What You Need to Know About Data Protection with an EoR

Hiring Globally? Here’s What You Need to Know About Data Protection with an EoR

19 March 2025 // 3 Min Read

Hiring talent across borders has never been easier, thanks to Employers of Record (EoRs). These entities take on the formal responsibilities of employment—payroll, benefits, compliance—while the actual work is managed by another company (yours!). It’s a fantastic solution for businesses wanting to expand without the hassle of setting up a local entity in a foreign country.

But what about data protection? If you’re a UK company using an EoR based abroad, you need to think carefully about data compliance—particularly under the UK GDPR. Let’s break it down into digestible bits.

Who’s Responsible for What?

Both your company and the EoR have data protection obligations, but the specifics depend on your roles:

Data Controller: The one deciding why and how personal data is processed.
Data Processor: The one processing data on behalf of the controller.

It’s not always straightforward. Sometimes, both the company and the EoR act as separate (independent) controllers, making their own decisions about data processing. Other times, they are joint controllers, sharing responsibility. In some cases, the EoR is just a processor handling data on the company’s behalf.

Understanding these roles is crucial because it determines compliance responsibilities—and who takes the fall if something goes wrong!

The Paperwork: Agreements You Might Need

Depending on your arrangement, different agreements may be necessary:

Independent Data Controllers: Not legally required to have a data-sharing agreement, but it’s a good idea to have one anyway for clarity.
Joint Controllers: Must follow Article 26 of the UK GDPR and establish a formal agreement on responsibilities.
Controller-Processor Relationship: If your company is the controller and the EoR is the processor, you’ll need a Data Processing Agreement (DPA) in line with Article 28 of the UK GDPR.

Think of these agreements like prenuptial contracts—they set expectations upfront and prevent disputes down the line.

Crossing Borders: Handling International Data Transfers

Here’s where things get trickier. Since EoRs often operate in different countries, personal data must travel across borders. That means additional compliance checks.

Consider these two scenarios:

Your company shares employee data with the EoR (since they are the formal employer).
Your company shares customer data with employees hired via the EoR.

If the EoR is based in a country with an adequacy decision from the UK government (like the EU or Japan), things are simple—data flows freely. If not, additional safeguards like the International Data Transfer Agreement (IDTA) or a Transfer Risk Assessment (TRA) may be required.

For the U.S., the UK-U.S. Data Bridge could be a valid option, avoiding extra paperwork.

Conclusion

Using an EoR can be a game-changer for businesses expanding internationally, but don’t let data protection be an afterthought. From defining roles to ensuring legal compliance for data transfers, tackling these issues early will save you headaches (and potential fines) down the road.

Got questions? Talk to a data protection expert before signing that EoR contract—your future self will thank you!