Employer of Record USA

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The new ways in which the global market is gradually opening up, it has presented opportunities for employers to connect with the right candidates in the United States. However, it is a task that requires a US Employer of Record to take care of all the legalities and compliances.

We at Globalization Solutions offer an extensive range of corporate and employment solutions to help your business with global expansion. In addition to assisting you in streamlining your business expansion, we also help you with end-to-end recruitment solutions to deploy strategic sources for hiring and onboarding skilled and fresh professionals!

Hiring in the United States

The hiring process in the United States consists of certain common steps and selection processes. These sectors depend on the company and the methods it uses to find applicants for employment. However, most employers go for a formal process that includes recruitment and hiring of new employees consisting of several steps before hiring an applicant for the job position Applicants who respond to these are then invited for the interviews and other assessment methods.

The employers ensure to run a thorough background verification of the prospective candidates including their references, and this onboarding process is carried out by the U.S. Employer of Record. Further, this helps the employer to evaluate the information provided by the applicants during the recruitment process. Once the assessment is completed, the employer can decide which applicant will be offered the position.

One prominent thing about the recruitment industry in the United States is the diversity inclusion and cultural acceptance in the corporate sector. The Employer of Record USA follows a culture of recruiting a diverse workforce and openly welcomes applicants from all cultures, genders, races, religions, and geographies.

The Fair Labor Standards Act of 1938 States a federal minimum wage of $7.25 which can be higher in some States. The main intent behind this law is to discourage working over 40 hours a week through overtime pay as there are no Federal or state laws that require paid holidays for paid time-offs in the country.

Employment Contracts in the United States

In the US, there are no minimum requirements for an employment contract or written memorialization of any terms. Employment in the US is presumed to be terminable by either party with or without cause or notice. Therefore, most employees in the United States are employed on an at-will basis, and in some cases through an Employer of Record USA without any written employment contract. Moreover, American law does not limit the duration of the circumstances under which either party may enter a fixed-term employment contract.

  • Type of Contracts in the U.S - Under the US employment law, most companies usually do not enter into any kind of contract with most of their employees. However, the employers usually enter into employment on an at-will basis which is usually without the involvement of any prior written employment contract.

  • Working Hours in the U.S. - The normal working hours in the US are Monday to Friday from 9 a.m. to 5 p.m. which includes half an hour for lunch. While the standard workweek is 40 hours, part-time jobs require less than 40 hours per week. As per the Fair Labor Standard Act (FLSA) employees working more than a week are entitled to be paid one and half times their usual pay.

  • Public holidays in the U.S. - The United States follows a schedule of public holidays which is usually influenced by the schedule of federal holidays. It’s not mandatory for employers under the law to provide paid holidays to employees, but most employers do on a will basis.

    There are 10 federal holidays in the U.S.

    • New Year’s Day
    • Martin Luther King, Jr. Day
    • Presidents’ Day
    • Memorial Day
    • Independence Day
    • Labor Day
    • Columbus Day (celebrated in some places as Indigenous Peoples’ Day)
    • Veterans Day
    • Thanksgiving Day
    • Christmas Day

  • Bonuses - In the US, employers are legally responsible for paying bonuses promised to employees as compulsory incentives. However, these bonuses are completely discretionary and are not usually seen as implied contracts. Under the Fair Labor Standards Act, the bonus payments must be strictly included in the calculation of the worker's hourly rate when calculating overtime.

  • Probationary Period - In the US, the probationary period for an employee varies and entirely depends on the agreement between the employer and employee. However, there is a standard limit of 90 days probation period in the US, which means that it is important for a regular employee in the US to adhere to the at-will doctrine.

  • Termination and Severance - Most employers and employees usually agree on an at-will basis which means that either party can terminate the service with or without notice. However, proper communication of the same is compulsory on both sides.

United States Compensations & Benefits

As an integral part of human resource management, compensation and benefits are provided by a firm to its employees in exchange for their labor. Thus, it requires the assistance of the best US Employer of Record for the course of action. In the US, compensation usually covers wages and salaries, and the benefits cover all the indirect pay. Health insurance makes up a key component of the benefits, but it is dependent on who your employer is and what health care options are available.

  • US Compensation Law - The US compensation law covers several aspects such as salary, working hours, and overtime which are prescribed by the Fair Labor Standards Act (FLSA). The act requires employers to cover employees who cannot be otherwise exempted at least the federal minimum wage and overtime pay of 1.5 times the regular rate of pay. The labor standards provisions of the Immigration and Nationality Act are enforced by the wage and hour division that applies to entities authorized to work in the US under certain nonimmigrant visa programs. Usually, it is recommended to take assistance from an experienced Employer of Record USA to deal with such legalities. For more information, you can get in touch with us.

  • Guaranteed benefits - The section of Pension Benefit Guaranty Corporation (PBGC) that governs guaranteed benefits apply only to single employee plans. It guarantees the basic benefits an employee earns before the pension plan's termination date AAP to the legal limits set by congress. These benefits include pension benefits at normal retirement age, most early retirement benefits, annual benefits for survivors of clan participants, and disability benefits. All these legal procedures would certainly require assistance from the US Employer of Record for the purpose.

  • Maternity Leave - As for maternity leave in the US, the Family and Medical Leave Act provides up to 12 weeks of unpaid leave for the birth of a baby. Although some employers may provide extended and superior benefits to the employee, it can differ from when employer to the other. If the parent has pre-birth complications, she can also take part in the leave under the medical component.

  • Paternity Leave -  As for paternity leave, the fathers are not covered by any national paid leave policy. Unlike the mothers, the fathers are not eligible to enjoy paternity leave. However, under the Family and Medical Leave Act, paternity leave is unpaid and covers around 60% of Americans. Several States in the US (California, Massachusetts, Rhode Island, Washington, New York, New Jersey, Connecticut, and Oregon – and the District of Columbia) have introduced their own paid family leave policies including parental leave paid at a percentage of the employee's salary.

  • Probationary Period - In the US, the probationary period for an employee varies and entirely depends on the agreement between the employer and employee. However, there is a standard limit of 90 days probation period in the US, which means that it is important for a regular employee in the US to adhere to the at-will doctrine.

  • Annual Leaves - In the US, workers are not legally entitled to any paid holiday at all. However, depending upon the employers, they can offer a paid holiday to their workers, but the number of days varies from employee to employer including an average paid holiday of 10 days each year.

  • Sick Leave - As for sick leaves, currently there are no federal legal requirements for the cases applicable. For corporate entities subject to the Family and Medical Leave Act, the law requires paid sick leave and provides up to 12 weeks of unpaid leave for certain medical situations for either the employee or a member of the employee's family. However, the employees can take FMLA to live only if they have worked for their employer for at least 12 months or at least 1250 hours over the previous 12 months, or 50 employees are employed by the employer within 75 miles. In all situations as stated otherwise the employee is not eligible for sick leaves.

As your employer of record in the United States, we make sure to abide by all legal obligations and provide you with all insights about employee compensation to help you to make a competitive employment offer.

Taxes in the United States

Depending on the requirements and scale of business operations, there are several rules and regulations for taxation in the USA. The state payroll tax and federal tax include several categories for taxation such as corporate tax, social security tax, sales tax, and Medicare costs. As for the corporate tax, the United States imposes a tax on the profits of corporates at a rate of 21% which has been reduced from 35 % by the 2017 Cuts and Jobs Act.

Since the US follows a progressive tax system, which means that as you move up to the pay scale you also go up with it. The government has provided 7 tax brackets for the most ordinary income depending on your taxable income and filing status. Major tax brackets are - 10%, 12%, 22%, 24%, 32%, 35% and 37%. Currently, there is no national sales tax in the US and therefore no standard rate for the same. Usually, the sales tax rates differ by state ranging from 2.9 to 7.25% at the state level.

Payroll Deductions and Contributions

It is a well-known fact that doing business in the United States can give you several advantages of a robust customer base and a significant depth of skilled workers in several industries and sectors. However, the employment and payroll regulations in the US are complex and significantly vary across all the states. When it comes to employment laws and considerations in the US, the Fair Labor Standards Act (FLSA) provides guidelines to employers about compensation and employment including payroll deductions.

Many states can establish more rigorous laws of their own but in most cases, the employers are required to follow the state laws instead of the ones set by the Fair Labor Standards Act. The federal government has set the national minimum wage at $7.25 per hour as of the latest records. However, there is no maximum working week defined by the act, but all work above 40 hours a week is mandated to be paid at a minimum of 150% of the worker's regular rate.

Moreover, the taxes covered under Federal Insurance Contributions Act consists of the survivors, old age, and disability insurance taxes (social security tax), and the hospital insurance tax (Medicare tax) for which different rates are applicable.

Rates for social security and Medicare withholding

In the US, the current tax rate for social security is 6.2 % for the employer while it is 6.2 % for the employee. As for Medicare, it is 1.45% for the employer and employee, 2.9% in total.

Medicare tax withholding rate

Additional Medicare tax supplies to the Medicare wages of a person exceeding the threshold amount depending on the filing status of the taxpayer. It is the responsibility of employers to keep a withholding of 0.9 % for additional Medicare tax applicable on a person's wages paid in case it exceeds $200,000 in a regular calendar year without referring to the status filing. The employee is required to start with upholding additional Medicare tax in the period in which the wages exceed the required amount to an employee and continue to hold it with each pay period until the calendar year ends.

US Employer of Record Features and Benefits for the Employer

Employers are often in charge of all legal elements of their worker’s employment. This procedure will likely be more time-consuming if you are in a new nation.

At Globalization Solutions, we have a wealth of knowledge and expertise dealing with the payroll and tax systems in the United States, as well as other local rules and regulations. We can assist you with a variety of tasks.

  • A solution that is specifically designed to meet the demands and future ambitions of your firm.
  • Local professionals can provide you with all of the information you need about the US market.
  • Offering EOR best practices in the areas of taxation, agreements, costs, and social security benefits
  • Hiring with lightning speed and with efficiency
  • Start your operations within days.

US Employer of Record Features and Benefits for the Employee

Your company's most important asset is its employees. They are responsible for keeping the motivation up, and it is thus critical to develop a solid agreement that is acceptable to both the employees and the employer.

Globalization Solutions as your US Employer of Record is responsible for ensuring that your workers are satisfied with the terms of the employment contract. A wide range of excellent perks as well as a dependable and legally acceptable hiring process are available because of our extensive network and team of professionals. We will see to it that they have a good time by providing them with:

  • Quick and clear onboarding.
  • A written employment contract that complies with local laws and requirements.
  • A monthly payment that is agreed upon and paid on time.
  • Great benefits such as pensions and insurance.
  • The presence of a frequent point of contact
  • Details and counseling on changes in local rules that are up to date are provided

Why Globalization Solutions?

If you're a business owner looking forward to expanding your business to the US, undergoing all the processes and expenses to solidify the whole setup is not the only option! We at Globalization Solutions are here to help you in getting started with your business operations in the US with our comprehensive employment solutions.

We are a team of proficient expansion and proliferation experts, so we can efficiently accelerate the expansion of your business into the U.S. market. Be it your requirement for dealing with employee taxes, visa application benefits, insurance sponsorship applications for other transactions, we are here as your United States Employer of Record at your service

Contact us today to expand the horizons of your business's successful reach across the US markets