Employment Law

U.S. Employment Contract

It is important for U.S. employers to provide all employees with a written employment contract that includes all relevant details of the working relationship, such as sick leave, vacation time, compensation, etc. The contract should be written in English and in the local currency, US dollars. Oral contracts can technically also be legally binding, but problems can arise in practice so it is better to use a formal written contract.

Fixed Term

Indefinite

U.S. Working Hours

Normal working hours in the United States are 40 hours per week and 8 hours per day, but working hours vary by position. When employees work more than 40 hours, most people are legally entitled to overtime pay of at least 150% of their regular wages. Some employees are exempt from the maximum working hours limit and this exemption should always be included in their individual employment contract.

Holiday Policy

Vacation in United States

Employees in the United States are not legally entitled to standard leave. Most employers do offer some paid time off benefits, but this varies widely from employer to employer, from role to role, and overall is still significantly lower than most other countries in the world.

Because of America's dedicated work culture, many employees don't receive their full stipend, even if they receive it.

American Sick Leave

As a standard, U.S. employees are not entitled to any paid sick leave. However, the Family and Medical Leave Act (FMLA) does provide that most employees are entitled to up to 12 weeks of unpaid sick leave per year. In addition, most employers choose to provide paid sick leave benefits to their employees as part of their benefits package. Additionally, some state-level regulations do entitle employers to paid sick leave, so it's important to understand local laws when employed in the United States.

Maternity and Paternity Leave in the United States

Unlike most countries, employees in the United States do not have standard access to paid parental leave. However, some states do have mandates to provide paid parental leave, and many employers choose to offer it as part of their benefits package. Additionally, FMLA does provide 12 weeks of unpaid leave to all employees in the United States.

Employee Severance Pay and Termination in the United States

U.S. laws regarding termination and severance rights differ from those in most countries. Most states adhere to the concept of "at-will employment," which means that employees can be fired at any time for almost any reason (except for reasons such as race, gender, or religion). Employees can also leave for any reason without giving notice.

Severance pay is not required, but some employers do offer it as part of a benefits package. Some employees may be entitled to be paid when they lose their job, but it's not their fault. They also temporarily retain employer-related health insurance after losing their jobs.

Working with our US PEO, Horizon's team of local experts can provide assistance in drafting strong employment contracts that comply with local regulations.

U.S. Taxes

Employers and employees in the United States need to pay into different funds, with a Social Security tax of 6.2% of wages and a Medicare tax of 1.45% respectively. In addition, employers are required to pay unemployment taxes on each employee.

Employees in the United States are taxed progressively, so the higher the income level, the more taxes they pay. Tax rates range from 10% to 37%. Rates also depend on whether the payer is single, married, or the head of household. Employers are not required to withhold taxes, but some choose to do so.

Businesses are taxed at the federal level, but different states also charge different rates, so you'll need to know the specific laws in your area.

Health Insurance in USA

Employers are not legally required to provide private health insurance, but nearly all do, and they can be penalized by the government for not doing so. The United States does not have nationalized health care, so most employees rely on their employer to provide some or all of their health insurance, which is an important component of most benefit plans.

Salary and Benefits

U.S. Compensation Law

The U.S. minimum wage is set federally, but some states also have their own higher levels. The federal minimum is $7.25 per hour.

Welfare Administration in the United States

Benefits are especially important in the United States, where many employees rely on them to provide health care, sick leave, and more. This makes them a deciding factor for many when choosing their next role. But setting up a benefits system in the United States as a foreign organization can be a difficult process, with many different legal and administrative procedures that can cause delays.

One effective solution is to outsource your US benefits administration to Horizon Benefits Experts. Our team will ensure your benefits system is set up quickly and compliantly so you can focus on rapid, successful expansion. Remoly USA PEO can provide expert guidance to help streamline the process of expanding into the United States.