Hiring in United States

The offer letter sets out role, salary in USD, exempt or non-exempt status, benefits and any restrictive covenants. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

English is the standard contract language. Some states, including New York and California, require a written notice of pay details at hire.

Fixed-term contracts are permitted but rare, because at-will employment already lets either side end the relationship. Non-compete rules vary by state, and California voids most of them.

Montana is the exception. Its default probation is 12 months unless the employer sets its own period, and dismissal after that needs good cause.

Elsewhere, a probation clause that implies job security once it ends can weaken at-will status, so some EORs leave it out altogether. Ask before you agree a start date.

Exempt status needs a salaried role, qualifying duties and pay of at least 684 USD a week under federal rules. California, New York, Washington and other states set higher floors, and California adds daily overtime.

Most professional hires are exempt, so overtime becomes a contractual matter rather than a statutory one. Check the state test as well as the federal one, and put the position in writing either way.

Market practice for professional roles is 10 to 20 days of paid time off plus most of the 11 federal holidays, so quote the market figure when you budget.

The FMLA gives up to 12 weeks of unpaid, job-protected leave once eligibility tests are met. Paid family leave is run by a growing list of states and funded through payroll contributions, so confirm which programmes apply where the employee lives.

Either side may end employment without notice or a reason, provided the reason is not unlawful. Severance is a matter of contract and market practice, usually paid in exchange for a signed release of claims, with extra rules for employees aged 40 and over.

The EOR runs the process as the legal employer and will want the paperwork in order, including final pay deadlines set by state law, accrued PTO where the state requires payout and any contractual severance. Discrimination and retaliation claims are common, so keep a documented reason.

Health insurance is usually the largest cost after salary and varies sharply by plan and state. A 401(k) with an employer match is standard for professional roles, and several states require employers without a plan to enrol staff in a state retirement scheme.

EORs often bundle benefits through a group scheme. Ask what is included in the fee and what is billed on top.

Employer payroll taxes add 7.65% for Social Security and Medicare, with Social Security capped at an annual wage base, plus federal and state unemployment tax and workers' compensation. That is before health cover and the EOR fee.

State registration is the trap. Every state where an employee lives or works needs its own withholding and unemployment accounts, so check the EOR is already registered there before you agree a start date.

Ask whether the EOR sponsors directly or refers to a partner. Many EORs do not sponsor US visas at all, and the L-1 transfer route needs a corporate link to your own company, which an EOR cannot provide. The 100,000 USD fee on new H-1B petitions for workers abroad has been extended but is blocked in court, so check its status before you budget.

Every hire, citizen or not, needs a Form I-9 check within three business days of starting. Set start dates after visa approval, not before.

Get the data processing terms in the service agreement, not just the privacy notice. Health plan data and biometrics carry their own rules, including HIPAA and Illinois' biometric privacy law.

If HR data flows from the UK or EU, the transfer still needs a lawful basis. Ask where payroll data is hosted and who in the partner chain can see it.

Incorporation here takes days, but the running cost is the point: a registered agent, registration in each state where staff work, federal and state tax filings, payroll and benefits administration set an annual floor. Pairing your own entity with a professional employer organisation (PEO) is a common halfway house.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create federal and state tax exposure regardless of the employment route.