Employer of Record (EOR) in the USA

partner PEO USA
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Acvian
Figure Two. G7 Real GDP% Change Compared to Pre-Pandemic Levels
ACVIAN PEO
Figure One. Shares of the Global Economy

Contracts

A good place to start with understanding USA employment law is being aware of ‘At Will’ contracts, which the majority of USA-based workers are employed on. At Will contracts stipulate that workers can leave their jobs at any time, and allow employers to terminate as and when they want as well (though they need to remain compliant with equal opportunity and non-discrimination laws). Some contracts via Partner PEO USA will stipulate only being terminated for cause, and other legally enforceable clauses, many of which are outlined below.

Hiring

The USA boasts a competitive labor market and negotiating offers can be tricky and fierce. Applicants will come to these discussions with labor market data (such as comparative salaries and benefit levels) and will be looking for specific terms added to the contracts, such as separation clauses, vacation days, and enhanced benefits including healthcare.

Probation Periods

Some employers have a trial period for new employees, while others do not. For most employers who require a trial period — also known as a probationary period or an introductory period of employment (also by the partner PEO USA) — the employee typically will receive a review after a specified period of time.

Working Hours

The standard working week in the USA is forty hours, although part-time contracts are common. Flexible schedules and even days off can be negotiated as part of a job offer.

Leave

There is no set minimum for vacation days in the USA — this number is usually negotiated as part of a contract. There are ten national holidays, (New Year’s Day, the Birthday of Martin Luther King, Jr., George Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving, and Christmas Day) but private employers are not required to offer these days as paid time off (although it is common practice to do so).

Pay

Overtime is a statutory right for ‘non-exempt employees’, and is paid at 1.5 times for any hours worked over the employee’s contracted weekly hours. Taxes include Social Security (6.2%) and employer and employee contributions to Medicare (1.45%). Employers must contribute to the Federal unemployment Tax for each employee. The current minimum wage in the USA is $7.25 per hour.

Benefits

Private health insurance isn’t required to be provided, but the Affordable Care Act penalizes employers and partner PEO USA who don’t offer this benefit. Supplementary benefits (including healthcare) are often negotiated by employees when they are offered a role. These can include pensions, including defined contribution plans such as the 401(k) and 403(b), scheduling, leave, and life insurance.

Final thoughts on EOR USA and partner PEO USA

With many idiosyncrasies and a leaning towards flexibility, ambiguity, and hard negotiation, the USA’s labor market requires some serious navigating. Employer of Record (EOR) in the United States can help businesses manage labor needs and regulations. Acvian is a global employment organization that supports companies and entrepreneurs with these services (and we also offer free tools, like the payroll cost calculator). Being your professional employment provider Acvian will take care of your workforce overseas and all HR related questions:

  • Employee onboardings
  • Local agreement drafting and approval
  • Payroll setup and calculation
  • Wages payment and payslips providing
  • Benefits compensation and expenses reimbursement
  • Tax filing
  • Legal consultancy

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Employer of Record Services in 118 Countries