Employer of Record (EOR) is essential for On Demand Staffing

3 min read
May 31, 2024 8:09:14 AM

The healthcare landscape undergoes constant evolution, with shifting patient needs and legislative changes influencing care delivery models. One significant trend is the rise in state regulations restricting the use of independent contractors (1099) in favor of W-2 employees. California's Assembly Bill 5 (AB5) serves as a prime example, creating a unique opportunity for staffing agencies that act as an Employer of Record (EOR). In this transformative environment, clinicians remain in high demand while seeking greater flexibility and incremental income opportunities. But it goes deeper, it’s critical for healthcare providers for their on-demand labor partners to also be the employer of record.

What is an Employer of Record (EOR)?

An EOR is a third-party company that assumes the legal responsibilities of an employer. This includes:

  • Payroll processing and tax compliance
  • Benefits administration
  • Workers' compensation
  • HR management
  • Regulatory compliance

Value for Hospitals

In the face of staffing shortages and evolving regulations, hospitals are discovering a strategic advantage in partnering with Employer of Record (EOR) staffing agencies.  Here are some big reasons why.

  • Rapid, Compliant Staffing: EOR-backed staffing agencies can quickly deploy qualified clinicians, relieving pressure on HR and ensuring adherence to new regulations.
  • Precision Sourcing: EOR models benefit hospitals by allowing staffing agencies to utilize precision sourcing to efficiently fulfill specific talent needs, ensuring qualified professionals are readily available to meet patient care demands.
  • Cost Savings: Hospitals can save between 25-45% on administrative and HR costs, like credentialing and screening, by outsourcing these functions to an EOR.
  • Reduced Liability: EORs handle the complexities of employment regulations, minimizing the risk of misclassification lawsuits and associated penalties.
  • Streamlined Operations: An EOR provides a centralized platform for managing W-2 contract clinicians, simplifying scheduling, tracking hours, and ensuring a smooth workflow.

Value for Clinicians: The Side Gig Advantage

For clinicians seeking autonomy, flexibility, and the freedom to focus on patient care, partnering with an Employer of Record (EOR) staffing agency presents a compelling career path.  Key benefits include:

  • Unparalleled Flexibility: Clinicians can pick up shifts at different hospitals on their own schedule, creating a powerful way to supplement their income on their terms.
  • Administrative Ease: Clinicians can focus on providing patient care, as the EOR handles payroll, taxes, and HR-related matters.
  • Compliance with Employment Laws: EORs ensure that all aspects of employment adhere to federal, state, and local regulations. This covers everything from minimum wage and overtime rules to anti-discrimination and safety standards. For healthcare professionals who often work long, demanding hours, having this legal protection allows them to focus on patient care rather than bureaucratic concerns.
  • Professional Liability Insurance: Many EORs offer comprehensive liability insurance coverage, safeguarding clinicians from potential legal disputes or malpractice claims. This is a crucial safety net and licensure layer of protection, particularly for those working in high-risk specialties.

Blockchain: The Next Level for EORs

By partnering with an Employer of Record (EOR) staffing agency that leverages blockchain technology, hospitals gain access to a workforce with continuously authenticated credentials, fostering trust and transparency throughout the hiring process.

  • Immutable Records: Employment contracts, pay history, and certifications can be securely stored on a blockchain, creating a tamper-proof record for both hospitals and clinicians.
  • Transparency: Both parties have real-time access to verifiable data, reducing administrative burdens and potential disputes.
  • Smart Contracts: Automated execution of payments, benefits enrollment, and other processes streamline operations and ensure prompt compensation for clinicians.

Choosing the Right EOR Partners

Clinicians and hospitals should consider these factors when selecting EOR-backed staffing agencies:

  • Industry Experience: Look for staffing firms with demonstrated expertise in healthcare.
  • Track Record: Investigate the staffing agency's history of successful placements and satisfied clients.
  • Technology: Choose an agency with both a robust conventional platform AND integration of blockchain features.
  • Legislative Expertise: Choose an EOR with a deep understanding of current employment regulations and the ability to adapt to future changes.
  • Patient Care: Above any and above all, look for staffing firms who have improving patient care at the center of their purpose.

The Future of Healthcare Staffing

EOR is almost a universal requirement for clinical. EORs are poised to transform healthcare staffing, and blockchain integration makes the model even more secure and efficient. By offering compliant staffing solutions, agencies help hospitals and clinicians navigate this complex landscape while fostering a more stable and equitable workforce.