United States Employer of Record
If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in the United States (U.S.), 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, Global Employment Outsourcing (GEO), and local HR experts can help you manage your international employment needs.
Hiring in United States
Employment in the U.S. is regulated by a combination of federal government and state governments. Generally, the U.S. 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.).
In order 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.
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.
As you consider the appropriate salary to offer new employees, keep in mind:
- 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 are not required, though many companies offer them in recognition of outstanding personal performance and/or company performance.
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 that have accrued unless that is 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.
As your employer of record in the United States, we can work with you to quickly handle the unforeseen event of an employee termination, providing legal guidance and a personalized process that ensures you stay out of labor court.
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.
Employers in the U.S. 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 which 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 as well as federal, state and local government agencies and schools both public and private.
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 own 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 U.S. 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 servicemember with a serious injury or illness.
Employers are not required to offer any paid vacation time, although most offer it to salaried employees in order 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 U.S. 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.
There are 10 federal holidays in the U.S.:
- New Year’s Day
- Martin Luther King, Jr. Day
- Presidents’ Day
- Memorial Day
- 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.
Employers are not required to offer any paid sick leave, though many do.
Health insurance is one of the most important benefits of employment in the U.S. There is no publicly funded healthcare, with the exception of Medicaid for citizens who meet certain low-income thresholds and Medicare for those 65 or older.
Under the Affordable Care Act (ACA), employers with 50 or more full-time employees (or the part-time equivalent) must provide health insurance to 95% of their full-time employees or pay a penalty of $3,860 per employee per year to the federal government. As a result, most large employers offer health insurance. Insurance must meet minimum requirements for coverage and affordability, and coverage must also be extended to the employee’s dependents (biological or adopted children under the age of 26). Spouses, stepchildren and foster children are not considered dependents.
Employers and employees typically share the cost of health insurance. This usually includes medical, dental and vision benefits.
Smaller employers are not obligated to offer insurance, but many do. How much coverage is offered and how costs are shared vary.
As your employer of record in the United States, we can provide a range of medical insurance plans for professionals and their dependents.
Employers are not required to offer any kind of retirement savings plan. Many choose to offer employees the opportunity to invest pre-tax dollars into a 401(k) fund, and some employers match contributions up to a certain amount.
Employees are entitled to receive partial Social Security benefits from the federal government beginning at age 62, or full benefits at age 70.
All states require employers to have insurance to compensate employees who suffer workplace injuries or illnesses through no fault of their own.
The premiums employers pay for workers’ compensation insurance are determined by a combination of private insurers and insurance rating bureaus, which for each state either is the insurance rating bureau specific to that state or the National Council on Compensation Insurance (NCCI).
Each state’s minimum and maximum benefits are determined by a state government agency, usually the state’s labor department or industrial commission.
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 Global Employment Outsourcing (GEO) to expand and hire in over 179 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—in more than 150 countries 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.
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.
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