The United States of America (US or USA) is a country in North America consisting of 50 states, a federal district, 5 major unincorporated territories, 9 minor outlying islands, and 326 Indian reservations with limited sovereignty. The country is bordered by Mexico and Canada, and has the largest GDP in the world.

The United States is a melting pot of cultures and ethnicities, and its population has been profoundly shaped by its centuries of immigration from other countries. Federal employment regulations in the U.S. are numerous, and include anti-discrimination laws, as well as laws governing employee rights, hiring processes, leave, wages, working conditions, and many more.

Types of Contracts

• Full Time Employee
• Part Time
• Fixed term
• Hourly rates

Job Title Restrictions

There are no restrictions on job titles that we can hire in the United States.

Working Hours

Standard working hours in the US are 40 hours a week, 8 hours per day to qualify as a full-time employee.

Overtime is managed based on the employee’s exempt vs non-exempt classification.

Minimum Wage

The federal minimum wage for non-exempt workers in the US is USD 7.25 per hour - however the minimum wage requirements vary by state.

The minimum wage for employees who receive tips is USD 2.13 per hour. The amount of tips plus the USD 2.13 must reach at least USD 7.25 per hour. If not, your employer must pay to make up the difference.

For minimum wage rates by state - see here (and here for tipped workers).

Wage Deductions

In general, withholding authorizations are required for any deductions - this applies to, for example, negative paid time off (PTO) balance, return of equipment, etc.

If an employee has a negative PTO balance, they must sign a withholding to allow deductions from the final if the employee is terminated or quits.

Note that the salary cannot drop below minimum wage via these deductions, so deductions would be capped if they reached this level.

Probation Period

The US is one of the few countries with at-will employment. At-will means that the employer or the employee can terminate employment at any time, with or without cause.

At-will employment means either party can terminate without cause — but a contractual notice period binds both parties if agreed in writing. An employee who leaves without honouring a contractual notice period may be in breach of contract, and the employer may have legal remedies depending on the state. Notice period clauses are most commonly enforced in written employment agreements for senior or specialised roles.

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Taxes & Local Employment Costs

Employee Taxes

There are 4 basic taxes in the US, depending on the state:

• Federal taxes - varies by employee situation
• FICA Social Security: 6.2% of gross salary up to USD 176,100/year
• FICA Medicare: 1.45% of gross salary. n additional 0.9% Additional Medicare Tax applies to wages above USD 200,000/year (single filers) — employee only, no employer match.
• State taxes - varies by state and employee situation
• (E.g. Some states do not have state income tax, California & New Jersey, for example, have a disability fund. Some states have local taxes (e.g. city, county))

Certain visas allow Employees to be exempt from FICA taxes.

Employer Taxes & Contributions

Social Security

As with employee taxes, employer taxes vary depending on the state, city, etc.

Actual statutory employer payroll taxes in the US:

• Social Security (FICA): 6.2% on wages up to USD 176,100/year (2025 wage base)
• Medicare (FICA): 1.45% on all wages (no cap)
• FUTA (federal unemployment): 6% on first USD 7,000/year per employee — effective rate ~0.6% after state tax credits
• SUTA (state unemployment): varies by state and employer experience rating, typically 1–5%
• Total federal FICA employer cost: 7.65% of wages

Note: Remofirst's all-in employer cost rate covers these obligations plus benefits administration across all states — speak to your account manager for the current rate.

FUTA (Federal Unemployment Tax Act): 6% on the first USD 7,000 of each employee's annual wages. Employers who pay state unemployment taxes (SUTA) on time receive a credit of up to 5.4%, making the effective FUTA rate ~0.6% per employee per year (maximum ~USD 42/employee/year).

Pension (401K)

In this case, the employee makes a choice of what percentage of their salary to contribute for 401K - the employer cannot make this choice for the employee. Employer will always have to match employee contribution, but not more than 4% of gross salary:

• 3% ER matches 3%
• 4% ER matches 3.5%
• 5%+ ER matches 4%

Please note that the employer will match only if the employee contributes, so the employee can either accept or waive this benefit. The 401k match cannot be altered at all. The employee will become eligible to contribute 401K on the first day of the month after 90 days of employment.

In California, employers with 5+ employees are required to offer a workplace retirement savings program. This can be satisfied by a 401(k) or other qualified plan, or by enrolling employees in the state-run CalSavers program. A 401(k) is not specifically mandated.

Mandatory Medical Insurance

There is a mandatory amount of benefits the employer has to provide as we have more than 50 employees in the US. Please note that this is a minimal amount, and it is highly recommended to provide more so as to offer a competitive package to employees.

If the employee wants a plan outside of the employer’s budget, the employee can pay the difference themselves.

Annual Leave (Vacation)

There are no statutory requirements for annual leave (vacation days) in the US.

Sick Leave

More than 20 states and many cities now mandate paid sick leave, including California, New York, New Jersey, Massachusetts, Washington, Colorado, Oregon, Illinois, Connecticut, Maryland, Michigan, Minnesota, Nevada, Arizona, Vermont, and Rhode Island. Employers should verify requirements in every state where they have employees — accrual rates, caps, and permitted uses vary significantly.

Maternity Leave

There is no federal paid maternity leave. However, the Family and Medical Leave Act (FMLA) entitles eligible employees to 12 weeks of unpaid, job-protected leave for the birth or adoption of a child. FMLA applies to employers with 50+ employees; employees must have worked 12 months and 1,250 hours.

In addition, 14 states have enacted paid parental or family leave programs, including California (SDI/PFL up to 8 weeks at 60–70% wages), New York (PFL up to 12 weeks at 67% of state average weekly wage), New Jersey, Washington, Massachusetts, Colorado, Oregon, Connecticut, Delaware, Maryland, Minnesota, New Mexico, Rhode Island, and Vermont.

Paternity Leave

There is no federal paid paternity leave. The same FMLA entitlement (12 weeks unpaid, job-protected) applies equally to fathers and partners. State paid leave programs listed above cover both parents.

Public Holidays

There are 10 federal holidays in the US, however there is no statutory requirement to grant employees paid time off (some states do).

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Benefits

Summary

In the US, the most important benefit for employers to provide is medical insurance. Legally, any large employer (more than 50 employees) must provide “affordable, comprehensive” medical insurance under the Affordable Healthcare Act (ACA)’s Employer Mandate.

Other typical optional benefits include Dental, Vision, Life Insurance, Short Term Disability (STD) and Long-term Disability (LTD).

Medical Insurance

There is a mandatory amount of benefits the employer has to provide as we have more than 50 employees in the US. Please note that this is a minimal amount, and it is highly recommended to provide more so as to offer a competitive package to employees.

If the employee wants a plan outside of the employer’s budget, the employee can pay the difference themselves.

Notice Period

Notice periods, if desired, should be negotiated between the employee and employer as well as added to the contract.

It is possible to provide payment in lieu of notice (i.e. employment terminated effective immediately but paid out notice period amount).

Statutory Payments

Accrued vacation/PTO payout on termination is required in some states and prohibited from forfeiture in others:

• California: All accrued vacation must be paid out on termination. Use-it-or-lose-it policies are illegal in California.
• Colorado, Illinois, Montana, Nebraska, North Dakota: Accrued vacation must be paid on termination.
• Most other states: Employer policy governs — check your employee handbook.

Employers with California employees should ensure their PTO policy complies with California law regardless of where the company is headquartered.

Severance pay is not required in the United States, but some employers provide 1-2 months of pay for every year worked at the company.

Some states require that any amounts owed to the employee must be paid on the date of termination - not on the next available pay cycle.

Employers located outside of the US should be aware of the nuances of healthcare and employment benefits in the United States.