Portable employer of record
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A portable employer of record (PER) acts as a service that offers an engagement channel to connect with internally recruited independent contractors within a business. A PER can be described as a traditional office - with the support of departments such as a contracts department, finance group, a human resources department, a payrolling team, benefits managers, collections agents, etc. — that supports an independent contractor as he or she moves from assignment to assignment, or client to client.
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[edit] The purpose of PER's for businesses
A PER's aim is to allow businesses to engage self-sourced professional contact talent independent contractors directly and safely with their organizations. Since PER's are not burdened with cost of recruiting or brokering contractors, they are generally very cost effective because an organization can find the talent on their own. Directly engaging consultants with a PER also provides for an efficient engagement process rather than channeling the same contractors through staffing intermediaries. PER’s also enable organizations to build their own talent pools of contract workers that they can draw from as needed and reengage individuals already familiar with their organization. The services supply chains become more efficient by connecting directly with the contingent worker whom businesses commonly use, rather than going through a many-linked chain of consulting companies that serve as sub-contractors to a prime vendor (in essence dis intermediating the service supply chain). By shortening recruitment cycles, PER's also enable rapid talent deployment because of contingent worker recruitment strategies that minimize time-to-productivity. Through PER's, businesses can build ongoing relationships with independent contractors which more closely resembles full-time personnel engagement and is therefore more appropriate to be handled by HR for resource planning. Using PER's also eliminates staffing intermediaries and helps mitigate the risk of engaging unknown and potentially unwanted personnel. A corporate commitment to direct contractor engagement promotes enterprise-wide consistency of processes, which in turn leads to much improved visibility into services spend.
[edit] The purpose of PER's for individual consultants
A major goal or benefit of a PER to an individual is that it helps he or she maintaining a single employer from client to client. Also, PER's can provide many benefits, such as life insurance and retirement plans, that are rarely, if ever, given to individuals due to the nature of their career as an independent consultant. Specifically individuals that use PER's can lower tax payments for the simple reason that they will only pay Unemployment and Social Security once a year, rather than twice or more each year (which occurs every time independent contractors start with a new employer). The individual can also lower these tax payments by reaching their maximum cap off more quickly, due to the fact that they are seen as being employed by one employer (the PER). Independent contractors may have the opportunity to gain consistent benefits, like health insurance, by remaining with one employer (the PER), rather than by themselves. Finally it is easier for the independent contractor to secure mortgages and other loans because the independent contractors will be more credible for loans and mortgages by showing one long-term employer.
