Global EOR solutions offer fast and flexible international hiring, but when it comes to terminating employees, that convenience often disappears. Many companies face unexpected legal, financial, and reputational fallout because courts may treat them—not the EOR—as the actual employer. This exposes them to unfair dismissal claims and compliance liabilities related to leave, overtime, and benefits.
In complex labor markets like France, Italy, Japan, Brazil, and Mexico, termination costs can reach up to 100% of an employee’s annual salary, including severance, legal fees, and settlements. Additional risks stem from EOR procedural lapses such as mismanaging working time, non-compete clauses, annual leave, or sick leave reporting. These oversights can accumulate into significant backdated claims, often hidden within EOR invoices.
To mitigate risk, HR leaders should thoroughly review EOR contracts, understand local employment laws, and seek local legal guidance during terminations. They should also budget for potential payouts, favor mutual separations, and maintain detailed employee records.
Strategically managing these risks transforms the EOR model from a potential liability into a scalable global employment solution.
Originally Published by Crowe UK on 27 Oct 2025
In complex labor markets like France, Italy, Japan, Brazil, and Mexico, termination costs can reach up to 100% of an employee’s annual salary, including severance, legal fees, and settlements. Additional risks stem from EOR procedural lapses such as mismanaging working time, non-compete clauses, annual leave, or sick leave reporting. These oversights can accumulate into significant backdated claims, often hidden within EOR invoices.
To mitigate risk, HR leaders should thoroughly review EOR contracts, understand local employment laws, and seek local legal guidance during terminations. They should also budget for potential payouts, favor mutual separations, and maintain detailed employee records.
Strategically managing these risks transforms the EOR model from a potential liability into a scalable global employment solution.
Originally Published by Crowe UK on 27 Oct 2025
