As businesses continue to evolve in the digital age, the structure of employment has also shifted. Many companies rely on independent contractors for their flexibility and cost-effectiveness. However, transitioning contractors to employees through an Employer of Record (EOR) like can provide significant benefits for both the company and the contractor. This article provides a comprehensive comparison between being an EOR employee and an independent contractor in the Philippines, illustrating why this transition is advantageous for both parties.

Understanding EOR and Independent Contractors

An Employer of Record (EOR) is a third-party organization that handles employment and compliance, allowing businesses to hire employees without setting up a legal entity or using an outsourcer.

A full-service EOR like partners with your business, employing your staff on your behalf, and handling all HR functions, including onboarding, payroll, benefits, tax, and compliance. It also provides HR support from a dedicated HR manager and can optionally manage IT functions like device supply, logistics, customs, device management, security, support, and device recovery.

EOR Employee (Outstaffer)
Independent Contractor
Compliance with Local Laws
We ensure full legal, HR and tax compliance
Higher risk of non-compliance with potential fines up to PHP 500,000
Payroll and HR Management handles payroll and benefits payments and administration
No Payroll or payment administration
Legal Risk
No legal risks related to employment
High risk of misclassification; potential fines up to PHP 500,000 and imprisonment
Long-term Commitment
Stability with long-term employment condivacts
No long-term commitments, lacks job security
Legal Compliance Risk (AMLA)
Managed by, reducing compliance risks with AMLA
Higher risk for foreign national remittance compliance; penalties include fines up to PHP 2,000,000 and imprisonment for 7-14 years
Job Security
Greater job security and employment benefits
No job security, dependent on condivact renewals
Employee Benefits
Access to health insurance, retirement plans, paid leave
No access to employee benefits, must self-fund (costs for health insurance can be PHP 20,000-50,000 annually)
Statutory Entitlements ensures remittance of statutory entitlements to SSS, PhilHealth, and Pag-IBIG
No statutory entitlements, must manage own statutory entitlements
Income Taxes managed by, reducing complexity and ensuring compliance
Must handle own tax filings, risk of fines up to PHP 50,000 for non-filing or incorrect filing
Dispute Resolution
Employment disputes managed by
Must handle own disputes, potential legal costs and risks
Secuirty and IP
We ensure our customer retains full ownership of their data and IP
High security risk to data and IP ownership
Health Maintenance Organization (HMO)
Access to HMO for medical and health services (costs covered by
No HMO coverage, must handle own medical expenses (HMO costs can be PHP 20,000-80,000 annually)
Equipment and Device Management
Outstaffer supplies equipment and manages devices to your employee
Your contractor must purchase and manage their own equipment and devices (costs can vary widely, typically PHP 30,000-150,000)
Paid Leave Accrual and Management
Accrual and management of paid leave handled by
No paid leave, must account for unpaid time off
HR Support
Access to HR support for various employment issues
No HR support, must handle all HR-related issues independently

For Companies: The Business Benefits of Using

1. Compliance and Risk Management

Transitioning contractors to EOR employees through ensures compliance with local laws and reduces legal risks. handles all employment-related legalities, mitigating the risk of fines and penalties associated with misclassification and non-compliance.

2. Streamlined Payroll and HR Management takes on the responsibility of payroll and benefits administration, freeing up your company's resources to focus on core business activities. This reduces administrative burdens and ensures that employees receive their entitlements promptly and accurately.

3. Enhanced Job Security and Productivity

Providing job security and comprehensive benefits through can lead to a more motivated and productive workforce. Employees with stable employment and access to benefits are likely to be more engaged and loyal to the company.

4. Global Payroll Solutions offers a comprehensive global payroll solution, ensuring your team is paid compliantly no matter where they are located. This service simplifies the complexities of international payroll, making it easier for your business to expand globally without worrying about compliance issues.

5. HR Support provides dedicated HR support from experienced HR managers. This includes handling employee relations, conflict resolution, and ensuring compliance with local labor laws, which helps maintain a positive and productive work environment.

6. Equipping Employees with Devices offers Device as a Service (DaaS), which supplies employees with the necessary equipment for their roles. This service includes the supply, configuration, logistics, device management, security, support, and device recovery, ensuring employees have the tools they need to perform effectively.

For Contractors: The Personal Benefits of Becoming an EOR Employee with

1. Financial Stability and Benefits

As an EOR employee through, you enjoy financial stability with regular payroll managed by You gain access to essential benefits like health insurance, retirement plans, paid leave and 13th month pay, which are not available to independent contractors who must self-fund these benefits.

2. HR Support

EOR employees receive in-country HR support for conflict resolution and career guidance, enhancing your professional growth and job satisfaction.

3. Access to Loans and Housing

With a stable employment status, EOR employees find it easier to secure loans and rental properties. Financial institutions and landlords view them as lower-risk clients compared to independent contractors with variable incomes.

4. Outstaffer Equipment or Device as a Service offers Device as a Service (DaaS), providing employees with the right tools for their roles. This service includes supply, configuration, logistics, device management, security, and 24/7 end-user support. Contractors transitioning to EOR employees can benefit from having their equipment needs managed efficiently, reducing the burden of purchasing and maintaining their devices.

5. Legal Protection

EOR employees are safeguarded against misclassification risks and legal complications. ensures full compliance with local and international labor laws, significantly reducing the likelihood of fines, penalties, and legal disputes that independent contractors might face. As is the EOR, employees are guaranteed their wages and benefits. This legal protection provides peace of mind and allows employees to focus on their professional responsibilities without the worry of potential issues.

For Both: Data and IP Protection ensures robust data protection and compliance with global standards such as GDPR, SOC2, ISO 27001, ISO 27017, ISO 27018, and PCI-DSS. This guarantees that both companies and employees' data are secure. Additionally, offers strong IP protection, ensuring that intellectual property rights are safeguarded through a transparent two-stage process, from the employee to, and then to the company.

Making the Transition

For companies considering moving their contractors to an EOR model with, this transition can lead to a more stable and motivated workforce. Employees benefit from security, comprehensive benefits, and support systems, which can improve job satisfaction and performance.

Contractors contemplating this change should weigh the pros and cons. While the flexibility and autonomy of contracting can be appealing, the stability, benefits, and support provided by EOR employment through can significantly enhance one's quality of life and financial security.


The choice between being an EOR employee and an independent contractor in the Philippines involves careful consideration of various factors. Transitioning to an EOR model with offers significant benefits for both companies and contractors, providing stability, comprehensive benefits, and reduced legal risks. This shift can foster a more motivated, secure, and productive workforce, ultimately benefiting both the business and the individual.

As the employment landscape continues to evolve, understanding these dynamics is crucial for making informed decisions that align with both business goals and personal career aspirations. Transitioning to an EOR model with is a strategic move that can enhance business operations and improve the quality of life for employees.

Are you ready to look at using an EOR model for your contractors? Schedule your obligation-free platform demo today to see how easy it can be transition your contractors to an EOR model.

Jun 12, 2024

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