Understanding Job Title Adjustments in an Employer of Record (EOR) Setup

Why Does Horizons Adjust Job Titles?

When using an Employer of Record (EOR) service like Horizons, employees are legally employed by the EOR rather than the client company. As a result, certain job titles may need to be adjusted to align with local labor laws, mitigate risk, and ensure compliance with employment regulations. One key area where adjustments are necessary is for high-level executive positions, including C-suite roles (e.g., CEO, CFO, CTO) and Vice President titles.

Why We Cannot Accommodate C-Suite Job Titles

There are several important reasons why Horizons does not accommodate C-suite job titles:

1. Increased Risk of Permanent Establishment (PE) & Co-Employment Claims

Accepting high-level executive roles under an EOR arrangement increases the risk of Permanent Establishment (PE) and co-employment claims. Authorities may view executives as key decision-makers for the client company, which could trigger tax and compliance obligations for the client in the host country. This exposure places both Horizons and the client at legal and financial risk.

2. Termination Challenges

Executive roles typically do not involve direct managerial oversight or operational deliverables in the same way as other employees. This can make it more difficult to justify termination based on performance or organizational restructuring. As a result, removing a high-level executive may lead to additional legal complexities and potential disputes.

3. Corporate Financial and Legal Risks

In many countries, C-suite executives and Vice Presidents have the authority to act on behalf of the employing entity. If an individual holding such a title is legally employed by Horizons, they may inadvertently assume decision-making responsibilities on behalf of Horizons rather than the client. This creates significant corporate financial risks and potential liabilities for Horizons.

4. Employee Liability Risks

Employees holding C-suite titles may be exposed to unintended legal responsibilities. Since Horizons is the legal employer, a C-suite title could mean the employee is personally liable for company actions, financial decisions, or regulatory compliance. To protect employees from this risk, we adjust job titles accordingly.

How Are Job Titles Adjusted?

When onboarding employees under an EOR arrangement, Horizons works with clients to assign job titles that accurately reflect the employee’s role while mitigating compliance risks. Titles are adjusted to ensure they align with local employment laws and do not imply executive-level decision-making authority for the employing entity.

Examples of Adjusted Titles:

"Chief Technology Officer" (CTO) → "Senior Technology Manager"
"Vice President of Sales" → "Sales Director"
"Chief Operating Officer" (COO) → "Operations Manager"

These adjustments ensure that employees can perform their duties without exposing themselves, the client, or Horizons to unnecessary legal or financial risk.

Conclusion

Horizons prioritizes compliance and risk mitigation when onboarding employees through an EOR arrangement. Adjusting job titles is a necessary step to protect all parties involved, ensuring a smooth and legally sound employment relationship. If you have any questions about job title adjustments, please reach out to our team for further clarification.

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