Maintaining Employee Control With An EOR: What Employers Need To Know

Do you lose control of your employees when you work with an Employer of Record? The short answer is no. You retain full control over day-to-day management, performance reviews, promotions, and terminations. The EOR handles legal employment responsibilities like payroll, tax compliance, and benefits administration, but how your team works and performs remains entirely in your hands.

What It Means To Be The Legal Employer

There's an important distinction between being the "legal employer" and the "functional employer." When you partner with an EOR, the EOR becomes the legal employer on paper. They own the employment contracts, handle tax withholding, enroll employees in statutory benefits, and ensure compliance with local labor laws. You, however, remain the functional employer: the one who sets expectations, shapes culture, and drives business outcomes.

Think of it like a property management company. They handle the legal paperwork and maintenance, but you still own the house and decide who lives there. The EOR keeps everything above board so you can focus on what actually matters: running your business.

Who Really Manages The Day-To-Day Tasks

If the EOR is the legal employer, who tells your employees what to do? You do. Always.

Oversight and guidance stays entirely with you. You assign projects, set deadlines, provide feedback, and manage workloads. Your managers run the standups, sprint planning sessions, and one-on-ones. The EOR never intervenes in work direction and has no visibility into or interest in your operational decisions.

Workflows and tools are also your call. Whether your team communicates on Slack or Microsoft Teams, manages projects in Jira or Asana, or uses any other platform in your stack, that's entirely up to you. The EOR doesn't dictate your tech environment or internal processes.

Conflict resolution follows the same principle. If there's an interpersonal issue or performance problem on your team, you handle it. The EOR only steps in when there's a legal or compliance dimension, for example, if a harassment claim requires formal documentation under local law. Their involvement in those cases is actually a benefit, protecting you from procedural missteps that could expose you to liability.

Managing Performance And Promotions Under An EOR

One of the most persistent myths about EORs is that they limit your ability to manage and reward employees. In reality, performance management is entirely yours to design and execute.

You define KPIs, OKRs, and performance benchmarks. You run review cycles, conduct 360 feedback, and set rating systems. If you want your sales rep in Germany to hit €50K in quarterly revenue, you set that goal. The EOR simply ensures the commission structure complies with German law.

When it comes to promotions and raises, the process is equally straightforward. You make the decision, notify the EOR of the new title and salary, and they generate a compliant contract amendment with payroll updated in the next cycle. Platforms like Borderless AI automate this with AI-powered contract generation, so promotions don't get delayed by paperwork.

How Terminations And Compliance Are Handled

Terminations are often where employers feel most anxious about control, and it's a fair concern. Here's how it actually works: you decide when and why to terminate, and the EOR ensures the process follows local labor law to protect you from legal risk.

Every country has different rules around notice periods, severance calculations, and required documentation. In France, for example, you might need to provide two months' notice and calculate severance based on tenure. The EOR handles those calculations and guides you through each required step, preventing costly mistakes like skipping mandatory consultations with works councils or miscalculating a final payout.

Once the decision is made, the EOR also manages offboarding logistics including final paycheck processing, benefits cessation, and termination documentation, so you can focus on transitioning work and supporting your remaining team.

When You Might Actually Lose Some Control

To be transparent: there are scenarios where you'll face real constraints. But these come from local law, not the EOR.

Some countries have non-negotiable requirements. France enforces a 35-hour work week, Brazil mandates a 13th-month salary, and Germany requires works council approval for certain decisions. The EOR can't override these rules, and neither can you. These are legal realities of operating internationally, not limitations imposed by your EOR provider.

On the benefits side, EORs typically offer standardized packages to ensure compliance and scalability. Highly customized perks may have limits, though providers like Borderless AI offer flexibility in benefits administration and can work with you on creative solutions. For extremely bespoke arrangements, setting up your own entity may be the better path.

In rare cases involving disputes, whistleblower claims, or litigation, the EOR's legal team may take the lead to protect both parties. You'll still be consulted, and their expertise in these moments is a feature, not a drawback.

Empower Your Global Team Without Sacrificing Control

Working with an EOR doesn't mean giving up control. It means redirecting your energy toward leading your team instead of managing legal complexity. You handle hiring decisions, performance, culture, and strategy. The EOR handles the compliance infrastructure that makes it all legally sound.

Ready to scale your global team without losing control? Borderless AI combines AI-powered automation, zero-deposit payroll, and 24/7 North America-based support to give you the fastest, most transparent EOR experience in the industry. Learn more at hireborderless.com.

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