Employer of Record in the USA

Employer of Record in the USA

The USA is a desired destination for global employers because of its rich resources in technology, innovation, business, arts, and culture. Global employers can hire US professionals in two ways: first, set up a business entity, and second, you can use Employer of Record services

Suppose you are on a similar track, looking to hire USA professionals to grow your business. In that case, the blog will help you to understand employability in the USA and how an Employer of Record helps you in your hiring journey. 

What does an Employer of Record mean? Employer of Record is a service provider platform that helps global employers hire professionals beyond national borders. 

Further, the platform helps employers in payroll management, which means the service provider supports the employer in calculating compensation, benefits, and other perks, helps to pay the employees in the local currency, helps them in compliance with local labor laws, etc. 

Why do you need an EOR in the USA? 

Employer of Record is a service provider platform that assists you in hiring while managing compliance, complex labor laws, labor regulations, and many more. International employees are enriched with diverse skills and expertise in various domains, which help employers reduce operational costs and other expenses. 

There are many scenarios you will face in the USA during hiring employees, including: 

  • Your business entity setup will be complex 
  • Without a business entity hiring process will be complex and time-consuming 
  • You may face local labor laws and regulation issues 
  • When you don’t want HR professionals to take charge and take much of your time
  • You want to manage your employees with local salary and benefits 

The above stated scenarios are influential and help you to understand why you need an EOR in the USA

EOR cost in the USA

An Employer of Record in the USA charges differently. A few service providers go with fixed prices with one-time payment, and few of them charge % from employee’s salary. 

Once you approach the provider, you must check the payment option before going for the subscription. An Employer of Record in the USA charges approximately $500 to $1000, depending on the service provider and the kind of services you want. 

We, Global Squirrels, offer the EOR price starting at $199/ employee every month. You do not need to pay bloated markups or agency fees, only flat license fees per hire. 

Skilled resources in the USA 

The USA is enriched with talented, skilled, expert professionals from several domains. Global employers can hire the right talent using an EOR, saving time and cost. 

With an EOR, you also can bypass the complex hiring process. Global Squirrels, our EOR service, assists you in smooth hiring with a simple and easy process. 

Once you finalize candidates, Global Squirrels helps in payroll management so that you can pay your employees on time in the USA. 

Avoid risks of misclassification 

In the USA, there are Federal and State Labor Laws that employers must follow. Even the country’s Labor Minister classifies full-time and part-time employees and contractors clearly to avoid misclassification, as the law is strict if employers misclassify employees to contractors and attract hefty penalties and legal consequences. 

The list of legal aspects of employing in the USA

Payroll frequency: 

In the USA, every state has a different payroll frequency. But most of the states follow twice in a month which means USA employees receive two pay cheques in a single month. 

Minimum wage: 

The federal minimum wage is $7.25 per hour for covered nonexempt workers.

All states have minimum wage regulations. An employee is entitled to the larger of the two minimum wages in situations when they are covered by both state and federal minimum wage legislation.

Sick pay: 

Under the Family and Medical Leave (FMLA), employees need to qualify for the leave permit measures of twelve weeks unpaid sick leave. Employees are entitled to raise a request for leave for the following reasons: 

  • Childbirth of female employees 
  • Caring for newborn 
  • Adoption of kid
  • Sickness of immediate family members and employees needs to be taken care of
  • Prolong illness or severe injuries 

Employees to get sick leave must complete one year of employment tenure with the employer. 


Employer tax and Social security 

  • Employer tax: 21% corporate tax
  • VAT is different among states 

Social security 

6.2% + 6.2% of employee + employer contribution which include: 

  • 6.2% OASDI ( Old-Age, Survivors, and Disability Insurance) on annual earnings up to $168,600
  • 1.45% Medical care
  • 6% Federal Unemployment Tax on the first $7000 earned. Other unemployment taxes and the brackets depend on the states 
  • Additional social security varied from state to state

Employee tax

The USA follows a progressive tax structure at the State and Federal levels, and the tax charges are 10% to 37%. 

Social security 

Employees’ salary of 6.2%, which includes: 

  • 6.2% OASDI on annual earnings up to $168,6001.
  • 45% for Medical care 
  • Additionally, employees pay 0.9% on Medical care if their earnings exceed a certain level 

Onboarding and offboarding 

Notice period 

As per the Worker Adjustment and Retraining Notification Act (WARN), employees need to serve a 60-day notice period in certain cases. Otherwise, in the USA, there’s no notice period. A standard 2 weeks’ notice serves in case the post and designation are required. 

 Probation period 

A standard probation period in the USA is 90 days. However, there are shorter probation periods, 30 or 60 days, also served. Even lengthy periods exceed up to 6 to 12 months. 

Termination and severance pay of employees 

The termination is a willful act in the USA, which means employer and employee both can end the employment tenure at any time for any reason. However, the employer or employee cannot terminate the employment based on illegal reasons. 

Severance pay is paid for one week’s salary for each year, and it will include 10 years of service. Beyond 10 years of service tenure, employees get two weeks’ pay as severance. The calculation follows the most recent pay rate. 

Hire US professionals with Global Squirrels: A simple and easy-to-use solution 

To hire US professionals, an EOR provider would be beneficial to smooth the process. Global Squirrels, one of the leading EOR service providers, offers comprehensive assistance in global hiring and payroll services. 

The platform offers support, including finding the right candidates, compensation calculation, compliance, local labor law management, and many more. 

Want to know more? Schedule a demo with our team today. 


An Employer of Record helps you seamless hiring in the USA. The best part is you can save your precious time and money and get talented professionals for your team. Sign up with Global Squirrels and simplify your hiring journey in the USA.