Employer of Record (EOR) in
United States
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Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in United States to stay compliant from day one.
Language(s)
Currency
Capital
Washington, D.C.
Population
349.0 M
Public holidays
11
VAT
N/A
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in United States to stay compliant from day one.
DEFAULT
Indefinite contract
The default and most common employment relationship in the US is 'at-will' employment: either the employer or employee may end the relationship at any time, for any lawful reason (or no reason), with or without notice, unless limited by a written contract, collective bargaining agreement, or applicable anti-discrimination/retaliation law. Employment is presumed indefinite (no fixed end date) unless the parties agree otherwise in writing.
Fixed-term contracts are legal and mainly used for specific projects, seasonal work, or specialized roles; they are less common than at-will indefinite employment. There is no federal cap on term length or renewals — the contract's own terms, and applicable state law, govern early termination and any conversion to indefinite status.
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in United States to stay compliant from day one.
The Fair Labor Standards Act (FLSA) does not cap the hours an adult employee may work in a week, but requires overtime pay of at least 1.5x the regular rate for non-exempt employees who work more than 40 hours in a workweek. Several states add daily-overtime or day-of-rest rules (e.g., California requires overtime after 8 hours in a day).
PROBATION PERIOD
60-90 days
The US has no statutory probationary period. Employers commonly use an introductory/probationary period of 60-90 days (sometimes up to 6 months) to evaluate new hires, but since employment is already at-will, this period creates no additional legal dismissal protections — it mainly affects internal timing, such as benefits eligibility or PTO accrual start.
13TH / 14TH SALARY
Not Required
There is no federal or state requirement for a 13th or 14th month salary in the United States. Year-end, holiday, or performance bonuses are discretionary and governed entirely by employer policy or individual contract.
JOB TITLE REGULATIONS
Regulated
There is no federal regulation of general job titles. Titles matter mainly for FLSA overtime-exemption classification (executive, administrative, professional, etc.) and for state/professional licensing in regulated fields (e.g., 'CPA', 'attorney', 'registered nurse'), rather than as a general statutory category.
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in United States to stay compliant from day one.
Employers pay FICA taxes matching the employee share: 6.2% Social Security (on wages up to the annual wage base, USD 184,500 in 2026) + 1.45% Medicare (uncapped) = 7.65% combined. In addition (not included in the 7.65% figure), employers pay FUTA (effective ~0.6% on the first USD 7,000 of wages per employee) and state unemployment insurance (SUTA) at state-specific rates, plus workers' compensation insurance premiums.
Employees pay matching FICA taxes withheld from gross pay: 6.2% Social Security (capped at the annual wage base, USD 184,500 in 2026) + 1.45% Medicare (uncapped) = 7.65% combined. High earners also owe an Additional Medicare Tax of 0.9% on wages above USD 200,000 (single filers) / USD 250,000 (married filing jointly), with no employer match. Federal and state income tax withholding are separate from FICA and vary by individual circumstances.
Tax rates, wage bases, and thresholds shown are for 2026 and are subject to annual adjustment by the IRS/SSA and to state and local law changes. This information is for general guidance only and does not constitute tax or legal advice; employers should consult a qualified tax advisor or payroll provider for current, jurisdiction-specific requirements.
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Type
Duration
Pay During Leave
Annual leave
Not mandated (typically 100% where offered)
Maternity leave
Unpaid (federal); 50-90% under state/local programs
Paternity leave
Unpaid (federal); 50-90% under state/local programs
Sick leave (days 1-3)
None federal; per state/local law or employer policy
None federal; per state/local law or employer policy
None federal; FMLA unpaid job protection up to 12 weeks/yr
Up to 12 weeks unpaid, job-protected leave per 12-month period for eligible employees at covered employers (own or family member's serious health condition, birth/adoption/foster placement); up to 26 weeks for military caregiver leave.
Family and Medical Leave (FMLA)
Varies by state; federal law bars termination for jury service but does not require pay. Most states require unpaid, job-protected leave; a few require limited paid leave for part of the service period.
Jury Duty Leave
No federal requirement; most (not all) states require employers to provide time off to vote, generally 1-3 hours, paid in some states and unpaid in others.
Voting Leave
No federal requirement; a small number of states (e.g., Oregon, California, Illinois) mandate unpaid or paid bereavement leave (typically around 3-5 days); otherwise entirely at employer discretion.
Bereavement Leave
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in United States to stay compliant from day one.
Statutory Benefits
In addition to statutory leave, employees are entitled to the following statutory benefits:
The US funds Social Security and Medicare through the Federal Insurance Contributions Act (FICA), split evenly between employer and employee.
- Social Security: 6.2% employer + 6.2% employee, on wages up to the annual wage base (USD 184,500 in 2026)
- Medicare: 1.45% employer + 1.45% employee, on all wages (no cap)
- Additional Medicare Tax: employee-only, 0.9% on wages above USD 200,000 (single) / USD 250,000 (married filing jointly), no employer match
- Self-employed individuals pay both halves (15.3% total) via SECA
Federal (FUTA) and state (SUTA) unemployment insurance are funded separately by employers and are not part of FICA.
WORKPLACE INJURY PROTECTION
Workers' compensation insurance is mandatory for nearly all employers in almost every US state (Texas is a notable exception, where private-employer coverage is largely elective), covering medical treatment and partial wage replacement for work-related injuries or illness.
- Funded entirely by the employer - employees do not contribute
- Premiums are set at the state level and vary by industry risk classification, claims history, and payroll size; there is no single national rate
- Administered via a state fund, private insurance, or employer self-insurance depending on the state
- Benefits typically include medical care and a portion of lost wages (often around two-thirds of average weekly wage, subject to state caps), plus death/disability benefits
Severance pay is not required by federal law.
- No general federal statute mandates severance upon termination, resignation, or layoff
- Severance is typically offered voluntarily, governed by an employment contract, company severance policy, or collective bargaining agreement
- The WARN Act does not itself mandate severance - it requires 60 days' advance notice (or pay in lieu) for qualifying mass layoffs/plant closings by employers with 100+ employees; failure to give notice can create liability for back pay/benefits for the notice period
- A handful of states/localities have their own severance or notice add-ons for specific situations (e.g., 'mini-WARN' laws in New York, New Jersey, and elsewhere)
A 13th (or 14th) month salary is not a legal requirement or common practice in the United States.
- No federal or state law mandates an extra month's pay
- Employers may offer discretionary year-end, holiday, or performance bonuses instead, entirely governed by company policy or individual agreement
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in United States to stay compliant from day one.
Unfair dismissal
The US does not follow a general 'unfair dismissal' framework. Under at-will employment (the default in every state except Montana, which limits at-will status after a defined probationary period), an employer may terminate an employee for any reason or no reason, as long as the reason is not illegal - i.e., not based on a protected characteristic (race, sex, age 40+, disability, religion, national origin, pregnancy, etc.) and not retaliation for protected activity (whistleblowing, filing a workers' comp claim, taking FMLA leave, union organizing, etc.).
Objective / fair dismissal
Not a legal requirement federally; employers generally do not need to show 'just cause' or an objective/fair reason for dismissal, outside Montana and outside union/CBA-covered or individually contracted employees. Employers remain barred from discriminatory or retaliatory terminations under laws such as Title VII, the ADA, the ADEA, and the NLRA, and from violating WARN Act mass-layoff notice requirements.
During probation
No distinct legal status — employment is already at-will, so an employee may be dismissed during any 'probationary'/introductory period for any lawful, non-discriminatory reason, without notice or severance, the same as after probation.
After probation
The same at-will standard applies after probation as during it: dismissal is permitted at any time for any lawful reason, without notice or severance, unless a contract, CBA, or company policy provides otherwise, or the termination violates anti-discrimination/retaliation law.
The US has no general federal notice-of-termination requirement for individual dismissals; only the WARN Act's 60-day notice for qualifying mass layoffs/plant closings (employers with 100+ employees) is federally mandated. Any other notice period is a matter of contract or company policy, and related rules (e.g., final-paycheck timing) vary by state. This information is for general guidance only and does not constitute legal advice.
Content last reviewed Oct 2026. Employment laws change fast, always verify critical hiring decisions, and talk to our team of international experts.
