Your early-stage company may not be able to afford an HR department, benefits, and many other pieces of today’s employment puzzle, but you can hire them all. Instead of a simple payroll company, choose an employer of record firm. Legally, they are the employer of your employees, whom you essentially rent. You, the client, hire your people, set the pay scale, and determine the employment agreement. The employer of record handles benefits — including 401(k) and other retirement, insurance, state and federal deposits — and employee taxes and reporting. They also provide you with an employee handbook, personnel counselors, as well as coaching for you, the business owner, on how to work with your employees.
If you as the owner want to be paid regularly, you too can become a company employee and enjoy the benefits that big companies offer. The employer of record company has a huge employee count that allows them to negotiate benefit plans at far more favorable rates than you could get on your own.
Having used the service, I found that it cost less than paying a bookkeeper to do the payroll tasks, and that the employees were less stressed and more focused on their work after the employer of record was hired.
Marilyn Holt, CMC