Agent of RecordAOR
Also known as: AOR provider
An Agent of Record (AOR) is a third party that manages the engagement, contracting, and payment of independent contractors on a company’s behalf. It handles the paperwork and payments that come with using non-employee talent — vetting classification, issuing compliant contracts, processing invoices, and paying contractors — so the client can work with freelancers and consultants across markets without carrying the legal and administrative burden directly.
The AOR exists to solve a specific risk: misclassification. When a company treats a worker as an independent contractor who, under local law, should be an employee, it can face back-taxes, penalties, and benefit claims. An AOR reviews each engagement against the relevant rules, structures the contract accordingly, and stands between the client and the contractor as the accountable intermediary. Because it never becomes the worker’s employer, an AOR is distinct from an Employer of Record, which does — the AOR is for genuine contractors, the EOR for full-time hires.
For companies building offshore teams in India, an AOR is useful when a Global Capability Centre or its parent wants to engage Indian consultants, freelancers, or short-term specialists without either incorporating an entity or putting them on formal payroll. It keeps contractor engagements compliant with Indian contract and tax law, including tax deducted at source on professional fees, while preserving the flexibility that contractor work is meant to provide.
Frequently asked questions
What is an Agent of Record (AOR)?
An Agent of Record (AOR) is a third party that engages, contracts, and pays independent contractors on a company’s behalf, taking on the compliance risk of classifying and paying non-employees correctly across markets.
What is the difference between an AOR and an EOR?
An AOR manages independent contractors and never becomes their employer, while an Employer of Record (EOR) legally employs full-time workers on the client’s behalf. In short: AOR is for contractors, EOR is for employees.
Why would a company use an AOR?
A company uses an AOR to engage contractors across markets without carrying the misclassification risk, contracting overhead, and payment complexity itself — the AOR vets classification and stands as the accountable intermediary.
Does an AOR help with worker misclassification?
Yes. A core reason to use an AOR is to reduce misclassification risk — it reviews each engagement against local law, structures contracts correctly, and takes on accountability for treating genuine contractors as contractors.