Being a producer is one of the most demanding jobs in the entertainment industry. Casting talent, setting up production insurance, organizing 1099 payroll…it’s a lot to manage. Plus, you’ve got a serious timeline to stick to. And then when you have to handle tax documents, send out payments, and maintain legal compliance, when do you have time to just…breathe?
Have you considered using an Employer of Record to do all that work for you?
An Employer of Record is a great option for producers who need someone to manage and maintain documents for taxes, send out payments, find talent, and perform other administrative tasks. But what exactly is an EOR, and why does it matter to your production?
In this article, we’ll dive into the role and responsibilities of an EOR, how it can make your business operations more streamlined, and why it could be a crucial element of your business moving forward.
If you’re a producer looking for an extra hand, this is what you’ve been waiting for.
Table of Contents
What is an Employer of Record?
An Employer of Record, or EOR, handles a company’s administrative, legal, and financial responsibilities related to staff employment.
The EOR comes on board to take on the employer’s responsibilities so that the company can focus on its core competencies. The EOR manages payroll, employee benefits, compliance with local labor laws, taxes, entertainment insurance, and other human resources functions.
An EOR is especially great for producers trying to cast and hire talent for projects.
An EOR helps hire talent for those who don’t have a physical entity or are trying to establish one. You can find talent quickly and hire them from anywhere. On paper, the EOR is the legal employer for talent, not you directly. If you were hiring talent without a legal employer, that would be, well…illegal.
For example, LÜK acts as an Employer of Records for productions so you can cast talent across multiple agencies while still adhering to all state and local labor laws. LÜK also takes on the responsibility of managing contractor payroll, correctly classifying independent contractors and talent for tax purposes, and sending out all tax documents before tax season.
Basically, LÜK assumes responsibility for all the financial and legal procedures associated with contractor payroll, workers comp, and tax documentation on your behalf.
Employer of Record vs PEO vs Staffing Agency
Employer of Record
The Employer of Record’s main mission is to take on the role of employer and manage everything that human resources would take care of. This option is great for those who are looking for those looking for:
- Legal protection
- To always comply with labor laws and regulation
- Relieve administrative burdens
- Streamline human resources processes
A Professional Employer Organization, or PEO for short, functions as a co-employment agreement with a company or client. A PEO works with the client company in an arrangement where the PEO becomes the employer of record for tax purposes through filing payroll under its Employer Identification Number.
To use a PEO, you’ll need a physical and legal entity. This option is best for smaller companies with full-time employees, so as a producer looking for something that will help manage talent, this might not be for you.
The PEO is responsible for human resources tasks like:
- Medical leave
- Drug testing
- Tax filing
PEOs are great for those wanting to provide employee benefits and resources. However, PEO offers less legal protection and growth opportunities than an EOR. If you decide to use a PEO, you are responsible for all compliance with legal and local labor laws. PEOs only offer compliance for benefits and payroll, not labor.
A staffing agency is an organization that helps companies find and recruit temporary or permanent staff. While fulfilling the hiring process, they do not assume legal employer responsibilities. These agencies could be beneficial for businesses urgently needing to fill roles or needing specific skills.
This is perfect for finding highly skilled talent in a short amount of time. As a producer, you need to find the best talent for your commercial, film, fashion show, or photoshoot.
With LÜK, we provide you with our own personal booking specialist to help you find talent for your next project. You can hold virtual and in-person casting calls, make talent decks and call sheets, and have the booking specialist confirm casting and handle documents on your behalf so you can have more time being a creative genius.
Global Employer of Record Meaning
A global Employer of Record is an EOR that offers service to multiple countries and territories. It allows companies to work and hire others across international borders without needing a separate location or entity and violating country or local state laws.
Employer of Record Roles
An Employer of Record can wear many hats outside, serving as a local base for companies that don’t have one. Here are some of the many roles an EOR can fulfill on your behalf.
The Employer of Record streamlines onboarding by preparing all necessary documents and contracts to meet law and labor regulations. The EOR is also responsible for benefits administration, helping new hires with enrollment in health insurance, retirement plans, and other company benefits.
A great example of this is talking to their new hires about their benefit packages or how to start their 401k. The EOR may also issue any certificates and training for the role of the new hire as well, to make sure they are ready to start working.
Payroll & Taxes
The EOR is also responsible for setting up payments for contractors and new hires.
The EOR oversees consistent and timely employee payments per the agreed pay schedule. Additionally, they calculate and withhold necessary taxes from employee earnings, such as federal and state income taxes, social security, and more.
Furthermore, any tax documents such as W-2s and 1099s are to be sent by the EOR to the employees and contractors.
So if you used LÜK as your EOR, the platform will:
- Pay your contractors in compliance with local regulations.
- Handle contractor payroll tax documentation and reporting—our EIN is included on tax forms.
- Are liable for and mitigate the risk of late time penalties.
- Offer a reliable workers’ compensation policy.
- Provide a centralized platform that works at scale.
And more importantly, it means you don’t have to…
- Stress about payment regulations.
- Track payroll tax documentation and paperwork.
- Spend all your time managing contractor payroll (kiss those endless invoices goodbye!)
- Pay for unexpected EOR-related legal fees.
Compensation & Benefits
The EOR will establish competitive pay structures, considering market rates, company budget, and individual employee experience and skills. They do this to confirm that employees are compensated accurately for their work.
Regarding benefits, the EOR oversees the company’s or client’s benefit packages. They choose the best packages closest to the company’s values or goals. These packages may include:
- Health insurance
- Dental insurance
- Vision insurance
- Retirement plans
The EOR must inform any new hires and enroll them in any benefits package. The EOR will also take care of changes to the package should any employee get married, start a family, or have any life-changing events happen in the future.
Labor Law Compliance
EORs stay current on all relevant local, state, and federal labor laws and regulations to ensure that the company’s policies and practices align with these laws.
From employee contracts and work hours to minimum wage regulations and overtime pay, the EOR confirms that all aspects of employment adhere to legal standards. Moreover, they handle issues related to workplace safety, discrimination, and harassment, enforcing policies that promote a safe and fair work environment.
The last thing you want is to have your production shut down, be sued by an employee or contractor, or pay out of pocket for any hefty penalties and fines. As an EOR, LÜK mitigates all the risk and liability for the producers.
Have an upcoming project in California and have no idea what the AB5 law is? Need help with worker’s compensation? Having trouble classifying your crew, talent, and employees? LÜK does it all.
We ensure that your production stays on track–so you don’t have to.
Terminations & Unemployment
During terminations, the EOR takes responsibility for preparing the necessary termination paperwork for final pay so that it is correctly calculated and delivered on time.
They also proactively communicate with the terminated employee regarding their rights and benefits, such as severance, continuation of health benefits, and how to access retirement funds.
Post-termination, when dealing with unemployment, the EOR handles all interactions with the unemployment office. This includes verifying unemployment claims, providing information about the former employee’s earnings and reason for separation, responding to office inquiries, and managing potential hearings.
Employer of Record Benefits
Here are some of the many benefits that come with using an Employer of Record.
The EOR is responsible for being fully informed about and in compliance with all relevant local and international labor laws. They manage all legal and regulatory aspects of employment and ensure that companies comply with local labor laws, taxation, and other regulations, thus mitigating any legal risks.
EORs remove the time-consuming tasks associated with hiring and onboarding new employees. They handle all employment paperwork, including contracts, tax forms, and other necessary documentation–all while adhering to local legal and regulatory laws.
Using a global EOR means companies don’t need to establish another entity in another location or country. Having a global EOR, allows companies and clients to hire talent and employees from other states and countries without violating any laws.
What sets a global EOR from a regular EOR is:
- Handling all legal and regulatory requirements for immigration
- Helps businesses achieve global expansion
- Hire teams through global markets
Employing a global EOR can also help companies and clients reach new customers and create additional revenue streams.
Avoid Misclassifying Workers
The EOR accurately determines the classification of workers depending on the nature of their work, whether as full-time employees, part-time employees, temporary workers, or independent contractors, which varies. They manage potential changes to employment status, track hours worked, and ensure overtime is paid when applicable to prevent non-compliance issues.
And no one does it better than LÜK!
Our payroll software will accurately classify independent contractors and employees so you can avoid being fined by the IRS. Once everyone’s been classified, we’ll send 1099 documents to contractors to file for tax season.
No more endless mounds of paper and legwork. Just LÜK and ~vibes~.
An Employer of Record can help maintain healthy customer relationships by conducting surveys, interviews, organizing meetings, etc, to listen to concerns and make the employees feel valued.
Furthermore, EOR can help companies hire employees while trying to establish their own physical entity for the future.
Employer of Record Risks
No Employer of Record? That can be risky. Here’s why:
- Compliance Risks: Failure to comply with local, state, or national labor and employment laws, your business can face serious legal and financial consequences. These can include penalties, fines, and potential damage to your brand’s reputation.
- Liability Risks: Any mistakes in handling payroll, benefits administration, or improper documentation can result in financial liabilities and potential legal action.
- Payroll Mistakes: Payroll administration is a complicated process with a lot of room for error. Without an EOR, organizations risk making mistakes that can result in financial penalties and disgruntled employees.
- Scaling Challenges: An EOR helps ease growth transitions, especially for expanding companies. With it, businesses can navigate unfamiliar labor laws, tax codes, and other hurdles that could ruin any global expansion efforts.
Meet Your New Employer of Record
When you have a production to run, the last thing you need is a court summons, lawsuit, extra fees, and penalties, or to potentially have your production shut down.
You’re a producer, not an HR manager or lawyer. It’s okay to ask for help.
An Employer or Record will oversee all the paperwork, payroll, onboarding, and more so you can focus on production.
And LÜK would love to do this for you! LÜK acts as an EOR for all of our clients, assuming responsibility for all financial and legal procedures associated with payroll, workers comp, and taxes.
But, that’s not all. The platform also streamlines the talent casting & booking process for you by connecting producers with the best talent from multiple agencies.
Just select your desired talent for a virtual or in-person casting, choose the date and time, and your dedicated booking assistant will confirm the talent, manage bookings, and streamline onboarding.
Let LÜK take care of everything–that’s what we do!