Hire in United States

Employer of record in the United States

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in the United States (US), an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in the United States―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in the United States and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in the United States

A combination of federal and state governments regulates employment in the US. Generally, the US requires far less from employers than other countries when it comes to benefits, and especially paid leave of any kind (vacation, sick leave, maternity leave, etc.). 

To remain competitive, however, most companies do offer a full complement of benefits, from health insurance to paid time off. 

Most states consider employment to be at will, meaning that employees can be terminated (or quit) without notice or severance.

Since labor laws can vary considerably from state to state in the United States, compliant employment contracts are an essential business need. As your employer of record and PEO in the United States, we can ensure that every contract, for every worker, meets all requirements. We can also provide you with guidance about cultural norms and hiring best practices and keep you up-to-date with employment regulations as they change.

Employment contracts in the United States

As you look to hire employees in the United States, here are some common regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours

While the typical workweek is eight hours a day and 40 hours a week, with two days off (usually Saturday and Sunday) there is no legal limit to the hours or days an employee can work. Some exceptions exist, e.g. for airline staff and long-haul truck drivers.

Compensation

As you consider the appropriate salary to offer new employees, keep in mind:

• The federal minimum wage is $7.25 an hour.
• Thirty states require a higher minimum wage.
• In some states, minimum wage requirements differ based on the total number of people employed.
• Collective agreements may regulate the legal salary range.

As your employer of record in the United States, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses

Bonuses are not required, though many companies offer them in recognition of outstanding personal performance and/or company performance.

Probationary period

Probationary periods are permitted and can range from one month to a full year.

Termination and severance

Most states consider employment to be at will, which means that an employee can be terminated at any time for any reason as long as it’s not illegal. Neither notice nor severance is required; however, many employers do give notice, severance or both. Severance is often based on seniority and/or the total number of years worked for that employer.

Employers are not required to compensate employees for unused vacation days accrued unless specified in a contract or collective bargaining agreement. Some states require that the employer pay the employee for all outstanding wages, including unused vacation time if required, immediately upon termination.

Employee benefits and paid leave in the United States

When negotiating terms of an employment contract with a candidate in the United States, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave 

Employers in the US are not required to provide any paid maternity leave, although many offer it as a benefit. As a result, the duration and the amount of compensation vary.

The Family and Medical Leave Act (FMLA) is a federal law that entitles eligible employees of covered employers to take up to 12 weeks a year of job-protected, unpaid leave for specified family and medical reasons. FMLA applies to companies with 50 or more employees, federal, state, and local government agencies, and schools.

FMLA can be taken to care for a new baby, an adopted child, or a child in foster care; to care for a spouse, child, or parent with a serious health condition; for one’s serious health condition; and, as the result of the employee’s spouse, child or parent being on active duty or being called up for duty in the US National Guard or Reserves.

To be eligible for FMLA leave, an individual must meet the following criteria:

• Be employed by a covered employer and work at a worksite within 75 miles of where that employer employs at least 50 people.
• Have worked at least 12 months (which do not have to be consecutive) for the employer.
• Have worked at least 1,250 hours during the 12 months immediately before the date

Additionally, 26 workweeks of leave during a single 12-month period may be taken to care for a spouse, child, parent, or next of kin who is a covered service member with a serious injury or illness.

Vacation

Employers are not required to offer any paid vacation time, although most offer it to salaried employees to remain competitive, and some offer it to employees paid by the hour as well. The amount given differs from company to company, but two to four weeks is customary, with more offered according to an employee’s seniority.

Many employers in the US have switched from paid vacation and sick leave to Paid Time Off (PTO), where an employee can take a certain number of paid days off each year for any reason. Unlimited PTO is becoming more popular as well.

Holidays

The following are the federal holidays in the US:

• New Year’s Day
• Martin Luther King, Jr. Day
• Presidents’ Day
• Memorial Day
• Juneteenth
• Independence Day
• Labor Day
• Columbus Day (celebrated in some places as Indigenous Peoples’ Day)
• Veterans Day
• Thanksgiving Day
• Christmas Day

Employers are not required to offer any paid holidays, although most do. Non-government employers do not typically observe Columbus Day (or Indigenous Peoples’ Day) or Veterans Day but usually add the Friday after Thanksgiving, Christmas Eve Day, and New Year’s Eve Day.

Some employers, especially when required by a collective bargaining agreement, pay time-and-a-half or double-time to employees who work on federal holidays.

Sick leave

Employers are not required to offer any paid sick leave, though many do.

Health coverage

Employer-provided health care plans are required for many employers and can be provided without tax consequences to employees. Adoption assistance payments up to certain amounts per year also can be excluded from income taxation. The cost of group-term life insurance coverage of up to US $50,000 is excluded from federal income tax.

The Medicare or Health Insurance (HI) component of the FICA tax also consists of an employer portion financed through direct payment by employers and an employee portion financed by withholding employees’ wages and remitting the withheld amounts to the Internal Revenue Service.

The employer portion is a flat rate of 1.45% on each employee’s wages. For each employee, a Medicare tax rate of 1.45% is assessed on wages paid to the employee during the year up to the annual wage threshold of US $200,000, and a rate of 2.35%, consisting of the base rate of 1.45% and additional Medicare tax rate of 0.9%, is assessed on wages paid to the employee during the year above the annual wage threshold of US $200,000.

Social Security tax and Medicare tax must be withheld from employees’ wages when they are paid to employees and the employer portions of these taxes must be paid when the withheld amounts are submitted to the IRS.

Additional benefits

In addition to healthcare benefits, employees in the United States are entitled to pension, which is funded by government tax revenues, as well as workers compensation, which is covered through mandated employer insurance.

Employer social costs will cover a large portion of employee benefits in the United States, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance if needed.

Updated: April 18, 2024

Employee onboarding with an employer of record in the United States

We write and validate all local employment contracts, streamlining the onboarding process for you and your American employees—all you have to do is provide relevant information and review and approve the employment agreement. As your employer of record in the United States, we will:

• Schedule a welcome call to discuss HR and employment information for the United States, as well as answer any questions 
• Prepare a customized employment contract in English 
• Share the employment contract and benefits information with the new employee for signature and review
• Gather tax and banking information from the employee to set up payroll 
• Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll

The entire onboarding process for the employee is often completed in as little as two weeks.

Partner with Safeguard Global as your United States employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution to expand and hire in over 170+ countries around the world, quickly and compliantly. 

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in the United States. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization. 

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

Disclaimer: The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.