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Global Expansion Guide

United States

Manage and pay your employees easily with BIPO in the United States and 170+ other markets. Build your international teams today with our global Employer of Record service! We’ll take care of the complexities.

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Currency

United States Dollar (USD)

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Language

English

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Capital

Washington, D.C. 

Employer of Record
United States

Employment Contract

Statutory Contributions

Minimum Wage

Public Holidays

Working Hours

Other Regulations

Probationary Period

Leave

Termination and Compensation

BIPO as your EOR Partner

Benefits of BIPO EOR Service in the United States

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Employer of Record United States

Embark on your business expansion in the United States with BIPO’s Employer of Record (EOR) services. Designed to assist you in navigating the intricacies of local employment laws and regulations, we can help ensure a smooth transition for your business and workforce.

As an Employer of Record (EOR), we act as your legal employment entity, streamlining the process of business expansion. Allowing businesses to focus on their core business operations while the EOR manages all aspects of compliance, payroll, HR, and employee benefits when venturing into the United States market. An EOR provider addresses the common challenges associated with local employment laws, payroll regulations, and work permit requirements.

This guide was last updated on 8 April 2025. The content in this guide is current as of this date and based on common business practices.

Employment Contract

  • Under the “at-will employment” principle, approximately 74% of employees in the United States are employed on an at-will basis.

  • In most states, there is no legal requirement for a written employment contract; typically, all general terms and conditions are outlined in the signed offer letter.

    • However, certain states — such as New York — require employers to provide employees with written notice of specific employment terms.

  • For high-skilled or highly compensated employees, such as executives, a formal written employment contract is strongly recommended.

    • These contracts should clearly set out general employment terms, including the position, job description, salary, allowances, performance incentives, and any stock or equity arrangements.
    • They should also include provisions on termination, specifying acceptable grounds for dismissal and severance arrangements in cases of termination without cause.

Statutory Contributions

In addition to the federal statutory benefits listed below, individual U.S. states may provide their own separate statutory benefits.

Item Detail Employer Contribution Employee Contribution
FICA – Social Security Tax Social security

6.2%

Taxable wages cap in 2025: USD 176,100

6.2%

Taxable wages cap in 2025: USD 176,100
FICA – Medicare Tax Medical benefits

1.45%

Annual wages USD 200,000

1.45%

Annual wages are less than or equal to USD 200,000
FICA – Additional Medical Tax Medical benefits –

0.9%

Annual wages are over USD 200,000
Federal Unemployment Tax Act (FUTA) Unemployment benefits 6%/0.6%, on the first USD 7,000 of each employee’s wages –
Total About 13.65% About 8.55%

Minimum Wage

The federal minimum wage in the United States is USD 7.25 per hour; however, each state and city may set its own minimum wage, which can be higher than the federal level.

Effective 1 January 2025, the minimum wage for federal subcontractors has been increased to USD 17.75 per hour.

Public Holidays

The public holidays listed below are national public holidays observed across the United States. Individual states and territories may observe additional public holidays. Please refer to official government announcements for the latest updates.

  • New Year’s Day
  • Birthday of Martin Luther King, Jr.
  • Washington’s Birthday
  • Memorial Day
  • Juneteenth National Independence Day
  • Independence Day
  • Labour Day
  • Columbus Day
  • Veterans Day
  • Thanksgiving Day
  • Christmas Day

Working Hours

Normal Working Hours

  • Under the Fair Labor Standards Act (FLSA), working hours are calculated on a workweek basis.
  • A workweek is a fixed, regularly recurring period of 168 hours (seven consecutive 24-hour periods) and does not need to align with the calendar week.
  • The workweek may begin on any day and at any hour.
  • Different workweeks can be established for different employees or groups of employees.
  • Averaging hours over two or more workweeks is generally not permitted.

Rest Time

  • The FLSA generally does not require breaks for employees (other than minors), whether paid or unpaid. It only specifies when breaks must be paid if offered at the employer’s discretion.
  • State and local laws may impose additional requirements for rest periods.
  • Employers are not required to pay for bona fide meal periods, which typically must last at least 30 minutes and completely relieve the employee from duty. Time spent eating at one’s desk or workstation must be counted as work hours.

Overtime

  • Non-exempt employees must receive overtime pay for hours worked over 40 in a workweek. Time off for leave, rest, holidays, or vacation is generally not included in the 40 hours.
  • There is no federal limit on the number of hours employees aged 16 and older may work in a week.
  • Overtime pay is not required for Saturdays, Sundays, holidays, or regular rest days unless overtime is actually worked on those days.

  • Overtime rate: At least time and one-half of the employee’s regular rate of pay.

Other Regulations

Federal law restricts the working hours of minors aged 14 and 15 as follows:

  • School day: Maximum 3 hours
  • Non-school day: Maximum 8 hours
  • School week: Maximum 18 hours
  • Non-school week: Maximum 40 Hours
  • Prohibited during regular school hours
  • Prohibited before 7 a.m.
  • Prohibited after 7 p.m.

Probationary Period

  • Under the at-will employment principle, most U.S. states do not impose legal requirements for a probationary period. Where state or local laws allow probationary periods, it should be clearly stated in a signed offer letter or employment contract.
  • The typical practice is a 30 – 90 day probation, though it can sometimes be extended up to one year for certain roles.

Leave

In addition to federal statutory leave listed below, employers must also comply with applicable state and local regulations.

Federal statutory leave in the United States includes:

Type Applicable to Details
Family and Medical Leave Act (FMLA)

Employees must meet the following criteria to qualify for FMLA leave:

  • Be employed by a covered employer.
  • Have worked at least 1,250 hours during the 12 months preceding the start of leave.
  • Work at a location where the employer has 50 or more employees within 75 miles.

  • Have been employed by the employer for 12 months. The 12 months do not need to be consecutive. Generally, only employment within the past seven years is counted, unless a break in service is:

    1. Due to the employee’s military obligations, or
    2. Governed by a collective bargaining agreement or other written agreement.

The FMLA applies to government agencies, public and private elementary and secondary schools, and any private-sector employer with 50 or more employees. Eligible employees are entitled to 12 workweeks of leave in a 12-month period for:

  • The birth of a child and to care for the newborn within one year of birth.
  • The placement of a child for adoption or foster care and to care for the newly placed child within one year of placement.
  • Caring for the employee’s spouse, child, or parent with a serious health condition.
  • The employee’s own serious health condition that makes them unable to perform the essential functions of their job.
  • Any qualifying exigency arising because the employee’s spouse, son, daughter, or parent is a covered military member on covered active duty.
  • 26 workweeks of leave during a single 12-month period to care for a covered servicemember with a serious injury or illness, if the eligible employee is the servicemember’s spouse, son, daughter, parent, or next of kin (military caregiver leave).

Termination and Compensation

Termination Notice

The United States (except for Montana) follows the “at-will” employment principle. Most states allow limited exceptions, but Florida, Alabama, Louisiana, Georgia, Nebraska, Maine, New York, and Rhode Island do not recognise any exceptions.

  • Individual Dismissal

    • Unless specified in an employment contract or collective bargaining agreement, there is no legal requirement for employers to follow a formal termination procedure when dismissing an individual.
    • Employees are protected from unfair dismissal only in cases of violations of federal, state, or local discrimination or retaliation laws.

  • Group Redundancy

    • U.S. law generally does not limit group redundancies. However, the Worker Adjustment and Retraining Notification (WARN) Act requires employers to provide 60 days’ notice of business closures or mass layoffs to:

      • Affected employees or their representatives (e.g., labour union)
      • Employees who will be laid off due to redundancy or business closure
      • Local government authorities

    • The WARN Act typically applies to employers with 100 or more employees. It does not apply to employees who:

      • Have worked for the employer less than 6 months in the past 12 months, or
      • Work fewer than 20 hours per week on average

Compensation

There is no federal legal requirement for severance or termination compensation in the United States. Any such obligations are determined by employment contracts, company policies, or state/local laws.

BIPO as your Employer of Record

BIPO’s total HR solutions include our award-winning HR Management System, Global Payroll Outsourcing, Employer of Record service, and Athena BI.

As your EOR partner, our services are designed to provide a comprehensive, hassle-free experience:

  • Initial Consultation: The journey typically begins with an in-depth discussion to understand your specific business needs, ensuring our EOR services perfectly align with your objectives.
  • Payroll Management: We offer a streamlined payroll system that ensures timely and accurate salary disbursement, complete with statutory deductions and contributions in full compliance with the United States’ regulations.
  • Contributions and Taxes: Our expertise in managing local social security requirements ensures your business complies with in-country financial obligations.
  • Compliance with Minimum Wage and Working Hours: We guarantee that your employment practices adhere to the United States minimum wage and working hours standards, safeguarding your business against potential legal issues.
  • Leave and Paid Time Off Management: Implement and manage leave policies that comply with United States laws, ensuring a fair and transparent leave management system for your employees.
  • Regulatory Compliance: Stay ahead of local labour laws and regulations with our up-to-date compliance services, minimising legal risks for your business.
  • Other services: Work visa, permit applications, termination procedures.
Services may vary across countries.

Benefits of BIPO Employer of Record Service in the United States

Unlock your growth potential with BIPO’s Employer of Record service in the United States. Our EOR service empowers businesses with seamless scalability while ensuring regulatory compliance.

From smooth onboarding to risk mitigation, BIPO handles the administrative HR tasks, enabling companies to concentrate on core business functions and accelerating growth. Our local expertise and global reach ensure efficient operations, enhancing flexibility and reducing operational complexities.

Stay up to date with the latest employment regulations.

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Frequently Asked Questions

An Employer of Record (EOR) is a partner company that acts as the official employer for your employees. 

An EOR company handles all the HR aspects and processes, including the legal complexities associated with regulatory and tax compliance.

As your EOR, BIPO supports your organisation by providing a comprehensive range of HR, payroll and advisory services to ensure your business stays compliant. These include end-to-end on/offboarding services for your employees (e.g.: payroll processing, HR and benefits administration, labour contracts, visa applications, payroll/tax compliance, and more).

By engaging BIPO as your EOR, your business benefits from: 

  • Compliance in the global markets where you operate
  • Reduced costs and risk mitigation
  • Overall workforce productivity, effectiveness, and efficiencies

A global EOR benefits organisations regardless of size or industry. It is especially useful for organisations that want to:

  • Scale their global business and be fully operational in foreign markets quickly
  • Reduce financial and HR complexities while expanding internationally
  • Minimise time spent trying to understand local labour laws and foreign tax systems
  • Stay compliant across global markets while reducing HR and administrative workflows
  • Benefit from a centralised and intuitive cloud HR platform to manage international teams

A global EOR enables businesses to fast-track their market entry into international market, and reduce the complexities of setting up multiple foreign entities.

When you partner with BIPO, we take on the the day-to-day administrative tasks, while you maintain full control of the business and delegate HR workflows and hiring needs.

Our vast network of business partners across 170+ markets globally supports your business expansion plans, with in-country HR experts providing localised support. Going global has never been easier!

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