The United States of America, abbreviated U.S. or U.S.A., is a country in North America, a federal republic of 50 states. The U.S. is the fourth largest country in the world in area (after Russia, Canada, and China). The country is the world’s greatest economic power, measured in terms of gross domestic product (GDP). Our platform also supports companies looking to hire employees in the United States or hire employees in the USA through compliant global hiring solutions.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in the United States of America.
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The United States of America, abbreviated U.S. or U.S.A., is a country in North America, a federal republic of 50 states. The U.S. is the fourth largest country in the world in area (after Russia, Canada, and China). The country is the world’s greatest economic power, measured in terms of gross domestic product (GDP). Our platform also supports companies looking to hire employees in the United States or hire employees in the USA through compliant global hiring solutions.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in the United States of America.
The national holidays mentioned below are valid for the year 2026 and are critical for hiring in United States planning:
The federal government institutions, banks, the postal service, and government offices are closed on federal holidays. While private employers are not required to follow suit, many do observe the same holidays, and either offer their employees paid time off for holidays or give them the option of taking those days off.
The holidays mentioned below are valid for the year 2026.
More information on holidays in the U.S. can be found on the USAGov website.
| January 1 | New Year’s Day | |
| January 19 | Martin Luther King Jr. Day | Movable -Third Monday of January |
| February 16 | President’s Day | Movable - Third Monday in February |
| May 25 | Memorial Day | Movable - Last Monday of May |
| June 19 | Juneteenth National Independence Day | |
| July 3 | Independence Day | |
| September 7 | Labor Day | Movable - First Monday in September |
| October 12 | Columbus Day | Movable- Second Monday in October |
| November 11 | Veterans Day | |
| November 26 | Thanksgiving | Movable - Fourth Thursday in November |
| December 25 | Christmas |
The approximate time for sharing the contract with an employee in the U.S. is 4 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.
NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.
4. The U.S. is one of the only countries in the world that does not provide paid parental leave or paid sick leave.
5. Health insurance coverage for employees working remotely across U.S. states is typically limited to the chosen plan’s network of “preferred” or “in-network” providers. Otherwise, an employee will pay the provider’s full rate or an out-of-network rate (if there is any out-of-network coverage at all in the plan) if they see a provider who is not considered “in-network.”
These considerations are essential for companies aiming to hire contractors in the USA or hire full-time employees through an Employer of Record United States service.
Social Security is a program run by the federal government. The program works by using taxes paid into a trust fund to provide benefits to people who are eligible. The employees need a Social Security number when they apply for a job. Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2% of wages up to the taxable maximum of $176,100 (in 2025).
There are four main types of benefits that the SSA (Social Security Agency) offers:
These regulations define standard USA working hours and overall working hours in the United States for global employers.
Exempt employees are not eligible for overtime, no matter how many hours they work a week. Employees who are exempt from overtime laws typically include those in managerial or executive positions, administrative positions, creative jobs, and professional positions.
Under the Fair Labor Standards Act (FLSA), non-exempt employees who work more than 40 hours during a single week need to be paid one and a half times their usual pay rate.
Generally, the probationary period for a U.S. employee varies and depends entirely on the arrangement agreed upon between the employer and the employee. However, a 30 to 90-day probationary period is standard in the U.S.
The FLSA has no requirement for notice to an employee prior to termination or lay-off. In some situations, the Worker Adjustment and Retraining Notification Act (“WARN Act”) provides for notice to workers prior to lay-off. Under the WARN Act, employers must give 60 days advance notice to affected employees in advance of plant closings or covered mass layoffs. Some states may have requirements for employee notification prior to termination or lay-off.
These regulations define standard USA working hours and overall working hours in the United States for global employers.
Exempt employees are not eligible for overtime, no matter how many hours they work a week. Employees who are exempt from overtime laws typically include those in managerial or executive positions, administrative positions, creative jobs, and professional positions.
Under the Fair Labor Standards Act (FLSA), non-exempt employees who work more than 40 hours during a single week need to be paid one and a half times their usual pay rate.
Generally, the probationary period for a U.S. employee varies and depends entirely on the arrangement agreed upon between the employer and the employee. However, a 30 to 90-day probationary period is standard in the U.S.
The FLSA has no requirement for notice to an employee prior to termination or lay-off. In some situations, the Worker Adjustment and Retraining Notification Act (“WARN Act”) provides for notice to workers prior to lay-off. Under the WARN Act, employers must give 60 days advance notice to affected employees in advance of plant closings or covered mass layoffs. Some states may have requirements for employee notification prior to termination or lay-off.
The Family and Medical Leave Act provides certain employees with up to 12 weeks of unpaid, job-protected leave per year. It also requires that their group health benefits be maintained during the leave. Several states have incorporated its tenets.
Social Security is a program run by the federal government. The program works by using taxes paid into a trust fund to provide benefits to people who are eligible. The employees need a Social Security number when they apply for a job. Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2% of wages up to the taxable maximum of $176,100 (in 2025).
There are four main types of benefits that the SSA (Social Security Agency) offers:
WorkMotion provides Employer of Record services through its own entity in the United States, giving you direct compliance accountability, not a third-party intermediary, from the moment your new hire signs their contract.
WorkMotion generates an employment agreement aligned with the employee’s state of residence.
US employment law operates at federal, state, and local levels, each with different rules for wages, taxes, benefits, and termination.
That means a contract for a hire in California requires different terms than one in Texas or New York.
WorkMotion’s platform produces state-specific employment agreements that reflect the applicable federal and state requirements, covering compensation, overtime classification, at-will employment language, and any state-mandated disclosures, without your legal team drafting from scratch.
Onboarding in the US requires I-9 verification, background checks, benefits enrollment, and setting up state tax accounts.
WorkMotion manages the I-9 employment eligibility verification process and handles new-hire reporting to the relevant state agency, a mandatory step that foreign employers frequently overlook.
Every new hire is reported within the state-required window, keeping WorkMotion and your company in good standing from day one.
Before the first paycheck can run, the employer of record must be registered with the IRS and with the relevant state tax authorities.
The EOR registers as an employer in the applicable state(s) and obtains necessary tax IDs.
WorkMotion handles federal Employer Identification Number (EIN) requirements and state payroll tax account registrations, including State Unemployment Insurance (SUI) accounts, so your hire can start on schedule rather than waiting on government processing timelines.
Employees in the United States are subject to various federal, state, and local taxes.
The primary taxes affecting employee compensation include federal income tax, FICA taxes (Social Security and Medicare), state income tax, and unemployment taxes.
WorkMotion calculates and remits all required withholdings each pay cycle:
Payroll runs on a biweekly or monthly schedule depending on state requirements and employee preference.
US employees expect competitive benefits, particularly health insurance, which employers typically cover 50–80% of premiums.
WorkMotion administers health insurance, retirement plan options, and other benefits through its own plans, ensuring your US hires receive a competitive package that supports retention without you building a separate benefits infrastructure.
While not federally mandated for small businesses, the Affordable Care Act requires employers with 50+ full-time employees to provide Minimum Essential Coverage.
WorkMotion monitors ACA thresholds and manages compliance as your US headcount grows.
Each of the 50 states has its own employment laws, tax rates, minimum wage, and benefits requirements.
WorkMotion tracks legislative changes at the federal, state, and local level, updating employment terms, payroll calculations, and benefit structures automatically when rules change.
This includes monitoring state-specific paid leave mandates, minimum wage adjustments, and new reporting obligations as they take effect.
For most companies making their first US hire, the question is not whether to comply. It’s how fast you need to move and how much overhead you want to carry. WorkMotion’s transparent per-employee pricing replaces the upfront formation costs and ongoing filing obligations of running your own entity.
| Factor | WorkMotion EOR | Own US Entity |
|---|---|---|
| Setup cost | Per-employee monthly fee; no formation costs | Estimated $2,000–$5,000+ in legal, filing, and registered agent fees before first payroll |
| Time to first hire | Days from signed contract to payroll enrollment | An estimated 6–10 weeks for a foreign-owned entity to reach first compliant payroll, driven by EIN issuance and state account activation |
| Ongoing legal exposure | WorkMotion carries employer-of-record liability; your company manages the work | Your entity is the legal employer, federal, state, and local compliance is your responsibility across every state where employees are based |
| Ongoing admin burden | WorkMotion handles payroll, tax filings, benefits, I-9, new-hire reporting, and compliance monitoring | Annual reports, franchise taxes, multi-state registrations, payroll provider management, benefits administration, and ongoing legal counsel |
| Exit flexibility | Scale down or exit a market without entity dissolution costs or ongoing filing obligations | Dissolving a US entity requires formal state filings, final tax returns, and registered agent termination, adding time and cost |
EOR fits companies hiring one to several US employees, testing a new market, or moving faster than entity setup allows.
A US entity typically becomes cost-effective at 5–10 employees, but the administrative burden of multi-state compliance, benefits administration, and tax filings means many foreign companies prefer EOR for larger teams.
If you’re planning a large, permanent US operation with employees across multiple states, entity setup is worth evaluating alongside EOR. WorkMotion’s team can help you model both paths.
Use WorkMotion’s Employment Cost Calculator to estimate the full cost of a US hire before you commit.
— PART 2 of 2 —
The US looks familiar to many European and DACH companies: shared language, recognizable business culture, well-known tech hubs.
That familiarity is exactly what causes compliance gaps. The rules are different in ways that aren’t obvious until something goes wrong.
In almost every US state, “at-will” employment is the default position, meaning either the employer or the employee may terminate the employment relationship at any time, for any reason or no reason, with or without notice.
Foreign employers from Germany or the Netherlands often assume this means termination is risk-free. It isn’t.
Federal and state anti-discrimination laws, the WARN Act, and state-specific “mini-WARN” statutes all constrain how and when terminations can happen. When terminating an employee, employers must adhere to federal, state, and city ordinances.
WorkMotion’s legal team reviews every offboarding situation to ensure the process is documented and defensible.
A single employment agreement does not cover the US. A single employee in California faces different requirements than one in Texas.
California imposes strict rules on overtime calculation, meal and rest breaks, final pay timing, and non-compete enforceability. New York has its own wage notice requirements. Oregon mandates paid family leave contributions.
WorkMotion generates state-specific contracts and updates them when state law changes, so your HR team doesn’t need to track 50 separate legislative calendars.
What differentiates US employment law from that of other countries is that the US has very few legally required benefits. Things that are legally required and commonplace in other countries, such as paid holiday, paid leave, and mandatory severance benefits, are generally not legally required in the United States.
This cuts both ways: the statutory floor is low, but market expectations are high.
US candidates expect health insurance, a 401(k) option, and competitive paid time off as standard. Offering only the legal minimum will cost you candidates.
WorkMotion provides access to competitive group benefits plans so your US hires receive packages that reflect market norms, not just statutory minimums.
Misclassifying employees as independent contractors can trigger liability for back taxes, penalties, and interest, as the IRS applies a three-category test to determine true worker status.
Many European companies default to contractor arrangements for US hires because they seem simpler.
The IRS and state labor agencies apply their own classification tests, and the consequences of getting it wrong include back-taxes, penalties, and potential litigation.
WorkMotion’s Contractor Management service includes mandatory misclassification checks before each onboarding, so you know the correct classification before the relationship begins.
Payroll in the US must account for various federal and state-level deductions, Social Security, Medicare, and unemployment insurance.
Each state where you have an employee requires its own payroll tax registration, unemployment insurance account, and, in some cases, workers’ compensation policy.
Foreign employers who skip these registrations face penalties from state revenue agencies, not just the IRS.
WorkMotion handles state-level registrations as part of the standard onboarding process, so nothing falls through the cracks when your first hire starts in a new state.
A B2B SaaS company headquartered in Berlin or Amsterdam wants to hire a VP of Sales and two senior engineers based in New York and Austin.
Setting up a US entity takes months they don’t have, and the overhead of multi-state compliance isn’t justified for three hires.
WorkMotion acts as the employer of record, generates state-specific contracts, runs payroll in USD, and administers benefits, so the company can onboard all three in days and focus on the product, not the paperwork.
A mid-sized German manufacturing or industrial software company is expanding into North America and needs a local sales lead and a customer success manager in the US before the next trade show.
They have no US entity and no timeline to build one.
WorkMotion provides EOR services in the United States through its own entity, handling employment contracts, payroll, and compliance from day one, giving the company a compliant US presence without a six-month incorporation project. Companies expanding across North America can pair this with EOR hiring in Canada through the same platform.
A fintech or green tech company with 80–200 employees operates fully remote across Europe and wants to extend that model into the US, hiring wherever the best candidates are, across multiple states.
WorkMotion manages multi-state compliance, benefits enrollment, and payroll across all US locations through a single platform, replacing the fragmented approach of managing separate state registrations and local payroll vendors.
A UK-based SaaS company or a Dutch e-commerce business wants to validate US demand before committing to a full entity setup.
They hire one or two US-based account executives through WorkMotion’s EOR service, run the market test over 12–18 months, and then decide whether to transition to direct employment.
WorkMotion’s Direct Hiring solution, available in European markets, supports that transition path for companies expanding in the other direction, and the same strategic logic applies: start with EOR, scale when the market justifies it.
You’ve found the right candidate. They’re based in California, Texas, or New York, and you need them to start next month.
WorkMotion operates through its own US entity, so there’s no third-party intermediary between your hire and compliant employment.
Contracts are generated to match the employee’s state of residence, payroll runs in USD, and WorkMotion handles every layer of federal, state, and local compliance, I-9 verification, tax registrations, benefits enrollment, and ongoing monitoring, so your team manages the work while WorkMotion carries the legal load.
For SMEs expanding into the US for the first time, or European and DACH companies building distributed teams across multiple states, EOR removes the single biggest barrier to moving fast: the months it takes to set up a US entity before you can make a single compliant hire.
In almost every US state, employment is at-will, meaning either party can end the relationship at any time without notice. But “at-will” isn’t a blank check: anti-discrimination statutes, the federal WARN Act, and state “mini-WARN” laws still constrain how and when you can terminate, and states like California require final wages on the employee’s last day. WorkMotion’s legal team reviews every offboarding to keep the process documented, compliant, and defensible.
Yes. WorkMotion operates through its own US entity, which means direct compliance accountability rather than a third-party partner arrangement. The legal employer carries liability for payroll tax filings, I-9 verification, benefits, and state registrations, so with WorkMotion there’s a single point of responsibility for every layer of US employment compliance.
US employers pay Social Security at 6.2% of wages up to the annual wage base, Medicare at 1.45% (plus an extra 0.9% on high earners, withheld from the employee), Federal Unemployment Tax (FUTA), and State Unemployment Insurance (SUI), which varies by state and experience rating. Each state where an employee is based also requires its own payroll tax registration and, often, a workers’ compensation policy. WorkMotion handles all federal and state registrations and remittances as part of standard onboarding.
A single contract doesn’t cover the US: a hire in California needs different terms than one in Texas or New York, covering overtime, breaks, paid leave, non-competes, and wage notices. WorkMotion generates state-specific agreements based on each employee’s state of residence and updates them automatically when the law changes, so your HR team doesn’t have to track 50 legislative calendars.
Very few. There’s no federally mandated paid vacation or severance, and health insurance is only required under the ACA for employers with 50+ full-time staff. In practice, though, US candidates expect health insurance, a 401(k) option, and competitive PTO as standard, so offering only the legal minimum costs you talent. WorkMotion provides group benefits plans that match US market norms and monitors ACA thresholds as you grow.
With WorkMotion’s EOR, a new hire can typically go from signed contract to payroll enrollment in days, because the entity is already registered and operational. Setting up your own foreign-owned US entity usually takes six to ten weeks before first payroll, driven by IRS EIN issuance and state account activation. For a hire who needs to start next month rather than next quarter, EOR removes the biggest delay.
Discover how WorkMotion helps you hire anywhere, stay compliant, and manage global teams with ease.
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