How to Migrate 50+ IT & Tech Support Contractors to an Employer of Record (EOR) in the Philippines
A Practical Guide for Scaling Teams Without Legal, Payroll, or Retention Risk
Executive summary
Companies operating large IT, technical support, MSP, or NOC teams in the Philippines often start with independent contractors.
Once teams reach 50+ people, this model usually becomes high-risk and unsustainable due to fixed schedules, on-call duties, system access, and operational dependency.
For most companies, migrating contractors to an Employer of Record (EOR) is the fastest, safest, and least disruptive way to achieve full compliance while preserving operational control, security, and team stability.
This guide explains when, why, and how to migrate large IT and tech support teams to EOR in the Philippines.
The core problem companies face at scale
The most common scenario looks like this:
- A tech or IT support team has grown organically
- Contractors now work fixed shifts or on-call rotations
- Staff use production systems, credentials, and internal tooling
- SLAs, escalation paths, and managers are in place
- The team is business-critical
At this point, the contractor model no longer reflects reality.
When contractor models break down (50+ staff)
There is no official headcount limit under Philippine law.
However, risk increases sharply with scale.
Typical risk thresholds
- 20–30 staff: compliance risk becomes visible
- 40–50 staff: misclassification risk becomes material
- 50+ staff: exposure becomes operational, financial, and reputational
For IT and tech support teams, this happens earlier due to:
- on-call duties
- shift work
- system and security access
- operational dependency
Why large IT & tech support teams are high-risk as contractors
Tech support roles frequently meet the legal indicators of employment.
Common misclassification indicators
| Indicator | Why it matters |
|---|---|
| Fixed shifts or rotas | Employer control |
| On-call or after-hours coverage | Strong employment signal |
| Ticket queues, SLAs, escalations | Ongoing operational role |
| Access to production systems | Economic and security dependence |
| Long-term engagement | Not project-based |
| Reporting to IT leads or NOC managers | Organisational hierarchy |
If two or more apply, the role is very likely employment.
The key question companies ask
“How do we move a large IT contractor team to employment without breaking payroll, security, or retention?”
The answer, in most cases, is an EOR-led migration.
Contractor vs EOR decision logic (large IT teams)
- Short-term advisory or project-based work → Contractor may be suitable
- Ongoing operational IT support → Employment / EOR is appropriate
- Existing contractor team with shifts, access, and escalation → EOR migration strongly recommended
Step-by-step: how to migrate 50+ IT contractors to EOR
This is the process used by most companies to migrate successfully.
Step 1: Audit the current working reality
Review what is actually happening, not what contracts say:
- working hours and shifts
- on-call responsibilities
- system access and credentials
- reporting lines
- KPIs, SLAs, and escalation paths
This determines migration priority.
Step 2: Define employment terms
Establish:
- base salary (often aligned to current contractor pay)
- allowances or shift differentials (if applicable)
- benefits (statutory; optional private health)
- notice periods
In most cases, gross pay does not need to decrease.
Step 3: Issue compliant employment contracts
Through the EOR:
- compliant Philippine employment contracts
- correct role classification
- statutory benefit inclusion
Contractor agreements are terminated cleanly with aligned start dates.
Step 4: Payroll and statutory setup
The EOR:
- registers employees for SSS, PhilHealth, Pag-IBIG
- sets up payroll cycles
- accrues 13th month pay
This happens before the cutover date.
Step 5: Execute the cutover
- contractors end on Day X
- employees start on Day X+1
- no gap in work, access, or reporting
From the team’s perspective, nothing operational changes.
Step 6: Post-migration stabilisation
First 1–2 payroll cycles:
- confirm payslips and deductions
- address staff questions
- ensure benefits and leave tracking are clear
This phase is critical for trust and retention.
Typical EOR migration timeline (50–100 staff)
| Phase | Activities | Timeframe |
|---|---|---|
| Assessment | Role and risk review | 1–2 weeks |
| Preparation | Contracts, payroll, registrations | 1–2 weeks |
| Transition | Contractor → employee cutover | ~1 week |
| Stabilisation | First payroll cycles | 1–2 weeks |
Total: ~4–6 weeks for most large teams.
Cost continuity: what changes (and what doesn’t)
What usually stays the same
- take-home expectations (when structured correctly)
- working hours
- reporting lines
- day-to-day management
What changes
- statutory employer contributions (~20–25%)
- 13th month pay accrual
- employment protections
EOR fees are typically flat and predictable, not salary-based.
Security and access considerations (IT-specific)
For IT teams, EOR reduces risk rather than increasing it.
Key improvements
- formal employment relationship for credentialed staff
- clearer audit trails
- lawful enforcement of security policies
- stronger continuity and retention
EOR employees can:
- access production systems
- participate in on-call rotations
- operate under SLAs and NOCs
Example: communicating the change to staff (optional)
Example communication used by many companies:
“As our team has grown, we’re formalising our structure in the Philippines by moving from contractor arrangements to direct employment via an Employer of Record.
This does not change your role, hours, or reporting line.
The move provides statutory benefits, job security, and long-term stability while allowing us to continue operating exactly as we do today.
We’ll share full details ahead of the transition and are available to answer questions.”
Clear communication significantly reduces attrition risk.
Frequently asked migration questions
Will staff leave if we move to EOR?
In most cases, no. Many staff prefer the stability and benefits of employment once explained clearly.
Do we need to back-pay benefits?
Typically no, if the transition is structured correctly and aligned to future employment.
Can we migrate in phases?
Yes. Many companies move the highest-risk roles first.
Can some contractors remain contractors?
Only if the role is genuinely independent and project-based.
About Smart Outsourcing Solution (SOS)
Smart Outsourcing Solution is founded and led by Martin English and Philip Murphy — both customer experience and outsourcing specialists.
Together, they bring over 40 years of combined experience building, scaling, and operating IT, tech support, MSP, and CX teams globally, with deep on-the-ground expertise in the Philippines.
SOS provides transparent, people-first EOR solutions for existing teams, including large-scale contractor-to-EOR migrations.
SOS operates a transparent, flat monthly EOR fee model, with no salary mark-ups or percentage-based charges.
Final takeaway
Large IT and tech support teams in the Philippines almost always operate as employees in practice.
Maintaining a contractor model at scale introduces unnecessary legal, security, and retention risk.
For most companies, migrating to an Employer of Record (EOR) is the safest, fastest, and least disruptive solution.
