Employer of record reduces classification risk
Matt Redler, co-founder and CEO of Panther, on building a modern employer of record
The real issue is not paperwork, it is ownership of the employment relationship. When a company manages someone like an employee but the contract says contractor, the company may not clearly control tax withholding, benefits obligations, or who actually owns the work product they create. That is why Panther centered the product on employer of record, where the local employer relationship is explicit and the legal chain around payroll, benefits, and assignment of work is cleaner.
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In practice, misclassification usually means the worker looks internal, they have a manager, fixed hours, and ongoing duties, but the contract treats them like an outside vendor. That mismatch can trigger back taxes, penalties, and disputes over whether the contract terms, including IP assignment, will hold up when tested.
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This is the core split between EOR and contractor tools. An EOR hires the person through a local legal entity and runs payroll, tax remittance, and benefits as an employer. Contractor products are lighter weight and cheaper, but often stop at contract templates, onboarding, and payout rails, leaving classification risk with the customer.
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The market kept moving toward bundled global workforce platforms because companies rarely want separate systems for employees in one country and contractors in another. Deel started in contractor payments and expanded into EOR and global payroll, while Panther argued that the higher value layer was reducing the legal ambiguity around full time international hires.
Going forward, the winners in global payroll will be the platforms that make proper employment almost as easy as contractor onboarding. As EOR, payroll, and HR data converge into one system, the product edge shifts from simple money movement to giving companies a clean legal and operational record for every worker in every country.