We've been working with Remote.com as an Employer of Record (EoR) for several years to expand our international teams. While the collaboration was successful for a long time, we have observed a significant decline in the quality of service in recent months, leading to damages amounting to tens of thousands of euros for our company and employees. This has led us to question whether EoR providers, in general, pose a problem or if our negative experiences are not representative.
Issues in Collaboration
Problems we have encountered include:
Most critically, Remote.com has made changes regarding the ability to terminate employees. Initially, Remote.com always listed operational reasons as a reason for termination in all regions known to us. Today, these reasons for termination have disappeared from their website. When we attempted to terminate employees for operational reasons earlier this year, Remote.com denied our Increased "accounting errors" at our expense: For example, we were charged twice for legally mandated allowances - once as a monthly pro-rata payment and again in full at the time of disbursement. These "errors" often amounted to 10-20% of the annual employment costs for the affected employees.
Tickets related to these issues were ignored until we stopped paying the affected invoices until the conflict was resolved and the invoice corrected.
Changes in customer service: Until early/mid-2023, we had competent, native-language speaking representatives who had a comprehensive overview of all our matters. In recent months, all representatives have been English-speaking, which has complicated processes significantly. They rarely had an overview of the context, making it difficult to resolve issues like accounting problems related to specific employment contracts.
Reports of Similar Negative Experiences with Remote.com Irregularities in billing (https://realreviews.io/reviews/remote.com#9674) Concealment of legal risks (https://realreviews.io/reviews/remote.com#2663) Issues with employment contracts (https://www.g2.com/products/remote/reviews/remote-review-8645550) Overcharging and lack of transparency (https://www.g2.com/products/remote/reviews/remote-review-9167328) Misc Issues including offboarding (https://www.trustpilot.com/reviews/665960fd2f71e3d178665a77) Various negative experiences (https://www.reddit.com/r/remotework/comments/mq4oqx/has_anyone_tried_remotecom/)
General Question regarding the EoR Business Model
Our experiences raise the question of how Remote.com (and other EoRs) handle situations where one of their clients files for insolvency. Consider a client with ~5 employees with an average monthly salary of €7.5k per year through Remote.com. Remote charges around €600 in fees per employee per month, in our example, amounting to ~€36,000 (5x€600x12) in revenue per year. If the client files for insolvency, Remote.com, as an external service provider, is a rather subordinate creditor. However, Remote still incurs monthly costs of €37,500 until these employees can be laid off. Assuming that this costs an average of ~3 months' salary or 3 months' severance pay, Remote would be left with over €100k in losses.
There might be a flaw in my reasoning, but I currently cannot find it. I have read that Remote can drastically reduce salaries in such cases (https://www.reddit.com/r/cscareerquestionsEU/comments/1adr8ps/working_remote_for_an_eor_what_happens_if_the/), but looking at our former employees' contracts, I cannot confirm this possibility (and I cannot imagine this practice would hold up in most EU countries' labor courts).