How To Hire And Pay Employees In The United States
Emerald Technology's guide to hiring employees in The United States.
United States Dollar is the official currency of The US. Its currency symbol is $, USD.
Estimated at 11.08% - 16.85% of an employees salary
English is the most prominent spoken language in the US, with over 240 million speakers across the country.
GROW YOUR TEAM IN THE U.S
TABLE OF CONTENTS
NO ENTITY, NO PROBLEM
To start growing your team in the United States, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months.
Emerald can hire and payroll your workers quickly and compliantly with their 'ready to go' entity. Make growing your team simple with Emerald as a global partner.
Pros and Cons of hiring in the United States
The US has an extremely educated workforce, claiming 30 of the top 100 best universities in the QS World University Rankings, with the Massachusetts Institute of Technology (MIT) taking the top spot. Whether you require tech, life sciences, creative, or financial talent; you’re sure to find the top achievers in the US to drive your business goals forward.
If you embrace remote working, you have 50 different states to source talent from. Some states are known for being market leaders within industries. For example, if you are operating within the technology and IT space, areas like Texas, North Carolina, and California, are famed for their tech hubs and ability to attract top talent. Likewise, New York is a global leader in finance and creative industries.
The US has implemented 'at will' employment, which is unique to the US. Within employment contracts, US employees are hired 'at will', meaning, the employer or employee can terminate the employment at any time, with or without any notice.
There is also no state-sponsored healthcare, so employers with more than 50 employees are legally required to offer employees healthcare benefit plans.
Why the United States is good for remote workers
Americans are embracing flexible work, just like the rest of the world.
58% of the US workforce now have the opportunity to work from home, making it an attractive option for other remote workers and digital nomads.
Miami and Las Vegas have both been recognised as some of the most appealing places to live and work in the world.
To date, 24 states have implemented special remote working incentives including digital nomad visas, tax incentives, and relocation payments.
START GROWING YOUR REMOTE WORKFORCE NOW
Employer Costs
| Cost | Rate |
| FICA Social Security | 6.20% |
| FICA Medicare | 1.45% |
| FUTA Unemployment Tax Act | 0.60 - 6% |
| Unemployment Insurance (State) | 0.01% - 20.06% |
| New Unemployment Insurance (State) | 0.1% - 5.40% |
| Disability | 0.10% - 0.75% |
- These are estimated across all states, some might not be relevant depending on state.
Benefits
Mandatory
US employers are required to offer the following benefits to all full-time employees:
- Social Security
- Unemployment Insurance
- Health Insurance
- Medicare
- Worker's compensation
- Medical and family leave
Additional
Some employers like to offer additional benefits to improve employee retention and satisfaction.
- Hybrid Working
- Discounts
- Life Insurance
Employment
Contract
There is no legal requirement for a contract in the US, however it is best practice to provide a contract in writing to state the terms of employment.
- Employer details
- Start Date and Expected End Date
- Job Title
- Job Description
- Overtime
- Timesheet submittal method
- Salary
- Work Location
- Holiday entitlement
- Benefits
Probation Period
Probation periods in the US are not statutory but are recommended as an opportunity for both the employer and employee to evaluate the suitability of the arrangement. A typical probation period in the US is between 3-6 months and can be extended.
Emerald Technology can provide a compliant contract in the US within 48 hours.
Insurance
Healthcare
Employers are not required to provide health insurance as a benefit to employees until they reach 50 full time employees. Once they have hit this number, they can be penalised under the Affordable Care Act for falling to provide policies. The ACA has also introduced tax credits for small businesses to assist with the cost of health insurance
Social Security
Every employee and employer in the US must pay social security contributions. It is the employers' responsibility to make the relevant deductions from an employee's salary. The contribution rate is 6.2% regardless of the employee's earnings, capped at $147,000 per annum. The same contribution rate applies to both employees and employers.
Leave Policy
Parental Leave
The U.S is one of the only countries in the world that does not require paid maternity or paternity leave by law. However, although paid parental leave is not required at the federal level in the U.S, a few states do mandate paid parental leave.
Under the Family and Medical Leave Act (FMLA) some employees are entitled to up to 12 weeks of unpaid maternity leave. This is on the basis that the employer has at least 50 employees within a 75-mile radius, and that the employee has worked at least 1,250 hours over the past 12 months. Some companies do offer paid parental leave to be competitive and be a desirable place to work.
Sickness Leave
Employers are not required to offer sick leave to their employees. If an employee does need to take time off due to illness, under the Family and Medical Leave Act (FMLA), some employees are entitled to up to 12 weeks unpaid sick leave. Sickness leave is one of the more common benefits within the US that employers do offer.
Onboarding
As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:
- Passport / ID (in line with I-9 work authorisation acceptable documents)
- W-4 and local tax forms
Emerald Technology can onboard employees in the U.S within 5 days.
Resignation and Dismissal
Many employees in the US, with the exception of those in the state of Montana, are employed 'at will' meaning both the employee and employer can terminate the employment relationship at any time. If a written contract of employment is provided, most employers will state any required notice periods for both parties.
The employment contracts of management, senior executives, and highly skilled workers will often include a 'just cause' termination clause, meaning the employee may only be terminated on specific permitted grounds.
In mass dismissal cases, the Worker Adjustment and Retraining Notification (WARN) will need to be followed. The WARN Act has various criteria depending on the number of employees and the reason for the mass layoff of employees.
Severance
There is no legal requirement for employers to provide terminated employees severance payments. However, this can be negotiated when the employee is first hired.
Statutory Time Off
Annual Leave
Annual leave is not a legal requirement in the United State. However, most employers will offer paid annual leave to employees. This is typically 10 days, but can vary.
Public Holidays
There are 10 public holidays in the US, however, this can vary according to the state the employee is located in. It is at the employers discretion if an employee is paid for public holidays.
- New Years Day
- Martin Luther King's Birthday
- Washington Birthday
- Memorial Day
- Juneteenth National Independence Day
- Independence Day
- Labor Day
- Columbus Day
- Veteran's Day
- Thanksgiving
- Christmas Day
READY TO HIRE YOUR EMPLOYEES IN THE US?
Work, Pay and Taxes
Minimum Wage
The federal minimum wage is $7.25 per hour (USD). Some states or cities may set this rate higher than the federal minimum wage.
Working Time and Overtime
The standard working week is 40 hours per week. However, there is a substantial variation amongst industries and jobs. Under the Fair Labour Standards Act (FLSA), non-exempt employees who work more then 40 hours per week are entitled to one and a half times their standard salary rate.
Employees that are exempt are not entitled to overtime payment. Typical jobs that are exempt are; managerial or executive positions, administrative positions, creative jobs and professional positions.
Salary Payments
Most states in the US require employees to be paid fortnightly. However, some do allow monthly payments, whilst others require weekly.
Bonus
Employers are not required to provide employees a bonus. Any bonuses offered are at the employer's discretion.
Income Tax
The U.S tax year runs from January to December. It is the employer’s responsibility to ensure taxes are paid from salaries before payments are made to employees. There are state taxes to pay which vary in each state as well as federal tax. Federal tax varies depending on the employee’s personal situation, such as if they are single, married or jointly filing with a partner, or if they are head of their household.
The below figures are based in a single employee with no dependants.
| Salary | Tax Percentage |
| Up to $9,950 | 10% |
| $9,951 - $40,525 | 12% |
| $40,526 - $86,375 | 22% |
| $86,376 - $164,925 | 24% |
| $164,926 - $209,425 | 32% |
| $209,426 - $523,600 | 35% |
| $523,601+ | 37% |
WORKER MISCLASSIFICATION IN THE U.S
Similar to other countries, The U.S has strict rules on classifying individual contractors and full-time employees differently. Misclassifying your workers can put your business at risk of fines.