Over the past two decades, businesses hiring across borders have increasingly turned to third-party intermediaries to handle the legal and administrative complexity of employing people in other countries. Four categories of service now dominate this market: Employer of Record (EOR), Professional Employer Organization (PEO), Global Payroll, and Contractor of Record (COR). The problem is that all four terms get used interchangeably, by vendors, advisors, and sometimes regulators, despite describing arrangements with meaningfully different legal structures, use cases, and risk profiles. This paper proposes a formal taxonomy to distinguish the four. Drawing on regulatory definitions, the International Labour Organization’s (ILO) framework for employment relationships, academic literature on platform work and worker classification, and over a decade of direct observation in the global employment solutions market, the taxonomy is built around four dimensions: (1) legal employer or engagement status, (2) entity requirement, (3) jurisdictional portability, and (4) co-employment or shared-liability structure. A practitioner decision framework is also offered. This is a conceptual paper. Testing the taxonomy empirically across jurisdictions is beyond the scope of this work and is an explicit priority for future research.
Robbin Schuchmann (2026) studied this question.