Are EORs “sponsoring” third-country nationals for their clients in the EU?
Employers of Record (EOR) often inquire about the possibility of “sponsoring” third-country nationals for their clients within EU countries. While EORs are established in the countries where services are offered, this practice raises questions about legality and the employment relationships involved.
In most EU countries, the concept of an EOR is not recognized by national laws, except for the Netherlands with its “payrolling companies.” Obtaining work authorizations for employees hired by EORs can be challenging in various positions across different sectors. Single permits are typically issued to third-country nationals for specific employers and workplaces.
Determining the optimal solution may involve considering registration as a temporary work agency, but this entails additional legal obligations. Ultimately, the employment of record should not be seen as a means to “sponsor” third-country nationals for clients in the EU, as quadruple employment relationships are not feasible
Digital Nomads and Global Mobility
As workforces become increasingly diverse employers are taking steps to improve the experience of employees working in other countries. Global mobility initiatives reflect the changing attitudes towards remote work and a more flexible workforce. The boundaries between employee categories have blurred, with language shifting from traditional terms like “home and host countries” to “remote workers” or “digital nomads.”
Managing mixed workforces with different types of workers presents challenges in tax and payroll reporting. Strategies such as utilizing employers of record to access talent quickly require careful management to ensure cultural alignment. Legislative requirements, taxation considerations, support networks, and governance and oversight play essential roles in facilitating smooth global mobility. Initiatives to enhance the employee experience include providing points of contact, counseling services, and implementing self-service options. The rise of remote work may increase audits, but advancements like earned wage access are anticipated to have a positive impact on global mobility.
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