𝗰𝗶𝗳𝗶𝗰 𝗽𝗮𝗶𝗱 𝗹𝗲𝗮𝘃𝗲 𝗺𝗮𝗻𝗱𝗮𝘁𝗲𝘀: Sick leave laws differ in accrual methods, carryover policies, and covered reasons. A good EOR doesn’t just offer leave — they model accrual logic to fit state regulations.