Striking a balance between cost management and high-quality employees is critical for long-term success and ensuring the integrity of patient care. However, with so many healthcare systems' over reliance on contingent labor, which often comes at a premium price, this is often easier said than done. Innovative solutions are imperative for today's healthcare leaders.
That's why an employer of record is so important. Here we'll go over what EORs are, what they do, and how they function in a healthcare setting.
What is an Employer of Record?
An EOR acts as a third-party that provides employees to organizations in need of workers. However, they are different from staffing companies in that the EOR is the legal employer of each worker, meaning they take on all legal responsibilities such as payroll, benefits, labor law compliance, and more.
In a healthcare setting, this is a huge cost saver for HR and administrative teams in how it frees up internal resources that can be redirected toward other core initiatives.
How Does an EOR Function in Healthcare?
EORs play a variety of roles in a healthcare setting:
Employment and Payroll Management
Since the EOR assumes responsibility as the legal employer, they handle all types of administrative paperwork including payroll, benefits, contracts, and more. Meanwhile, the organization has full control over the employees' hours, tasks, and daily assignments.
Legal Compliance Experts
With so many strict labor laws, licensing requirements, and more that come with the highly regulated healthcare industry, legal compliance is critical not only to ensure patient safety, but to save time and money from potential legal penalties. Much like all healthcare administrative teams, EORs are extremely knowledgeable on these compliance obligations and keep up to date on incoming legislation to ensure 100% compliance at all times. This includes managing worker's compensation, unemployment insurance, and local wage laws.
Tax Tasks
Calculating and withholding taxes from each employee's checks, filing tax reports, etc. all fall on the EOR as the legal employer.
Ultimately, EORs handle every aspect of employment. Think of it as loaning out employees whenever an organization is in need of extra hands.
The Role of an EOR in Containing Costs
EORs are proven to reduce overhead costs, minimize legal expenses, provide scalable pricing models, and improve operational efficiency. Here are just a few examples:
Streamlining Administrative Processes
Outsourced payroll and administrative tasks helps free up internal resources and time for current HR/admin teams. This allows them to focus on other organizational imperatives, ultimately saving time and money. Additionally, reliable payroll processing ensures a smoother employee experience, which results in higher job satisfaction and retention.
Mitigating Legal and Compliance Risks
EORs stay updated on labor laws and regulations, ensuring all processes adhere to legal requirements, which ultimately eliminates penalties and liabilities. If a payroll situation does happen, the fault falls on the EOR, shielding the organization from needless legal fees.
Enhancing Workforce Flexibility and Scalability
Through EORs, healthcare facilities can quickly scale up or down depending on their unique needs without the burden of managing complex HR processes internally. As we all learned from the pandemic, staffing needs can fluctuate on a dime based on patient volume, seasonal changes, and more — so being able to scale quickly without putting in extra work is critical toward maintaining integrity of care.
HWL Works to Improve Your Employee Experiences
With a suite of innovative healthcare workforce solutions, HWL is an EOR that you can rely on to find customized cost savings measures without sacrificing patient outcomes. Through unmatched expertise, compliance assurance, cutting-edge technology, flexible pricing models, dedicated customer support, and more, you can count on us to handle all manners of employment for your workforce.
Learn more about our EOR solutions, locums management, MSP, VMS, and more.