Employer of Record (EOR) in United States
Employer of Record (EOR) in United States enables companies to hire from one of the world’s largest and most skilled workforces without creating a local legal entity. The U.S. labor force exceeds 167 million people, offering expertise in technology, finance, healthcare, manufacturing, and creative industries. While the U.S. is attractive for its innovation-driven economy and diverse talent pool, navigating federal, state, and local employment laws can be complex. With EOR services, businesses manage payroll, benefits, and compliance effectively, while avoiding administrative burdens. This approach helps global organizations hire quickly and stay compliant in a highly regulated market.
About United States
The United States of America is the world’s largest economy, with a GDP exceeding $27 trillion. It consists of 50 states, each with its own laws, creating a unique and complex regulatory environment. With a population of more than 330 million, the U.S. is home to a highly diverse and educated workforce, driving global leadership in technology, finance, healthcare, aerospace, and innovation.
English is the primary business language, and the country is known for its strong infrastructure, advanced digital economy, and entrepreneurial ecosystem. Major business hubs like New York, San Francisco, Chicago, and Los Angeles attract global investment. The U.S. also provides access to leading universities and research institutions, making it a strategic destination for hiring top-tier talent.
Employment Terms and Regulations
Types of Contracts:
Employment-at-will (standard), fixed-term, part-time, and independent contractor agreements.
Job Titles:
Widely varied; common roles include engineers, developers, managers, analysts, and healthcare specialists.
Working Hours:
Typically 40 hours per week (8 hours per day). Overtime is paid at 1.5x after 40 hours.
Minimum Wage:
Federal minimum wage is $7.25/hour, but states often mandate higher rates (e.g., California $16/hour).
Probation Period:
Not mandatory; varies by employer policy.
Taxation and Contributions
Federal Income Tax:
Progressive rates from 10% to 37%.
Social Security:
Employer contributes 6.2% up to the annual wage base.
Medicare:
Employer contributes 1.45% of gross salary.
Federal Unemployment Tax (FUTA):
0.6% (after state credit, capped at $7,000).
State Taxes:
Vary by state (unemployment, disability, local taxes).
Types of Leave
Annual Leave:
No federal mandate; typically 10–15 days per year as employer policy.
Public Holidays:
Around 10 federal holidays, states may add more.
Sick Leave:
No federal requirement; many states require paid sick days.
Parental Leave:
Up to 12 weeks unpaid under FMLA (Family and Medical Leave Act); some states offer paid leave programs.
Employee Benefits
- Health insurance (often employer-sponsored).
- Retirement plans (401k with employer contributions).
- Paid time off (vacation, sick leave, holidays).
- Disability and life insurance.
- Performance bonuses and stock options (in many industries).
Termination Process
Most employment is at-will, allowing termination by either party without cause, provided anti-discrimination and notice laws are respected. Certain states have stricter rules, and layoffs may require WARN Act compliance for large employers.
Employer Taxes
Employers typically contribute around 7.65% for Social Security and Medicare, plus unemployment insurance and state-specific taxes. In total, employer taxes usually equal 10% – 12% of gross salary.
EMPLOYER TAXES
10% – 12% (Estimated)
FAQ's
How STM Manages Employment in India
Establishing an entity in every hiring location can be cost-prohibitive. STM simplifies the process by employing and paying your Indian talent on your behalf. We handle the intricate HR procedures and employment contracts in compliance with local laws. You can conveniently approve invoices through our platform. By partnering with an Employer of Record (EOR), you can efficiently and compliantly hire top talent globally.
Payment Processes for Indian Employees
We streamline payroll management for your Indian workforce. Employee hours, leaves, holidays, bonuses, and commissions are meticulously calculated. STM invoices you around the 15th of each month in your preferred currency, including US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), or Singapore Dollars (SGD). This ensures your Indian employees receive their salaries promptly in Indian Rupees (INR). Simplify further by consolidating your global team’s salaries into a single payment.
Full-time Employees vs. Global Contractors
Contractors engage with multiple companies and are self-employed, while full-time employees focus solely on their employer and receive additional benefits like health insurance, equity, and time off. While hiring international contractors can be cost-effective, it comes with misclassification risks. Partnering with an EOR for contractor onboarding and payments ensures compliant and timely compensation.
Reliable Employee Support
Our platform offers accessible support for employees and employers with inquiries about benefits, visas, and global employment in India. Utilize the chat function to connect with our expert team. Additionally, every STM client is assigned a dedicated account manager, serving as the primary contact for global HR assistance.
