Contractor of Record (CoR)
What is a Contractor of Record?
A Contractor of Record (CoR) is a third-party entity that legally engages independent contractors on behalf of a company. The CoR becomes the official contracting party for the worker, handling contracts, compliance, payments, and local labor requirements, while the company retains day-to-day operational control over the contractor’s work. In simple terms:- You manage the work.
- The contractor does the work.
- The CoR handles the legal and administrative complexity.
How Contractor of Record Works
- You select the contractor you want to work with.
- The CoR signs a compliant contractor agreement with the individual under local law.
- The contractor performs work for your company as agreed.
- The CoR manages invoicing, payments, and compliance, including required documentation and local filings where applicable.
- You receive one consolidated invoice from the CoR.
When Should You Use a Contractor of Record?
A Contractor of Record is a good fit when:You’re hiring internationally
Local contractor laws differ widely across countries. A CoR helps ensure contracts and payment structures comply with local regulations without requiring you to set up a local entity.You want to reduce misclassification risk
Misclassifying a contractor can lead to fines, back taxes, penalties, and legal exposure. A CoR helps structure engagements correctly and maintain proper documentation.You need to move fast
Setting up entities, finding local counsel, or building internal compliance processes can take months. A CoR enables compliant hiring in days.You’re scaling contractors
Managing contracts, payments, and compliance across many contractors quickly becomes operationally heavy. A CoR centralizes and standardizes the process.You’re testing a new market or role
If you’re unsure whether a role will become full-time or permanent, a CoR allows you to start with lower commitment and overhead.Contractor of Record vs. Employer of Record
| Feature | Contractor of Record (CoR) | Employer of Record (EOR) |
|---|---|---|
| Worker type | Independent contractor | Full-time employee |
| Legal employer | CoR | EOR |
| Employment benefits | No | Yes |
| Payroll & taxes | Contractor responsible (with CoR support) | EOR responsible |
Key Benefits of Using a Contractor of Record
- Compliance-first contracts aligned with local laws
- Reduced legal and tax exposure
- Simplified payments across currencies and countries
- Faster international hiring without entity setup
- Clear audit trail and documentation
What a Contractor of Record Typically Handles
- Contractor agreements and amendments
- Local compliance requirements
- Contractor onboarding documentation
- Invoicing and payment processing
- Currency conversion and payouts
- Contract termination support
FAQs
Is a Contractor of Record the same as a staffing agency?
No. A staffing agency sources and manages talent. A CoR does not recruit or manage the worker — it only serves as the legal and administrative contracting entity.Do contractors become employees of the CoR?
No. Contractors remain independent contractors, not employees. The CoR structures the relationship to comply with local contractor laws.Who controls the contractor’s work?
You do. The CoR has no involvement in task assignment, performance management, or day-to-day operations.Can I convert a contractor to full-time later?
Yes. Many companies start with a CoR and later transition contractors to an Employer of Record (EOR) or direct employment when the role becomes long-term.Is using a CoR legally safe?
A CoR can significantly reduce risk, but proper use, role definition, and engagement structure are critical. At the end of the day, the CoR provider (Bolto) is the one taking on misclassification risk, so Bolto will work with you to ensure you are meeting standard classification thresholds.Is Contractor of Record Right for You?
A CoR is best if you want:- Speed and flexibility
- Global reach without entities
- Reduced legal complexity
- A bridge between contractors and full-time hires
This document is for informational purposes only and does not constitute legal or tax advice.