Glossary · PEO basics
Employer of Record (EOR)
A third-party that legally employs workers on behalf of a client, typically used to hire in jurisdictions where the client has no entity.
An Employer of Record (EOR) is the sole legal employer of the worker. Unlike a PEO, which co-employs alongside a client that already has its own entity in the worker's jurisdiction, an EOR allows a company to hire in a state or country where it has no legal presence.
EORs and PEOs are sometimes confused but are structurally different. A PEO requires the client to maintain its own entity and registrations; an EOR removes that requirement. Many growing employers use both — a PEO domestically and an EOR for international hires.
Related terms
- PEO (Professional Employer Organization)A PEO is a firm that co-employs a client's workforce to deliver payroll, benefits, HR, and compliance services under a shared-employment arrangement.
- Co-employmentA contractual arrangement in which two entities — typically a PEO and its client — share legal and operational responsibilities for the same workforce.
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