EOR vs staffing agency: who the worker belongs to
Teams sometimes ask a staffing agency to โjust employ our person abroad.โ That request mixes two products. An Employer of Record is built so the clientโs selected worker is employed locally. A staffing or temp agency is built to supply labour that the agency has recruited, often under labour-supply licensing rules.
The structural difference
| Question | Employer of Record | Staffing / temp agency |
|---|---|---|
| Who selected the worker? | The client, in the usual EOR case. | The agency, or a joint process the agency controls. |
| Whose headcount is the person? | The clientโs team for day-to-day work; the EOR is the legal employer. | Typically the agencyโs labour pool assigned to a client site or project. |
| What is the commercial object? | Employment administration for a named role. | Supply of labour or a filled assignment. |
| Licensing overlay | Local employer capability and any EOR-specific rules. | Labour-supply, agency, or temp-work licences in many countries. |
| When the contract ends | The employment with the EOR must end or transfer. | The assignment ends; the worker often remains employed by the agency. |
Some providers sell both products. Read the statement of work. If the provider recruited the person and can reassign them, you are buying staffing. If you brought the person and will keep directing the same role, you are buying EORโprovided the local model is available for that role.
Why the mix-up creates legal noise
Countries that regulate agency work, labour dispatch, or employee leasing may restrict who can supply labour and for how long. An arrangement labelled โEORโ that operates as labour supply can fall into the wrong licensing bucket. The reverse also happens: a staffing contract is used for a full-time, client-selected engineer, which then fails classification or co-employment tests.
- Write down who sourced the candidate.
- Write down who will direct the method of work after day one.
- Ask which local licence the provider relies on for that country and role.
How this sits next to PEO and payroll
A US PEO assumes the client already has a US employing entity. Payroll outsourcing also assumes the clientโs company is the employer. Staffing supplies labour. EOR is the local employer of the clientโs worker where the client has no entity. Farlinko operates EOR and payroll outsourcing. It does not market a global staffing desk as a substitute for those two products.
If the question is contractor versus employee, use EOR vs independent contractor. If the question is incorporate or not, use EOR vs subsidiary. The operating steps are in how an Employer of Record works.