Employer of Record Service Agreement

EMPLOYER OF RECORD SERVICE AGREEMENT

AGREEMENT OVERVIEW

Agreement Date: [Date]

Parties:

EOR Provider:
Name: [EOR Provider Legal Name]
Address: [EOR Provider Address]
Country of Incorporation: [Country]
(Hereinafter "EOR" or "Provider")

Client:
Name: [Client Company Legal Name]
Address: [Client Address]
Country of Incorporation: [Country]
(Hereinafter "Client" or "Company")

(Each a "Party" and collectively the "Parties")

1. RECITALS

WHEREAS:

A. Client desires to engage workers in countries where Client does not have a legal entity or the infrastructure to employ workers directly;

B. EOR provides employer of record services, acting as the legal employer of workers while Client directs their day-to-day work activities;

C. The Parties wish to establish the terms under which EOR will provide such services to Client.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree as follows:

2. DEFINITIONS

"Assigned Worker" means an individual employed by EOR and assigned to provide services to Client under this Agreement.

"Client Intellectual Property" means all intellectual property owned by Client prior to an Assigned Worker's engagement or developed independently of an Assigned Worker's services.

"Effective Date" means the date first written above.

"Employment Agreement" means the employment contract between EOR and an Assigned Worker.

"Management Fee" means the fee charged by EOR for its services, as set forth in Schedule A.

"Service Order" means a request from Client to engage a specific Assigned Worker, substantially in the form of Schedule B.

"Services" means the employer of record services provided by EOR under this Agreement.

"Territory" means the countries in which EOR will provide Services, as specified in Schedule C.

"Total Worker Cost" means the total cost of an Assigned Worker, including salary, benefits, taxes, and social contributions.

"Work Product" means all work, inventions, materials, and intellectual property created by an Assigned Worker in the course of providing services to Client.

3. EOR SERVICES

3.1 Scope of Services

EOR shall provide the following services for Assigned Workers in the Territory:

Employment Administration:
☐ Serve as the legal employer of record
☐ Execute and maintain Employment Agreements
☐ Onboard and offboard Assigned Workers
☐ Maintain employment records
☐ Issue employment verifications and certificates

Payroll and Compensation:
☐ Process payroll in accordance with local law
☐ Calculate and process salaries, bonuses, and allowances
☐ Withhold and remit income taxes
☐ Provide pay slips/statements to Assigned Workers
☐ Process expense reimbursements

Tax Compliance:
☐ Register as employer with tax authorities
☐ File employer tax returns
☐ Remit employer and employee taxes
☐ Maintain tax records and documentation
☐ Respond to tax authority inquiries

Social Security and Benefits:
☐ Register with social security authorities
☐ Calculate and pay social security contributions
☐ Enroll Assigned Workers in mandatory benefits
☐ Administer mandatory pension contributions
☐ Provide mandatory health insurance (where required)

Compliance:
☐ Ensure compliance with local employment laws
☐ Maintain compliant Employment Agreements
☐ Provide mandatory notices and disclosures
☐ Handle statutory reporting requirements
☐ Monitor legal changes and update practices

3.2 Services NOT Included

EOR does NOT provide:
☐ Immigration or visa services (unless separately agreed)
☐ Work direction or supervision of Assigned Workers
☐ Performance management or discipline decisions
☐ Recruitment or sourcing of candidates
☐ Legal advice to Client
☐ [Other exclusions]

3.3 Territory

Services are available in the countries listed in Schedule C. Expansion to new countries requires written agreement and may involve additional setup fees and lead times.

4. CLIENT RESPONSIBILITIES

4.1 Candidate Selection

Client shall:
☐ Identify and select candidates for employment through EOR
☐ Conduct interviews and make hiring decisions
☐ Determine compensation levels (subject to local minimum requirements)
☐ Verify candidates have the right to work (with EOR support)

4.2 Work Direction

Client shall:
☐ Direct day-to-day work activities of Assigned Workers
☐ Assign tasks, projects, and priorities
☐ Manage performance and provide feedback
☐ Make decisions regarding work quality and methods
☐ Provide necessary training for job duties

4.3 Information and Cooperation

Client shall:
☐ Provide accurate information for Service Orders
☐ Respond promptly to EOR requests for information
☐ Notify EOR of changes affecting Assigned Workers
☐ Communicate with Assigned Workers regarding work matters
☐ Cooperate with EOR on compliance matters

4.4 Compliance Cooperation

Client shall:
☐ Not direct Assigned Workers to violate local law
☐ Respect local working time and leave requirements
☐ Provide information needed for employment law compliance
☐ Notify EOR of any workplace issues or incidents
☐ Cooperate with any governmental inquiries

5. ENGAGEMENT PROCESS

5.1 Service Order

To engage an Assigned Worker, Client shall submit a Service Order including:
☐ Candidate name and contact information
☐ Position title and job description
☐ Proposed start date
☐ Compensation (salary, bonus, benefits)
☐ Working hours and location
☐ Assignment duration (if fixed-term)
☐ Any special requirements

5.2 Feasibility Review

EOR shall review the Service Order and within [5] business days:
☐ Confirm feasibility and quote Total Worker Cost
☐ Identify any issues or requirements
☐ Propose modifications if needed
☐ Provide estimated start date

5.3 Employment Agreement

Upon Client approval:
☐ EOR will prepare Employment Agreement compliant with local law
☐ EOR will present offer to candidate
☐ Client will be informed of acceptance
☐ EOR will onboard Assigned Worker

5.4 Lead Times

6. COMPENSATION AND PAYMENTS

6.1 Fee Structure

Client shall pay EOR:

Management Fee:
☐ Flat fee per Assigned Worker: $[Amount] per month
☐ Percentage of Total Worker Cost: [X]%
☐ As specified in Schedule A

Total Worker Cost includes:
☐ Gross salary
☐ Mandatory employer social contributions
☐ Mandatory benefits
☐ Other employer costs (as itemized)

6.2 Invoicing

☐ EOR will invoice Client: [Monthly / Bi-weekly] in advance
☐ Invoice will include:

• Management Fee
• Total Worker Cost for upcoming period
• Any expense reimbursements
• Any variable costs from prior period
  ☐ Invoice currency: [USD / EUR / Local currency]

6.3 Payment Terms

☐ Payment due within [7] days of invoice date
☐ Payment method: [Wire transfer / ACH]
☐ Late payments subject to: [X]% per month interest
☐ Services may be suspended for payments over [30] days late

6.4 Deposits

☐ Initial deposit: Equivalent to [1] month Total Worker Cost per Assigned Worker
☐ Deposit held for: Payment of final wages, leave cash-out, and termination costs
☐ Deposit refunded: Within [30] days of all Assigned Workers' terminations

6.5 Cost Adjustments

Total Worker Cost may be adjusted for:
☐ Statutory minimum wage increases
☐ Mandatory benefit changes
☐ Tax rate changes
☐ Currency fluctuations (if applicable)
☐ Client will be notified [30] days in advance of changes

7. INTELLECTUAL PROPERTY

7.1 Work Product Ownership

☐ All Work Product created by Assigned Workers belongs to Client
☐ EOR will ensure Employment Agreements assign IP rights to EOR
☐ EOR hereby assigns to Client all rights received in Work Product
☐ EOR will assist in perfecting Client's IP rights

7.2 Pre-Existing IP

☐ Client retains all Client Intellectual Property
☐ EOR retains all EOR intellectual property
☐ Neither Party acquires rights in the other's pre-existing IP

7.3 IP Warranties

EOR warrants that:
☐ Employment Agreements include valid IP assignment provisions
☐ Such provisions comply with local law
☐ EOR will notify Client of jurisdictions with inventor rights issues

8. CONFIDENTIALITY

8.1 Confidential Information

Each Party agrees to maintain in confidence:
☐ The other Party's proprietary business information
☐ Personal data of Assigned Workers
☐ Terms of this Agreement
☐ Financial information

8.2 Permitted Disclosures

Disclosure is permitted:
☐ To employees/contractors with need to know
☐ As required by law or legal process
☐ With the other Party's consent

8.3 Worker Confidentiality

☐ EOR will include confidentiality provisions in Employment Agreements
☐ Client may require additional confidentiality agreements
☐ EOR will cooperate in enforcing confidentiality obligations

9. DATA PROTECTION

9.1 Roles

☐ Client is Controller of Assigned Worker data for Client's business purposes
☐ EOR is Controller of Assigned Worker data for employment purposes
☐ EOR is Processor when processing data solely on Client's behalf
☐ Parties will execute Data Processing Addendum (Schedule D)

9.2 Compliance

Both Parties shall:
☐ Comply with applicable data protection laws (GDPR, etc.)
☐ Implement appropriate security measures
☐ Respond to data subject requests
☐ Notify the other Party of data breaches

9.3 Cross-Border Transfers

☐ Transfers will comply with applicable law
☐ Standard Contractual Clauses apply where required
☐ Transfer Impact Assessments available upon request

10. TERMINATION OF ASSIGNED WORKERS

10.1 Termination Authority

☐ Client may request termination of an Assigned Worker's assignment
☐ EOR will advise on lawful termination process
☐ EOR will execute termination in compliance with local law
☐ Client decisions will be documented in writing

10.2 Termination Process

Upon Client's termination request:
☐ EOR will advise on notice periods and severance requirements
☐ EOR will provide cost estimate for termination
☐ Client will approve termination costs
☐ EOR will process termination per local law

10.3 Termination Costs

Client is responsible for:
☐ Notice period pay (or pay in lieu)
☐ Statutory severance
☐ Accrued vacation/leave cash-out
☐ Any other legally required termination payments
☐ EOR management fees through termination effective date

10.4 Mutual Agreement Terminations

EOR will facilitate mutual separation agreements where:
☐ Requested by Client
☐ Agreed by Assigned Worker
☐ Compliant with local law

10.5 Worker-Initiated Terminations

If Assigned Worker resigns:
☐ EOR will notify Client immediately
☐ EOR will enforce notice period obligations
☐ EOR will process offboarding
☐ Client will pay final costs through last day of work

11. LIABILITY AND INDEMNIFICATION

11.1 EOR Indemnification

EOR shall indemnify Client against claims arising from:
☐ EOR's failure to comply with employment laws
☐ EOR's failure to remit taxes or contributions
☐ EOR's breach of this Agreement
☐ EOR's negligence or willful misconduct

11.2 Client Indemnification

Client shall indemnify EOR against claims arising from:
☐ Client's work directions that violate applicable law
☐ Client's hiring, termination, or compensation decisions
☐ Workplace discrimination or harassment by Client personnel
☐ Client's breach of this Agreement
☐ Claims related to Client products, services, or operations

11.3 Shared Responsibility

For claims involving shared responsibility:
☐ Parties will cooperate in defense
☐ Liability allocated based on fault
☐ Neither Party will settle without the other's consent

11.4 Limitation of Liability

☐ Neither Party liable for indirect, consequential, or punitive damages
☐ EOR's total liability capped at: [12] months of Management Fees
☐ Caps do not apply to: Indemnification, gross negligence, or willful misconduct

12. TERM AND TERMINATION

12.1 Term

☐ Initial term: [12/24/36] months from Effective Date
☐ Auto-renewal for successive [12]-month terms unless terminated

12.2 Termination for Convenience

Either Party may terminate:
☐ With [90] days written notice
☐ Effective at end of a renewal term
☐ Subject to orderly wind-down of Assigned Workers

12.3 Termination for Cause

Either Party may terminate immediately if:
☐ Material breach not cured within [30] days of notice
☐ Other Party becomes insolvent or bankrupt
☐ Other Party violates applicable law

12.4 Effect of Termination

Upon termination:
☐ No new Assigned Workers will be engaged
☐ Existing Assigned Workers will be terminated per local law or transferred
☐ Client will pay all outstanding invoices and termination costs
☐ Deposit will be applied to final costs; balance refunded

12.5 Transition Assistance

EOR will provide reasonable transition assistance:
☐ Cooperate in transfer of Assigned Workers to Client or new provider
☐ Provide employment records and documentation
☐ Duration: Up to [90] days post-termination
☐ Additional fees may apply for extended transition

13. REPRESENTATIONS AND WARRANTIES

13.1 EOR Warranties

EOR represents and warrants that:
☐ EOR has legal authority to employ workers in the Territory
☐ EOR will comply with applicable employment and tax laws
☐ Employment Agreements will be legally compliant
☐ EOR will maintain appropriate insurance coverage

13.2 Client Warranties

Client represents and warrants that:
☐ Client has authority to enter this Agreement
☐ Information provided to EOR will be accurate
☐ Client will comply with applicable laws regarding Assigned Workers
☐ Client will not direct Assigned Workers to violate any law

13.3 No Warranty of Outcomes

EOR does NOT warrant:
☐ Specific tax treatment
☐ Immigration approval
☐ Absence of employment claims
☐ Specific termination costs

14. INSURANCE

14.1 EOR Insurance

EOR shall maintain:
☐ Professional liability insurance: $[Amount]
☐ Cyber liability insurance: $[Amount]
☐ Workers' compensation as required by law
☐ Employer liability insurance: $[Amount]

14.2 Client Insurance

Client shall maintain:
☐ General liability insurance: $[Amount]
☐ Other insurance as appropriate for Client's business

15. DISPUTE RESOLUTION

15.1 Negotiation

Parties shall first attempt to resolve disputes through negotiation:
☐ Written notice of dispute
☐ Meeting between senior representatives within [15] days
☐ Good faith attempt to resolve

15.2 Arbitration

Unresolved disputes shall be submitted to:
☐ Binding arbitration under [ICC / AAA / LCIA] Rules
☐ Seat of arbitration: [City, Country]
☐ Language: [English]
☐ Number of arbitrators: [1/3]

15.3 Governing Law

This Agreement is governed by the laws of [Country/State].

15.4 Injunctive Relief

Either Party may seek injunctive relief in any court to protect confidential information or intellectual property.

16. GENERAL PROVISIONS

16.1 Entire Agreement

This Agreement, including Schedules, constitutes the entire agreement and supersedes prior agreements.

16.2 Amendments

Amendments must be in writing signed by both Parties.

16.3 Severability

Invalid provisions will be modified to be enforceable; if not possible, severed.

16.4 Waiver

No waiver is effective unless in writing.

16.5 Assignment

Neither Party may assign without consent, except to an affiliate or successor.

16.6 Notices

Notices shall be in writing to addresses above or as updated.

16.7 Independent Contractors

EOR and Client are independent contractors; no joint venture or partnership.

16.8 Force Majeure

Neither Party liable for failure due to events beyond reasonable control.

16.9 Counterparts

This Agreement may be executed in counterparts.

17. SIGNATURES

EOR PROVIDER:

[EOR Provider Legal Name]

By: _________________________________________________
Name: _______________________________________________
Title: _______________________________________________
Date: _______________________________________________

CLIENT:

[Client Legal Name]

By: _________________________________________________
Name: _______________________________________________
Title: _______________________________________________
Date: _______________________________________________

SCHEDULE A: FEE SCHEDULE

Management Fees:

One-Time Fees:

Deposits:
☐ Deposit per worker: [1] month Total Worker Cost
☐ Due: Before worker's start date

SCHEDULE B: SERVICE ORDER TEMPLATE

Service Order Number: _______________
Date: _______________
Client Contact: _______________

Assigned Worker Information:
Name: _______________________________________________
Country: ____________________________________________
Position: ___________________________________________
Start Date: _________________________________________
Duration: ☐ Indefinite ☐ Fixed-term until: ____________

Compensation:
Annual Gross Salary: [Currency] [Amount]
Bonus Target: [Amount or N/A]
Other Allowances: ____________________________________

Working Arrangement:
Hours per week: _____________________________________
Work Location: ☐ Remote ☐ Office: ___________________

Benefits:
☐ Standard local benefits
☐ Enhanced benefits (specify): ________________________

Special Requirements:
__________________________________________________

Estimated Total Monthly Cost:

Client Approval: _________________ Date: ___________

EOR Acceptance: _________________ Date: ___________

SCHEDULE C: TERRITORY

EOR is authorized to provide services in the following countries:

Countries may be added by mutual written agreement.

SCHEDULE D: DATA PROCESSING ADDENDUM

[Insert Data Processing Addendum with GDPR-compliant terms including:]
☐ Processing purposes and scope
☐ Data security requirements
☐ Sub-processor provisions
☐ Data subject rights
☐ Breach notification
☐ Audit rights
☐ Data deletion/return
☐ Standard Contractual Clauses (as applicable)

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