What is an Agent of Record (AOR) and why does it matter? 2025 Definition
Today’s world has seen a massive boom in the number of freelancers as well as the freelance economy. But with freelancers being popular across the globe, making sure you effectively manage them across different countries due to compliance, payment and regulatory matters can be quite a challenge as well. This is where an Agent of Record (AOR) comes in and completely changes the game for how companies manage their freelance workforce.
What Does an AOR Do?
An AOR helps facilitate the hiring as well as the supervision of the freelancers seeking employment. This allows companies to completely focus on the core of their business while the AOR manages the other facets of it.
Here’s how they help:
Compliance Screening: Ensuring freelancers are properly classified and aligned with local laws.
Contracts: Every place has a different set of rules pertaining to business, and they make sure that there are legally compliant contracts drafted for every nation.
Payments: In a world that has several currencies, working with remote freelancers can be quite complicated. An AOR ensures currency differences don’t get in the way of freelancers being paid on time.
Risk Mitigation: Protecting businesses from fines, legal complications, or lawsuits related to tax and compliance issues.
Why should you consider an AOR for your business?
Time Saving: Streamlines everything from hiring freelancers to handling administrative task.
Making sure the time to hire is short and that there are as few errors as possible.
For Better Overall Business Efficiency: When hiring a new employee or when an employee resigns, all the onboarding and administrative chores such as filling documents, doing background checks and general verification will not be your headache since AOR ‘s handle everything relieving you of the hassle and managing the entire operation for you and more importantly taking the burden off the chances of making mistakes.
For Global reach: They help you employ people from any parts of the world without having the complications of the laws governing the locality.
More Satisfied Freelancers: Quick payments and transparency in procedures make your business an attractive option for top freelancers.
The risks of not using an AOR
Without an Agent of Record, businesses face significant risks:
- Misclassification: Incorrectly classifying workers can lead to fines and back taxes.
- Compliance Gaps: Ignoring local labor laws can damage your reputation and finances.
- Operational Inefficiencies: Managing multiple freelancers across regions without a centralized system is time-consuming and prone to errors.
For instance, in 2023 Uber agreed to pay an $8.4 million settlement in a class-action lawsuit with California drivers who claimed they were misclassified as independent contractors rather than employees.
AOR vs. EOR: What’s the difference?
While both AORs and Employers of Record (EORs) manage compliance and administrative tasks, their roles differ:
- AOR: Focuses on freelancers, ensuring they are engaged and paid compliantly.
- EOR: Acts as the legal employer for full-time employees, managing HR tasks like benefits and payroll.
How Abillio can help
At Abillio, we understand the intricacies of global freelance management and the challenges businesses face when working with a global talent pool. That’s why we’ve built a Contractor Management System designed to simplify the entire process. As your Agent of Record, we take on liability and help mitigate misclassification risks, ensuring compliance every step of the way.
With self-billing and bulk-payment solutions, we handle compliance and cross-border complexities, so you can focus on growing your business.
Ready to rethink your freelance management strategy? Visit our website to learn more about Abillio’s AOR solutions and how we can help your business thrive globally.
