Now that you've made the decision to enter the U.S. market, your company can start the hiring process that will allow it to thrive there. There is only one catch: you need to set up a U.S. branch or subsidiary first. In such a situation, you may count on Globalization Partners' PEO services for full support.
We will act as the "employer of record" for your U.S. employees, taking care of their hiring, onboarding, payroll, and benefits in accordance with all relevant federal, state, and local laws and regulations. Our PEO services will help your company comply with regulations and reduce intergroup tensions.
The United States' business regulations are significantly different from those of other countries. When it comes to labor and tax laws, both the federal and state governments have a say. The requirements for a post in Pennsylvania, for instance, may vary somewhat from those in California. We're here to assist you navigate the complexities of American law and get your company off to a good start. Learn more about the American way of doing business and the employment laws that influence international firms in the United States.
People are being sought out in the United States
The contemporary American workplace has seen a number of changes. Union participation among working Americans was high a decade ago. Yet, union membership among workers aged 16 and older in the United States has fallen from 20.1% to 10.5% during the last two decades. Union membership has been declining over the last several decades despite strong popular support for unions and purported support for workers' rights to organize.
New generations of employees have brought about changes in the workplace. The "millennial generation," or those in their twenties and thirties, are now the backbone of the American workforce. Several surveys and studies have shown that today's young adults are more likely to change jobs than previous generations. The younger generation also has less loyalty to their employer than older generations. U.S. businesses that are actively hiring should pay close attention to the needs and wants of millennial candidates, as well as the factors that make a job attractive to this generation.
In the United States, the method of scouting and hiring new workers has also evolved in recent years. Several companies now routinely deploy internal promotions and external hires. Around 90% of all job vacancies in the 1970s were filled by internal promotions or lateral job transitions. In the twenty-first century, present workers occupy one of three open positions.
In the United States, companies that wish to hire new employees must be prepared to bargain with their prospective hires. Prospective employees should investigate typical salary levels in their sector before taking a position. One such resource is the Occupational Outlook Handbook, published by the Bureau of Labor Statistics, which includes salary and employment growth projections for hundreds of different fields of work. Applicants in the United States are more likely to be honest about their desired salary and other terms of employment, such as benefits and vacation time, because of the open nature of the labor market.
Contracts of employment in the United States are enforceable legal agreements between an employer and employee.
Legal Aspects of U.S. Employment Contracts
Employers and employees in the United States have an "at-will" relationship. An "at-will" employee is one who may resign at any moment for any reason. It also suggests that a firm has the right to terminate an employee at any time and for any reason. It's important to note that "for any reason" can't be used in every situation where an employer is liable to legal action. An employer cannot fire an employee on the basis of their gender, color, religion, age, sexual orientation, mental or physical handicap, or national origin, all of which are protected by the Equal Opportunity Employment Act. A person in Montana is the only state where they have no protections against being dismissed without cause. Every termination of employment in Montana must have a valid cause.
Although "at-will" employment is the norm in the United States, some workers have legally binding contracts outlining the parameters of their employment. Employees who sign contracts with their employers may be able to negotiate benefits like a no-cause termination policy. After that, the contract may outline the circumstances under which employment would be terminated.
Contracts in the United States may take on a wide variety of forms. While every possible contract is upheld by the law, some are easier to form than others. In certain situations, a legally binding contract is the best option for both the employer and employee. Details such as compensation, perks, and job tenure should all be laid out in a formal employment contract. The "at-will" status of an employee may be specified in a written agreement.
United States courts will respect both written and verbal agreements, but the party claiming violation must provide evidence. It may come down to accepting one side at their word when all that exists between an employer and employee is a verbal agreement.
Employment History in the U.S.
Workweeks of 40 hours or less are typical in the United States. The standard workweek for an American employee consists of 40 hours per week, split between eight hours per day, five days a week. In spite of this, there is a great deal of variety among jobs. Workers in this field often put in less than 40 hours each week. A worker who puts in more than 40 hours per week may be eligible for overtime pay.
If you work more than 40 hours in a week and are not exempt from overtime pay, you must be compensated at time and a half your regular rate of pay. By working overtime, an employee's base hourly rate goes from $20 to $30.
Workers who are considered exempt are not eligible for overtime compensation, regardless of how many hours they put in each week. Overtime pay is not always required of employees in some managerial, executive, administrative, creative, and professional positions. Salaries, rather than hourly wages, are the norm for exempt employees.
American holiday traditions
The United States government officially recognizes 10 different holidays each year.
January 1st, first day of the year
Thanksgiving Day celebrates Dr. Martin Luther King Jr.
Freedom Day, July 4th holidays in May and September
Day of Thanksgiving Armistice Day November 10th
Federal employees get paid time off throughout the Christmas season. Banks, post offices, and other businesses, as well as certain government offices, are closed on national holidays. Although private businesses aren't required by law to offer their employees holiday pay or time off on certain days, many nonetheless do so.
Vacation time in the USA during the holidays
While workers in other countries are happy to take anything from several weeks to a month off each year, Americans are notorious for not taking vacations. Possible cause: They don't get time off throughout their working years. Vacation pay is not required by law in the United States. Contrarily, this benefit is negotiated on a case-by-case basis between companies and their employees.
In most cases, workers who have access to paid vacation days don't take advantage of them. A recent survey found that 52 percent of working Americans were able to take paid vacation time before the end of the year.
Legislation such as the Family and Medical Leave Act and other similar statutes in the United States.
A Vacant American Medical System
In the U.S., corporations are not compelled to provide employees with paid sick time. Workers are eligible for up to 12 weeks of unpaid sick leave each year under the Family and Medical Leave Act (FMLA). Companies with more than 50 employees within a 75-mile radius are subject to the law. To qualify for FMLA leave, an employee must have worked for the company for at least 12 months and 1,250 hours.
While not mandated by law, many companies in the United States do provide their employees with paid sick days. In the United States, more than 75 percent of workers get sick pay. Paid sick days are more common in larger companies and the public sector. Some jurisdictions in the United States have passed laws requiring paid sick leave, despite the lack of similar laws at the federal level. Although in some states these rules would apply to both year-round and seasonal employees, in others they would only apply to the former.
Paid time off for American parents
According to the Family and Medical Leave Act (FMLA), an employee may take up to 12 weeks of unpaid leave to care for a newborn or adopted child if their employer has at least 50 employees within 75 miles and the individual has worked at least 1,250 hours in the previous 12 months.
The United States is unusual among industrialized countries in that it does not require employers to provide new parents with paid leave after the birth or adoption of a child. At least two months of paid leave is offered to new parents in the majority of the 41 countries examined. Many countries go above and beyond the standard by paying parents' salaries during the first two years of their child's life.
Despite the fact that federal law does not mandate paid parental leave for mothers or fathers, a small number of states in the United States have legislation forcing firms to offer such leave for their workers. Some companies even use it as a competitive tactic to attract and keep the best employees.
Healthcare coverage insurance in the USA
Systems of health insurance in the United States
Companies in the United States are not required by law to provide their employees with health insurance, but those that don't will be penalized under the Patient Protection and Affordable Care Act (ACA). Health insurance standards and regulations vary by organization size. It's important to note that businesses with more than 50 employees are subject to different rules than those with fewer.
As a result of the Affordable Care Act, small businesses were eligible for tax credits that helped offset the expense of offering health insurance to their workers.
Some Extra Benefits for the United States
Even though a certain benefit is not compelled by federal law in the United States, a company is free to provide it to its workers if they see fit. The firm may provide the following optional extras:
The term "bonus" refers to the additional sum of money a business gives to an employee on top of his or her normal wage. A commendation is a type of public acknowledgement given to an individual by their employer for outstanding work or for conquering remarkable challenges. In certain companies, the "employee of the month" is given a cash bonus. Holiday and end-of-year incentives are standard in many industries. It's possible that a worker's yearly bonus is tied to both their individual performance and the company's bottom line.
Incentives other than cash are not unheard of, although cash is the most popular. Some companies give employees bonuses or gifts for exceptional performance.
Separation or dismissal in the USA
A worker who is "at-will" in the United States is one who may be terminated at any time. While it is not required by law, not all employers will provide notice. There is no legal need for a departing employee to provide any specific notice, such as 30 days or two weeks.
Workers who are terminated "through no fault of their own," such as when employers are forced to lay off employees due to financial issues, may be eligible for unemployment compensation. A job seeker's efforts must be documented in order for them to get unemployment benefits. At an agreed-upon time period, the payments will cease.
Exiting employees who are still enrolled in their former employers' health insurance plans have some time before their coverage ends. According to the Consolidated Omnibus Budget Reconciliation Act, a former employee may continue to be covered by their employer's health plan for a certain time after leaving their position (COBRA). Their open enrollment period is longer, giving them more time to shop around for insurance on their own.
Some firms provide severance packages to employees who are laid off. Although severance pay isn't required by law, it's something employees might potentially negotiate for when they're hired.
Policies for Remitting Taxes in the United States
Every three months, businesses in the United States of America must calculate how much tax to withhold from their employees' paychecks and send that money to the appropriate government agency. Payroll deductions are used in the United States for a variety of purposes, including employee and employer contributions to Social Security and Medicare. Medicare tax is 1.45% and Social Security tax is 6.20%, both of which are paid by the employee and the employer. The business owner must additionally pay the federal unemployment tax on each employee's behalf.
U.S. employers are not required to deduct employees' federal income tax from paychecks, but many do so voluntarily. Depending on where your place of work is situated, you may additionally have to pay state and local income taxes. Globalization Partners offers services to assist businesses comply with U.S. tax laws, such as determining how much money to withdraw from each employee's paycheck.
Globalization Partners is an option to explore while searching for a PEO in the United States.
If your company is looking to expand into the American market, opening a subsidiary or branch office there is not mandatory. The PEO services offered by Globalization Partners also include assistance with recruiting U.S.-based employees. We'll handle all the administrative details for you so that you can start working in the US right away, including payroll, onboarding, recruiting, and benefits.
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