How to hire and pay EMPLOYEES IN

The United States

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Before hiring

EMPLOYEES IN
The United States

Before hiring employees in the United States, there are some key things you’ll need to know. Firstly, there’s no legally-required notice period for termination in the US, and either party can end an employment contract at will for any lawful reason at any time. 

In the US, employment contracts are unusual for non-executives. Offer letters alone are enough to provide notice of job particulars. It’s also important to be aware that provisions like minimum wage, overtime rules and pay, and paid time vary by state. 

We know keeping track of all this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in the United States below.

At a Glance

CURRENCY

USD

OFFICIAL LANGUAGE

ENGLISH

PAYROLL FREQUENCY

WEEKLY, BI-WEEKLY, MONTHLY

PUBLIC HOLIDAYS

10

(based on region;
see here
)

EMPLOYER TAXES

10-15%

of gross salary

13th / 14th SALARY

N/A

Good to know

  • Provisions such as minimum wage, overtime rules and pay, and paid time vary by state.
  • There is no legally required notice period for termination in the US, and either party can end an employment contract at will for any lawful reason at any time. Parties can agree to a notice period by contract.
  • Employment contracts are unusual for non-executives.  Offer letters will suffice to provide notice of job particulars.

Employment in

The United States

Working hours and overtime

In the US, employees typically work 40 hours per week. 

Eligible employees are paid one and a half times their regular pay rate for all hours over 40 in a workweek. Some states require a higher compensation pay for work performed on the seventh consecutive day of work.

Employment contracts

Employment contracts are unusual for non-executives. Offer letters will suffice to provide notice of job particulars.

Probationary period

The standard probationary period is 90 days, but can vary depending on the agreement between an employer and employee. 

Pensions
Notice period

Employees are employed ‘at will’ and employers are not legally mandated to provide them with a formal notice period for termination. Therefore, either party can terminate the employment relationship with no notice, provided it is not for an unlawful reason. However, some employment agreements can specify a notice period.

IP protection and non-compete agreements

Employers' ability to enforce non-compete agreements varies from state to state.

Right now, no state law requires an employer to pay its former employees remuneration during the period of the non-compete agreement. However, some employers can choose to compensate their former employees for this with an amount that varies by state and position.

Employment cost calculator

Holidays

01 Jan

New Year's Day

04 Jul

Independence Day

18 Jan

Martin Luther King Jr. Day

06 Sep

Labor Day

15 Feb

President's Day

25 Nov

Thanksgiving

31 May

Memorial Day

25 Dec

Christmas Day

18 Jun

Juneteenth

31 Dec

New Year's Day (in lieu)

01 Jan

New Year's Day

18 Jan

Martin Luther King Jr. Day

15 Feb

President's Day

31 May

Memorial Day

18 Jun

Juneteenth

04 Jul

Independence Day

06 Sep

Labor Day

25 Nov

Thanksgiving

25 Dec

Christmas Day

31 Dec

New Year's Day (in lieu)

Employer tax

Employers in the United States are required to make social contributions of 10-15% for each employee’s salary. 

The breakdown is as follows:

  • FICA (Federal Insurance Contributions Act) Social Security: 6.20%
  • FICA Medicare: 1.45%
  • Additional Medicare Tax (for income above $200,000): 0.90%
  • FUTA (Federal Unemployment Tax Act): 6%
  • SUTA (State Unemployment Tax Act): Varies by state

Individual tax

Employees in the United States are taxed between 10% and 37% depending on their income bracket. Employees also make social security contributions totalling 13.65%.

Termination of employment

Severance pay is not legally mandated in the US and is typically a matter of agreement between an employer and an employee. When agreed upon, it can be included in employment contracts. Some employers choose to offer severance pay based on the employee’s length of service.

Start hiring employees in

The United States

Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.

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wherever they work in the world.

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