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In this video, Scott from Cruz Consulting discusses the significance of the term "employer of record," particularly in the context of startups and the rising popularity of Professional Employer Organizations (PEOs) due to changes caused by COVID-19. With employees increasingly relocating across the country and globally, companies require a new approach to payroll and benefits. An employer of record legally employs individuals on behalf of a company through a PEO, meaning employees are contractually connected to the PEO rather than the startup itself. This arrangement allows PEOs to manage employees across various organizations efficiently.