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USA – Employer of Record

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Introduction – United States of America

Capital –  Washington D.C.
Currency –  US Dollars
GDP –  $22,700 Billion USD (2022)
People/Nationality- American
Language –  English
Major Religions–  Christianity
Population- estimated 334, 800 Million as of July 2022

USA is a transcontinental country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territories, and nine minor outlying islands. It is the third-largest country by both land and total area. The United States shares land borders with Canada to the north and with Mexico to the south as well as maritime borders with the Bahamas, Cuba, and Russia, among others. With more than 331 million people, it is the third most populous country in the world. The national capital is Washington, D.C., and the most populous city and financial centre is New York City.

The United States is a highly developed country, and its economy accounts for approximately a quarter of global GDP and is the world’s largest by GDP at market exchange rates. By value, the United States is the world’s largest importer and second-largest exporter. Although it accounts for just over 4.2% of the world’s total population, the U.S. holds over 30% of the total wealth in the world, the largest share held by any country. Making up more than a third of global military spending, it is the foremost military power in the world and a leading political, cultural, and scientific force.

Contract of Employment

Under the laws of the United States, there are no minimum requirements for an employment contract. Also, in most states, no written memorialization of any terms is required. An employment relationship in the United States is presumed to be “at-will,” i.e., terminable by either party, with or without cause or notice.

Probation Period

No legal provision governs a formal “trial period.” However, some employers prefer from a business perspective, to have an internal policy on trial periods, often referred to as “introductory periods” or “probationary periods”, which generally provide for a formal performance evaluation after an initial stated period of employment (ninety 90 days). From a legal perspective, there is no real advantage to having a trial or probationary period; but there is a potential downside to it, if it causes confusion regarding the employee’s at-will status.


No legal provision governs fixed or unlimited term contracts. Unlike many other countries, American law does not limit the duration of a fixed-term employment contract or the circumstances under which the parties may enter into a fixed-term employment contract. In the absence of an employment contract, employment relationships are presumed to be “at-will,” terminable by either party at any time, with or without cause.

Except in certain mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal “notice period” to terminate an individual employment relationship. Most employees are employed “at-will” and either party can terminate the employment relationship without notice. Under the Worker Adjustment and Retraining Notification Act (“WARN Act”), employers must give 60 days’ advance notice to affected employees in advance of plant closings or covered mass layoffs.

Working Hours

The traditional American business hours are 9:00 a.m. to 5:00 p.m., Monday to Friday, representing a workweek of five eight-hour days comprising 40 hours in total.


On a work week basis, this act requires employers to pay a wage of 1 1/2 times an employee’s normal pay rate after that employee has completed 40 hours of work for workers 16 and over. Weekend or night work does not apply for overtime pay unless it is over the mandated 40 hours.

Annual Leave

US workers are not legally entitled to any paid holiday at all. However, most US employers offer paid vacation time to their workers. The number of days varies from employer to employer, but on average, US workers receive around ten days of paid holiday each year.

Sick leave

The federal Family and Medical Leave Act (FMLA) requires eligible employers to provide certain workers unpaid family leave; however, unlike nearly all other industrialized nations, the U.S. does not have national standards on paid family or sick leave, despite strong public support.

Maternity Leave

Paid parental leave under FEPLA is limited to 12 work weeks and may be used during the 12-month period beginning on the date of the birth or placement involved.  Within these 12 work weeks, paid parental leave is available if an employee has a continuing parental role with the child whose birth or placement was the basis for the leave entitlement.

Under FEPLA, an employee may not use any paid parental leave unless the employee agrees in writing, before commencement of the leave, to subsequently work for the applicable employing agency for at least 12 weeks.  This 12-week work obligation begins on the employee’s first scheduled workday after such paid parental leave concludes.


There is no federal sales tax system within the United States. Instead, indirect taxes like the GST tax or excise tax are imposed on a state-by-state basis. Each state has the constitutional right to impose its own sales tax, and this is broken down even further into city and county-wide tax regulations.

There is no national sales tax in the US and therefore, no standard rate. The sales or use tax rates vary by state, ranging from 2.9% to 7.5% at the state level. In addition to the state rate, local governments in 35 states impose an additional sales or use tax, ranging from 1% to 5%.

Income Tax

The United States has a progressive tax system, meaning people with higher taxable incomes pay higher federal income tax rates.

Tax rate Income Bracket
10% $0 to $19,900
12% $19,901 to $81,050
22% $81,051 to $172,750
24% $172,751 to $329,850
32% $164,926 to $209,425
35% $209,426 to $523,600
37% $523,601 or more

Employer/Employee Contributions

As of March 2022, the tax rate for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total. Combined, the FICA tax rate is 15.3% of the employee’s wages.

Public Holidays

There are 11 public holidays in USA:

New Year’s Day January 1
Martin Luther King Day 3rd Monday in January
Washington’s Day 3rd Monday in February
Memorial Day Last Monday in May
Juneteenth June 20th
Independence Day July 4th
Labour Day 1st Monday in September
Columbus Day 2nd Monday in October
Veterans Day November 11th
Thanksgiving Day 4th Thursday in November
Christmas Day December 25th

Severance Pay

One week’s pay (most recent rate) for each year of service up to and including 10 years, plus two weeks’ pay (most recent rate) for each full year of service over 10. Typical severance packages offer one to two weeks of paid salary per year worked. Continuation of insurance benefits, assistance finding another job, and other perks can be negotiated. You usually have 21 days to accept a severance agreement, and once it’s signed–seven days to change your mind.

Work and Residence Permits (Expatriates)

Generally, there are three options to consider when applying for an employment in the US- obtaining labour certification, filing an immigrant petition, or applying for permanent residency.

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