Employers of Record (EORs) in the U.S.: Everything you need to know

Find out more about how Employers of Record in the U.S.

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The United States is a hub for global enterprises and has a large, diverse talent pool for those businesses to hire from. Domestic companies aren’t the only ones interested in hiring U.S. workers, however. Companies from all over the world can find valuable employees in the U.S. workforce, such as strong tech talent and professional services experts. 

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However, global hiring in the United States, as in most other countries, can be complicated. The traditional route for international companies looking to hire American workers is setting up an entity, but that can be time-consuming and costly. Using an employer of record (EOR) in the U.S. can solve this problem.

EORs in the U.S.

Employers of record are business entities that act as the legal employers of workers on behalf of other organizations. They handle employment tasks, such as processing payroll, filing the applicable employment taxes, and onboarding new employees. Companies often use these third-party organizations to facilitate the hiring and management of international employees. 

There are EORs in countries across the world, from Spain to the Philippines and even the United States. Using an EOR in the U.S., you can tap into the American talent pool without the usual headaches of global employment. Oyster’s global employment platform makes hiring across borders simple by handling all aspects of employment for you, including:

  • Compliance with local laws
  • Onboarding
  • Payroll
  • Benefits
  • Time off management
  • Offboarding

Talk to one of our advisors today to find out how our global employment platform can help your business onboard team members from the U.S. without the usual headaches.

A few things to know about hiring in the U.S.

If you’re not already familiar with U.S. hiring practices, there are a few factors you should keep in mind when hiring American workers. The following are some important considerations for hiring employees in the U.S.

At-will employment

Unlike some other countries, employment in the U.S. is at-will, which means employers can terminate U.S. employees at any time for any lawful reason without notice or severance - the exception to this rule being the State of Montana. Likewise, employees in the U.S. can leave a company at any time without notice, though it is customary to give two weeks' notice. Formal probationary periods for new employees are uncommon because employers can fire employees at any time. 

Employment contracts 

Employment contracts are unusual for employees in the U.S., except for executive positions. The employer’s offer letter to prospective employees should contain the relevant job particulars.  

Working hours

The typical work week in the U.S. is 40 hours long.  Federal law requires that eligible employees receive 1.5 times their regular pay rate for any hours worked past 40 hours in a workweek. Employers may also have to pay overtime to employees who worked more than 8 or 12 hours in a single workday, depending on the state.  Under state law, Employees may also be entitled to more than 1.5 times their regular rate once a certain threshold of overtime is worked.  

Paid leave 

U.S. law does not require employers to offer their employees paid time off for vacations or holidays. However, most companies offer 10 to 20 days of paid time off (PTO) per year. Similarly, employers in the U.S. are not required to offer paid sick leave, but they must provide eligible employees with up to 12 weeks of unpaid, job-protected sick leave each year under the Family Medical Leave Act (FMLA).  Employees may have additional leave entitlements under state and local law.

Find out more about hiring in the United States in our complete guide

State-by-state differences

Key employment laws such as overtime rules, minimum wage requirements, and paid time are different from state to state in the U.S. Employment laws in Arizona, for example, are not the same as the employment laws in New York. Many counties and municipalities have employment laws as well. It’s important to keep federal,state, and local laws in mind when considering your obligations as an employer of U.S. workers.

Taxes and the cost of hiring can also vary from state to state. Check out our state-specific cost of hiring calculators below to find out more:

Is employment dependent on what state the team member resides in?

As a foreign company hiring American workers, it’s important to keep in mind that federal, state, and local laws govern employment in the U.S. The states, counties, and municipalities where your prospective team members reside do affect your legal responsibilities as an employer, even as a company based outside of the U.S.

In general, you’re held to the employment laws of where your employees’ residence is located, though this can get more complicated with employees working remotely from another country. A U.S. employer of record can handle compliance with federal, state, and local employment laws to ensure you meet your legal responsibilities for American employees. 

If you’re interested in hiring U.S. workers, Oyster’s global employment platform can help—regardless of where in the world your business is based. Check out how Oyster simplifies global employment today. 

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.

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