How to Hire Employees in United States: A Strategic Guide

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Why United States Is a Strategic Market for Global Hiring

The United States represents the world’s largest economy with a GDP exceeding $25 trillion, offering unparalleled access to diverse talent pools, innovation hubs, and consumer markets. With over 330 million people and a highly skilled workforce across technology, finance, healthcare, and manufacturing sectors, the U.S. provides strategic advantages for companies seeking to scale operations. The nation’s business-friendly environment, advanced infrastructure, and strong intellectual property protections make it an attractive destination for global employers despite complex regulatory frameworks.

Strength of the Local Talent Ecosystem in United States

The United States boasts one of the world’s most educated and diverse workforces, with leading universities producing graduates in STEM fields, business, and creative industries. Major tech hubs like Silicon Valley, Austin, Boston, and Seattle attract global talent and foster innovation ecosystems.

The U.S. labor market offers access to specialized skills across emerging technologies including artificial intelligence, biotechnology, fintech, and renewable energy. With a workforce participation rate of approximately 63% and strong entrepreneurial culture, employers can tap into both established professionals and emerging talent pools across all 50 states and various industry clusters.

Business Environment and Regulatory Predictability

The United States maintains a stable legal framework with strong contract enforcement, transparent business regulations, and well-established commercial laws. The country ranks consistently high in ease of doing business indices, offering predictable tax structures and intellectual property protections.

However, employers must navigate a complex multi-layered regulatory system spanning federal, state, and local jurisdictions. Employment laws vary significantly by state, covering minimum wage, overtime, discrimination protections, and leave policies. While the federal government sets baseline standards through agencies like the Department of Labor and Equal Employment Opportunity Commission, state-specific compliance requirements add complexity to hiring operations.

What Should Employers Consider Before Hiring Employees in United States?

Hiring in the United States requires careful consideration of worker classification, multi-jurisdictional compliance, and comprehensive benefit obligations. Employers must understand the distinction between employees and independent contractors, as misclassification carries severe penalties including back taxes, benefits, and legal consequences. Federal and state labor laws govern working hours, overtime eligibility, leave entitlements, anti-discrimination requirements, and workplace safety standards. Understanding at-will employment principles, termination procedures, and state-specific requirements is essential before extending offers. Employers must also consider health insurance obligations, retirement plan requirements, and various payroll tax responsibilities across different jurisdictions where employees work.

Understanding Employment Classification and Worker Status in United States

The United States distinguishes between employees and independent contractors using multi-factor tests that examine behavioral control, financial control, and the relationship’s nature. The IRS, Department of Labor, and individual states apply different standards, creating complexity for classification decisions.

Employees receive W-2 forms and are entitled to minimum wage, overtime, unemployment insurance, workers’ compensation, and various statutory protections. Independent contractors receive 1099 forms and operate as separate businesses without employment benefits.

Exempt vs. Non-Exempt: Employees are classified as exempt (salaried, no overtime) or non-exempt (hourly, overtime eligible) under Fair Labor Standards Act
Full-Time vs. Part-Time: Definitions vary by employer and affect benefit eligibility, particularly health insurance under ACA
Misclassification Risks: Penalties include back wages, taxes, benefits, and potential criminal charges for willful violations

Working Hours, Leave Policies, and Statutory Benefits Requirements

Federal law establishes a standard 40-hour workweek with overtime pay at 1.5 times regular rate for non-exempt employees exceeding this threshold. The Fair Labor Standards Act (FLSA) sets the federal minimum wage at $7.25 per hour, though many states and cities mandate higher rates.

The United States has no federal requirement for paid vacation, sick leave, or parental leave. However, the Family and Medical Leave Act (FMLA) provides up to 12 weeks of unpaid, job-protected leave for eligible employees at companies with 50+ workers.

State-Mandated Leave: Many states require paid sick leave (California, New York, Washington) and paid family leave programs
Health Insurance: Employers with 50+ full-time employees must offer affordable health coverage under Affordable Care Act (ACA)
Retirement Benefits: While not mandatory, many employers offer 401(k) plans with employer matching contributions
Workers’ Compensation: Required in most states to cover work-related injuries and illnesses

Termination Rules, Notice Periods, and Severance Obligations in United States

The United States operates under at-will employment doctrine, meaning either employer or employee can terminate the relationship at any time without cause or advance notice in most states. However, terminations cannot be based on protected characteristics including race, gender, age, religion, disability, or national origin.

Federal law does not require severance pay or advance notice for individual terminations. The Worker Adjustment and Retraining Notification (WARN) Act requires 60 days’ notice for mass layoffs affecting 50+ employees at sites with 100+ workers.

Final Paycheck: State laws dictate timing, ranging from immediate payment to next regular payday
Unemployment Benefits: Former employees may qualify for state unemployment insurance funded by employer taxes
COBRA Continuation: Employers with 20+ employees must offer continued health insurance coverage for up to 18 months
Documentation Requirements: Maintaining proper termination records protects against wrongful termination claims

What Is the True Cost of Hiring an Employee in United States?

The true cost of hiring an employee in the United States extends significantly beyond base salary, typically adding 25-40% in additional expenses. Employers must account for mandatory payroll taxes including Social Security, Medicare, federal and state unemployment insurance, and workers’ compensation premiums. Health insurance represents the largest discretionary cost, averaging $7,000-$15,000 annually per employee for employer contributions. Additional costs include retirement plan contributions, paid time off, professional development, recruitment expenses, compliance infrastructure, and administrative overhead. Location significantly impacts costs, with metropolitan areas commanding higher salaries and benefits expenses than rural regions. Understanding total compensation packages is essential for accurate budgeting and competitive positioning.

Base Salary and Local Compensation Benchmarks

Base salaries in the United States vary dramatically by role, industry, experience level, and geographic location. Technology professionals in major hubs like San Francisco or New York command premium salaries often 30-50% higher than national averages, while similar roles in secondary markets offer lower compensation with reduced living costs.

Minimum wage ranges from the federal floor of $7.25 per hour to over $15-$17 in states like California, Massachusetts, and Washington. Professional salaries span widely, with entry-level positions starting at $40,000-$60,000, mid-career professionals earning $70,000-$120,000, and senior specialists or executives commanding $150,000-$300,000+ annually.

Role Level	Typical Salary Range
Entry-Level	$40,000 – $60,000
Mid-Career	$70,000 – $120,000
Senior Professional	$150,000 – $300,000+

Employer Payroll Taxes and Statutory Contributions in United States

U.S. employers face multiple mandatory payroll tax obligations at federal and state levels. Federal Insurance Contributions Act (FICA) requires employers to pay 7.65% of wages, split between 6.2% for Social Security (on wages up to $160,200) and 1.45% for Medicare (no wage cap). An additional 0.9% Medicare tax applies to high earners, though this is employee-paid.

Federal Unemployment Tax Act (FUTA) imposes a 6% tax on the first $7,000 of wages, reduced to 0.6% with state unemployment tax credits. State unemployment insurance (SUI) rates vary widely by state and employer experience rating, typically ranging from 0.5% to 10% of wages.

Social Security Tax: 6.2% employer contribution on wages up to annual cap
Medicare Tax: 1.45% employer contribution on all wages
FUTA Tax: 0.6% effective rate after state credits on first $7,000
State Unemployment: 0.5-10% depending on state and claims history
Workers’ Compensation: Varies by state, industry, and risk classification (typically 0.5-5% of payroll)

Compliance, Benefits, and Administrative Overheads

Beyond mandatory taxes, employers incur significant costs for employee benefits, compliance infrastructure, and administrative functions. Health insurance represents the largest discretionary expense, with employers contributing an average of 70-85% of premium costs. Group health plans for small businesses cost $6,000-$8,000 per employee annually, while larger organizations may pay $12,000-$15,000 for family coverage.

Additional benefit costs include retirement plan contributions (typical 3-6% 401k match), life and disability insurance, dental and vision coverage, and employee wellness programs. Administrative overhead includes payroll processing systems, HR management software, compliance monitoring, legal counsel, and dedicated personnel for benefits administration.

Health Insurance: $7,000-$15,000 annual employer contribution per employee
Retirement Plans: 3-6% employer match on 401(k) contributions
Paid Time Off: Average 10-15 vacation days plus 8-10 holidays (unpaid federally but employer-provided)
Compliance Costs: Legal review, policy development, training, and recordkeeping systems
Recruitment & Onboarding: Typically 15-30% of annual salary for recruitment and initial training

What Compliance Steps Must Employers Follow to Hire in United States?

Hiring employees compliantly in the United States requires navigating a complex multi-jurisdictional framework of federal, state, and local regulations. Employers must register with multiple government agencies, obtain Employer Identification Numbers (EIN), establish payroll tax accounts, secure workers’ compensation insurance, and implement compliant employment policies. Federal requirements include Form I-9 employment eligibility verification, W-4 tax withholding forms, new hire reporting, and adherence to equal employment opportunity laws. State-specific obligations vary significantly and may include paid leave programs, disability insurance, unique posting requirements, and industry-specific licensing. Ongoing compliance demands accurate recordkeeping, regular policy updates, anti-discrimination training, workplace safety protocols, and timely tax filings across multiple jurisdictions.

What Are the Requirements for Hiring Through a Local Entity?

Establishing a local entity in the United States requires formal business registration with state authorities, typically as a corporation, LLC, or branch office of a foreign entity. This process involves selecting a registered agent, filing articles of incorporation or organization, obtaining an Employer Identification Number (EIN) from the IRS, and registering for state and local tax accounts.

Employers must register with state workforce agencies for unemployment insurance, secure workers’ compensation insurance coverage, and establish payroll systems compliant with federal and state withholding requirements. Additional steps include implementing required employment posters, creating compliant employee handbooks, establishing Form I-9 verification procedures, and registering with E-Verify if required by state or federal contracts.

Entity Formation: Register business with state, obtain EIN, establish registered agent
Tax Registration: Federal, state, and local tax accounts for income tax withholding and unemployment
Insurance Requirements: Workers’ compensation, unemployment insurance, general liability
Employment Compliance: I-9 verification, W-4 forms, new hire reporting, workplace posters
Ongoing Obligations: Quarterly tax filings, annual reports, ACA reporting, EEO-1 reporting for larger employers

What Are the Requirements for Hiring Through an Employer of Record?

Hiring through an Employer of Record (EOR) in the United States allows companies to employ workers without establishing a local entity. The EOR becomes the legal employer, handling all compliance, payroll, tax withholding, benefits administration, and regulatory filings while the client company manages day-to-day work activities and responsibilities.

The client company identifies candidates, conducts interviews, and makes hiring decisions. The EOR then executes compliant employment contracts, enrolls employees in benefits programs, processes payroll with accurate tax withholding across relevant jurisdictions, maintains employment records, and ensures compliance with federal and state labor laws.

No Entity Required: EOR maintains legal employer status, eliminating need for local incorporation
Rapid Deployment: Hire employees within days rather than months required for entity establishment
Compliance Management: EOR handles multi-state tax registration, labor law compliance, and regulatory changes
Benefits Administration: Access to group health insurance, retirement plans, and statutory benefits
Reduced Administrative Burden: EOR manages payroll processing, tax filings, and employment documentation

How Do Different Hiring Models Compare in United States?

Companies can engage U.S. workers through three primary models: establishing a local entity, partnering with an Employer of Record (EOR), or engaging independent contractors. Each approach offers distinct advantages and limitations regarding control, compliance responsibility, cost structure, and implementation timeline. Local entities provide maximum control and long-term cost efficiency but require significant upfront investment and ongoing administrative infrastructure. EOR partnerships enable rapid, compliant hiring without entity establishment, ideal for testing markets or employing small distributed teams. Independent contractors offer flexibility and reduced costs but carry substantial misclassification risks and provide limited control. The optimal model depends on factors including expansion timeline, team size, growth projections, risk tolerance, and strategic objectives in the U.S. market.

Hiring Through a Local Subsidiary or Branch

Establishing a local subsidiary or branch office provides maximum operational control and is most cost-effective for companies planning substantial, long-term U.S. presence. This model allows direct employment relationships, full control over HR policies and benefits design, and strengthens market credibility with customers and partners.

However, entity establishment requires significant upfront investment typically ranging from $15,000-$50,000 for legal fees, registration costs, and initial setup. The process takes 2-4 months on average and demands ongoing compliance expertise, dedicated HR resources, and administrative infrastructure.

Aspect	Details
Setup Time	2-4 months
Initial Investment	$15,000-$50,000
Best For	Long-term presence, 10+ employees
Control Level	Maximum
Compliance Responsibility	Full (employer bears all risk)

Engaging Contractors or Freelancers in United States

Engaging independent contractors provides flexibility for project-based work, specialized expertise, or variable workload without employment obligations. Contractors manage their own taxes, receive no benefits, and operate as separate businesses typically invoicing for services rendered. This model eliminates payroll tax obligations and reduces administrative overhead.

However, contractor relationships carry significant misclassification risks in the United States. The IRS, Department of Labor, and state agencies actively investigate contractor arrangements, applying strict control and relationship tests. Misclassification penalties include back taxes, benefits, overtime pay, and potential criminal charges.

Advantages: Flexibility, lower costs, access to specialized skills, no benefits obligations
Risks: Misclassification penalties, limited control, no loyalty or exclusivity expectations
Compliance Requirements: Issue Form 1099-NEC for payments over $600, ensure genuine business relationship
Warning Signs: Ongoing exclusive relationships, company-provided tools, set schedules, and detailed supervision indicate employment relationship

Hiring Employees Through an Employer of Record (EOR)

An Employer of Record provides a compliant middle ground between entity establishment and contractor engagement. The EOR serves as the legal employer handling all compliance, payroll, taxes, and benefits while the client company directs daily work activities and maintains operational control over employees.

EOR services enable companies to hire U.S. employees within days, test markets before committing to entity establishment, employ distributed teams across multiple states without registering in each jurisdiction, and access enterprise-grade benefits at group rates. This model is ideal for 1-20 employees, market testing, rapid expansion, or distributed hiring.

Deployment Speed: Hire employees within 3-5 days
Cost Structure: Monthly fee per employee ($400-$800) plus employee costs
Compliance Coverage: All federal and state requirements, multi-jurisdictional tax filing
Benefits Access: Group health insurance, 401(k) plans, workers’ compensation
Scalability: Easily add or reduce headcount without long-term commitments

A Step-by-Step Framework for Hiring Employees in United States

Successfully hiring employees in the United States requires a systematic approach addressing legal compliance, competitive positioning, and operational readiness. The process begins with selecting the appropriate hiring model based on expansion goals, followed by developing country-compliant employment documentation reflecting federal and state-specific requirements. Employers must establish robust payroll infrastructure capable of handling multi-jurisdictional tax withholding, implement comprehensive benefits programs meeting or exceeding market standards, and create ongoing HR compliance systems for recordkeeping, policy updates, and regulatory monitoring. Each step demands attention to detail as noncompliance carries substantial financial and legal risks. Following a structured framework ensures compliant hiring, protects against penalties, and positions employers as competitive talent destinations in the U.S. market.

Choose the Right Hiring Model for Your Business

Selecting the optimal hiring model requires evaluating your company’s expansion timeline, planned headcount, budget constraints, risk tolerance, and long-term U.S. strategy. Companies planning substantial operations with 20+ employees should consider establishing a local entity despite higher upfront costs for long-term efficiency.

Organizations testing the U.S. market, hiring 1-15 employees, or building distributed teams across multiple states benefit from EOR partnerships that provide immediate compliance without entity investment. Contractor arrangements work only for genuinely independent business relationships with substantial autonomy and limited integration into company operations.

Assessment Criteria: Expansion timeline, planned headcount, available budget, compliance expertise, growth projections
Entity Path: Best for 20+ employees, long-term commitment, substantial market investment
EOR Path: Ideal for market testing, rapid hiring, distributed teams, 1-20 employees
Hybrid Approach: Many companies use EOR initially, then transition to entity once reaching critical mass

Draft Country-Compliant Employment Contracts

Employment agreements in the United States must comply with federal and state-specific requirements while clearly defining the employment relationship, compensation terms, benefits, and termination provisions. While at-will employment is standard, written agreements protect both parties by documenting expectations and obligations.

Contracts should specify job title, responsibilities, compensation structure, benefits eligibility, work location, employment classification (exempt/non-exempt), confidentiality obligations, intellectual property assignment, and at-will employment status. State-specific provisions may include non-compete restrictions (limited or banned in California and other states), mandatory arbitration clauses, and specific termination notice requirements.

Essential Terms: Position, salary, benefits, work location, start date, at-will statement
State Variations: Non-compete enforceability, paid leave accrual, final paycheck timing
Compliance Requirements: Plain language, lawful provisions, no waiver of statutory rights
Legal Review: State-specific legal counsel should review templates for compliance

Set Up Payroll and Tax Compliance Systems

Establishing compliant payroll infrastructure requires registering with federal and state tax authorities, implementing withholding systems for income tax and FICA contributions, and ensuring accurate multi-jurisdictional tax calculations. Employers must obtain state unemployment insurance accounts, register with state revenue departments, and establish local tax accounts where applicable.

Payroll systems must accommodate varying state and local tax rates, track exempt vs. non-exempt status for overtime calculations, manage garnishments and deductions, generate compliant pay stubs, and maintain detailed records for audit purposes. Many employers partner with payroll service providers or professional employer organizations to ensure accuracy and compliance.

Federal Registration: EIN, EFTPS for tax payments, FICA withholding setup
State Requirements: Income tax withholding, unemployment insurance, disability insurance (where applicable)
Local Taxes: City or county income taxes in certain jurisdictions
Payroll Frequency: Varies by state; typical options include weekly, bi-weekly, semi-monthly
Recordkeeping: Maintain payroll records for minimum 3-7 years depending on requirement

Manage Benefits, Leave, and Ongoing HR Compliance

Ongoing HR compliance demands continuous monitoring of federal and state regulatory changes, maintaining accurate employee records, administering benefits programs, tracking leave entitlements, and ensuring workplace policies reflect current legal requirements. Employers must display required workplace posters, conduct anti-discrimination and safety training, maintain OSHA compliance, and process leave requests under FMLA and state-specific programs.

Benefits administration includes managing health insurance enrollments, processing 401(k) contributions, handling COBRA continuation coverage, and coordinating workers’ compensation claims. HR systems should track certification expirations, training completions, performance reviews, and disciplinary actions to support compliant management practices.

Benefits Enrollment: Coordinate open enrollment, life event changes, COBRA notifications
Leave Tracking: Monitor FMLA, state paid leave, sick time accruals, vacation balances
Compliance Training: Anti-harassment, safety protocols, data privacy, industry-specific requirements
Policy Updates: Regular review and revision reflecting legal changes
Audit Readiness: Maintain organized records for potential DOL, IRS, or state investigations

How Can an Employer of Record (EOR) Support Your Hiring in United States?

An Employer of Record provides comprehensive employment infrastructure enabling companies to hire U.S. employees without establishing local entities. The EOR assumes legal employer responsibilities including compliance, payroll processing, tax administration, benefits provision, and regulatory filings while the client company retains operational control over work assignments and performance management. This partnership model accelerates market entry, reduces administrative burden, mitigates compliance risks, and provides access to enterprise-grade benefits at group rates. EOR services are particularly valuable for companies testing the U.S. market, hiring distributed teams across multiple states, or lacking local HR expertise. However, employers should carefully evaluate EOR providers for compliance capabilities, benefits quality, service responsiveness, and technology platforms supporting seamless employee experience.

Core Services Provided by EOR Providers in United States

Employer of Record providers in the United States manage the complete employment lifecycle from compliant onboarding through offboarding. Core services include executing employment contracts reflecting federal and state requirements, processing multi-jurisdictional payroll with accurate tax withholding, administering group health insurance and retirement benefits, managing workers’ compensation coverage, and handling unemployment claims.

EOR providers maintain compliance with changing regulations across all 50 states, file required tax returns and employment reports, respond to unemployment and wage verification requests, and maintain employment records meeting federal and state retention requirements. Most EORs provide dedicated support teams, employee self-service portals, and integration capabilities with client HRIS or time-tracking systems.

Payroll Processing: Multi-state tax calculation, direct deposit, pay stub generation, year-end W-2 forms
Benefits Administration: Health insurance, 401(k) plans, dental/vision, life insurance, FSA/HSA
Compliance Management: Federal and state labor law adherence, workplace posters, policy templates
Tax Administration: Federal, state, and local tax withholding, filing, and remittance
Risk Management: Workers’ compensation, unemployment insurance, employment practices liability

Common Limitations of Generic EOR Platforms

Many generic EOR platforms struggle with the complexity of U.S. multi-jurisdictional compliance, offering standardized solutions that may not address state-specific nuances or industry requirements. Common limitations include inflexible benefits packages that don’t meet employee expectations, technology platforms lacking integration capabilities, limited support for specialized industries or roles, and inconsistent service quality as platforms scale rapidly.

Some EOR providers operate through co-employment or PEO models rather than true EOR relationships, creating potential compliance gaps and shared liability. Generic platforms may also lack local expertise for specific state regulations, provide limited customization of employment terms, or impose restrictive contract terms limiting client flexibility.

Compliance Gaps: Inadequate state-specific knowledge leading to violations
Limited Benefits: Substandard health plans or retirement options reducing competitiveness
Poor Technology: Clunky platforms without proper integrations or employee experience focus
Service Quality: Slow response times, lack of dedicated support, high staff turnover
Hidden Costs: Additional fees for multi-state hiring, benefits changes, or contract modifications

Why Asanify Is the Best Employer of Record Partner in United States

Asanify stands as the globally top-ranked Employer of Record platform according to G2 reviews, offering unmatched expertise in U.S. multi-jurisdictional compliance combined with superior technology and dedicated support. Unlike generic platforms, Asanify provides truly comprehensive state-specific compliance coverage, competitive benefits packages rivaling Fortune 500 offerings, and seamless integrations with leading HR and business systems.

Asanify’s U.S. solution handles the complexity of 50-state employment with sophisticated tax engines, automated regulatory updates, and compliance monitoring across federal, state, and local jurisdictions. The platform offers enterprise-grade health insurance options, 401(k) plans with competitive employer matching, and comprehensive workers’ compensation coverage while maintaining transparent, predictable pricing without hidden fees.

With dedicated account management, rapid response times, and an intuitive employee self-service platform, Asanify delivers exceptional experience for both clients and employees. The platform supports distributed hiring across all states, accommodates complex compensation structures, and provides strategic guidance for companies navigating U.S. employment complexities. Whether hiring a single employee to test the market or building distributed teams of 50+ across multiple states, Asanify provides the compliance assurance, operational efficiency, and employee experience quality that growing companies demand.

Frequently Asked Questions About Hiring in United States

How can companies hire employees in United States without setting up a local entity?

Companies can use an Employer of Record (EOR) service to hire U.S. employees without establishing a local entity. The EOR becomes the legal employer, handling all compliance, payroll, taxes, and benefits while the client company manages daily work activities. This approach enables rapid, compliant hiring across all 50 states within days rather than the months required for entity establishment.

What is an Employer of Record in United States and how does it work?

An Employer of Record (EOR) is a third-party organization that serves as the legal employer for workers while the client company maintains operational control. The EOR handles employment contracts, payroll processing, tax withholding and filing, benefits administration, compliance with federal and state labor laws, and all employment-related liability. The client company selects candidates, manages work assignments, and directs performance while the EOR manages the administrative and legal employment relationship.

Is using an EOR in United States legal and compliant?

Yes, using an Employer of Record is completely legal and compliant in the United States. EOR arrangements are recognized employment models that comply with federal and state labor laws, tax regulations, and employment standards. The EOR assumes full legal employer responsibilities and liability, ensuring compliance with all applicable regulations across the jurisdictions where employees work.

What are the employer payroll taxes in United States?

U.S. employers must pay 7.65% FICA taxes (6.2% Social Security on wages up to $160,200 and 1.45% Medicare on all wages), 0.6% effective FUTA unemployment tax on the first $7,000 of wages, and state unemployment insurance typically ranging from 0.5-10% depending on the state and employer’s claims history. Additionally, employers must secure workers’ compensation insurance, which varies by state, industry, and risk classification.

How much does it cost to hire an employee in United States?

The total cost of hiring an employee in the United States typically exceeds base salary by 25-40%. Beyond wages, employers incur mandatory payroll taxes (8-12% of salary), health insurance contributions ($7,000-$15,000 annually), retirement plan matching (3-6% if offered), workers’ compensation insurance (0.5-5%), and administrative costs. A $70,000 salary position typically costs employers $88,000-$98,000 in total annual compensation.

What employee benefits are mandatory under labour laws in United States?

Federal law mandates Social Security and Medicare contributions, unemployment insurance, workers’ compensation coverage, and unpaid FMLA leave (for eligible employees at companies with 50+ workers). Employers with 50+ full-time employees must offer affordable health insurance under the ACA. State requirements vary significantly, with some mandating paid sick leave, paid family leave, disability insurance, and retirement plans. No federal requirements exist for paid vacation, holidays, or parental leave.

Can startups use Employer of Record services in United States?

Yes, startups are ideal candidates for EOR services in the United States. EOR partnerships enable startups to hire talent quickly without entity setup costs, access competitive benefits packages typically available only to larger companies, maintain hiring flexibility as they test product-market fit, and ensure compliance without dedicated HR expertise. This approach allows startups to focus resources on growth rather than administrative infrastructure.

What are the risks of hiring contractors in United States?

Misclassifying employees as contractors carries severe risks in the United States including back payment of employment taxes with interest and penalties, retroactive payment of minimum wage and overtime, provision of missed benefits, potential criminal charges for willful violations, and employment tax assessments from IRS, Department of Labor, and state agencies. Companies must ensure contractors maintain genuine business independence with minimal control over work methods, schedules, and tools.

Hire Employees in United States the Smart and Compliant Way

Asanify enables you to hire, onboard, and manage employees in United States without setting up a local entity—ensuring full compliance with federal and state labor and tax laws.