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Employer of Record (EOR) in New Zealand

Key Takeaways

  • This article provides an in-depth guide to New Zealand Employers of Record (EORs) — a special form of HR outsourcing solution.
  • It discusses how EORs operate in New Zealand, their benefits and potential drawbacks.
  • The article also evaluates the top five leading New Zealand EORs – Horizons, NZPEO, Globalization Partners (G-P), Remote, and Deel.

Are you a global company interested in hiring employees in New Zealand? If so, read about how a New Zealand Employer of Record can help you do so, quickly and cost-effectively. 

What is a New Zealand Employer of Record?

A New Zealand Employer of Record (EOR) is a company that provides comprehensive HR solutions for international businesses operating in New Zealand. These organizations are co-employers, which means they share employer responsibilities with the company they’re working with.

When a company contracts with an EOR, the EOR assumes employer tasks and liabilities for legal purposes. The business continues to manage the day-to-day operations, but the EOR handles functions like payroll processing, tax filing, employee benefits, workers’ compensation, and compliance with employment laws and regulations.

In New Zealand, EORs have become increasingly popular as businesses look to streamline their operations and focus more on their core competencies. New Zealand’s friendly business environment, robust economy, and straightforward legal system make it an attractive destination for businesses.

A New Zealand EOR offers a similar service to a New Zealand Professional Employer Organization (New Zealand PEO). You can read more about that model in our guide to NZ PEOs. 

How does a New Zealand Employer of Record work?

When a company partners with a New Zealand EOR, the EOR effectively becomes the legal employer. The EOR takes on a range of responsibilities including:

  • Managing payroll and employment taxes (in New Zealand this includes workers’ compensation contributions known as ACC levies, and pension contributions known as ‘Kiwisaver‘)
  • Administering employee benefits such as leave and supplemental insurance
  • Ensuring compliance with New Zealand’s employment laws and regulations.
  • Overseeing employee safety and risk management.
  • Managing employee relations and handling issues such as disciplinary actions and terminations.

Although the EOR assumes these responsibilities, the client company retains control over business operations and management decisions. This means the company continues to direct the employees’ day-to-day activities and maintain their unique company culture.

In addition to these core services, some New Zealand EORs also provide additional support, such as HR consulting and New Zealand work permit sponsorship. 

What are the benefits of a New Zealand Employer of Record?

New Zealand EORs offer numerous benefits for businesses:

  1. Simplified HR Management: Companies can outsource complex HR tasks, freeing up their time to focus on core operations.
  2. Compliance Assurance: EORs ensure businesses comply with New Zealand employment laws and regulations, reducing legal risks.
  3. Access to Better Benefits: EORs can offer high-quality, cost-effective benefits packages to attract and retain employees.
  4. Streamlined Expansion: Companies looking to expand in or into New Zealand can do so without setting up a legal entity. This saves companies a large amount on the cost of expansion and hiring in New Zealand. 
  5. Risk Management: EORs help businesses manage employee-related risks and handle workers’ compensation claims.

What are the disadvantages of a New Zealand Employer of Record?

While there are many benefits to using a New Zealand EOR, it’s important to consider potential disadvantages:

  1. Reduced Control: While companies retain operational control, they give up some control over HR management.
  2. Dependency: Companies become reliant on EORs for critical functions, which could pose issues if the EOR service is disrupted.
  3. Costs: While EORs can save businesses money in some areas, their services also come at a price. Whether or not an EOR solution is right for a company hiring in New Zealand will depend on the size of that company, the industry that they work in, and the types of employee that they intend to hire. 

Top 5 Leading New Zealand Employers of Record

  1. Horizons (New Horizons Global Partners): Known for its vast industry experience and strong relationships with local authorities, Horizons offers seamless HR services and has a New Zealand-based entity/office, making it a top choice for many businesses. Read more in our 2023 Horizons Review.
  2. NZPEO: This PEO and EOR is preferred by some customers for its specialized focus on the New Zealand market. NZPEO’s deep understanding of local employment laws and regulations, it ensures client companies maintain compliance.
  3. Globalization Partners (G-P): With its global reach and impressive tech platform, Globalization Partners (G-P) simplifies international business. They handle all aspects of HR, payroll, and compliance, making them an attractive option for global companies. Read more in our 2023 breakdown of G-P’s EOR offerings. 
  4. Remote: Remote offers a robust global infrastructure. They are appreciated for their transparent pricing and employment law expertise, making global employment easier for many businesses. Learn more in our 2023 Remote EOR review. 
  5. Deel: Deel stands out for its streamlined online platform and transparent approach. It has a strong presence in the Asia-Pacific region, making it a good fit for companies interested in New Zealand hiring. For more information on how Deel can help you with your New Zealand hiring, read our 2023 Deel review. 

Hire in New Zealand with a Global Employer of Record solution

EORs play a crucial role in modern businesses by enabling companies to streamline their operations and maintain compliance with employment laws. While there are potential drawbacks, the benefits often outweigh these, particularly for companies looking to expand in or into New Zealand. When selecting an EOR, businesses should consider factors such as cost, services offered, and industry reputation.

FAQs

Yes, an EOR can hire employees on behalf of your company. However, the final decision on who to hire remains with your business.

No, while EORs are particularly useful for international companies, they also provide value for domestic companies by managing complex HR tasks, ensuring compliance, and offering access to competitive benefits packages.

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