Guide to employment, payroll and benefits in

United States of America

Rivermate offers complete payroll, benefits and compliance services for

United States of America

01. Overview

Last updated: 

August 19, 2021

United States Dollar
Washington, D.C.
Ease of doing business
GDP growth

02. Grow your team in

United States of America

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

United States of America

, particularly if you don't have established local relationships. You can hire employees in

United States of America

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

The United States of America, also referred to as the US or America, is a nation predominantly located in North America. There are 50 states, a federal district, five major unincorporated territories, 326 Indian reservations, and a few small possessions that make up the United States of America. It is the world's third- or fourth-largest nation by total area, with 3.8 million square miles. It is the world's third most populated nation, with a population of over 331 million people. Washington, D.C., is the nation's capital, and New York City is the most populous city. At least 12,000 years ago, Paleo-Indians moved from Siberia to the North American mainland, and European colonization started in the 16th century. The thirteen British colonies founded along the East Coast gave birth to the United States. The American Revolutionary War broke out as a result of disagreements with Great Britain regarding taxes and parliamentary representation. The United States began aggressively spreading throughout North America in the late 18th century, steadily gaining new territories, displacing Native Americans, and admitting new states; by 1848, the country had spanned the continent. Slavery was legal in the southern United States until the American Civil War abolished it in the second half of the nineteenth century. During the Cold War, the United States fought the Korean War and the Vietnam War but avoided overt military confrontation with the Soviet Union. The Space Race pitted the two superpowers against each other, resulting in the 1969 spaceflight that landed humans on the Moon for the first time. With the fall of the Soviet Union in 1991, the Cold War came to an end, leaving the United States as the world's only superpower. The US is a federal republic and a representative democracy with three branches of government, including a bicameral legislature. It belongs to the United Nations, the World Bank, the International Monetary Fund, the Organization of American States, NATO, and other international organizations as a founding member. It is a permanent member of the Security Council of the United Nations. Its population has been deeply influenced by centuries of immigration, making it a melting pot of cultures and ethnicities. The United States scores highly on foreign indices of economic freedom, alleged corruption, quality of life, higher education quality, and human rights. However, the nation has been chastised for racial, wealth, and income disparities, the use of capital punishment, high incarceration rates, and the lack of universal health care. The United States is a highly industrialized nation that consistently performs well on socioeconomic indices. At current market exchange rates, it accounts for roughly a quarter of global GDP and is the world's largest economy by GDP.

04. Public holidays

05. Types of leave

Paid time off

Public holidays

Sick days

Maternity leave

Paternity leave

Parental leave

Other leave

06. Employment termination

Termination process

The majority of employees in the United States work on a "at will" basis, which means that employment can be terminated at any moment for any reason. Employers, on the other hand, are prohibited from firing an employee based on his or her race, gender, national origin, disability, religion, or age.

Employers are normally not compelled to provide notice or pay severance, but there are a few exceptions. Employers may be required to provide notice and/or pay severance under individual or collective agreements.

Notice period

The Worker Adjustment and Retraining Notification Act (WARN) protects workers, their families, and communities by requiring employers with 100 or more employees (generally excluding those who have worked less than six months in the last 12 months or those who work less than 20 hours per week) to provide at least 60 calendar days' advance written notice of a plant closing and mass layoff. When layoffs occur as a result of unforeseeable business circumstances, faltering companies, or natural disasters, WARN makes certain exceptions to the requirements. Managers and supervisors, as well as hourly and salaried employees, are all entitled to notice under WARN. WARN also requires notice to be given to representatives of employees, the local chief elected official, and the state dislocated worker unit.

Severance pay

Employees frequently receive severance pay upon termination of employment. Typically, it is determined by the length of employment for which an employee is eligible at the time of termination. Severance pay is not required by the Fair Labor Standards Act (FLSA). Severance pay is negotiated between an employer and an employee or their representative.

Probation period

The probationary period for an employee in the United States varies and is entirely dependent on the arrangement reached between the employer and the employee. However, in the United States, a 90-day probationary period is standard.

07. Working hours


The standard workweek in the United States is 40 hours. Employees work an average of eight hours per day, five days a week. However, there is considerable variation between jobs. Certain positions are part-time, which means the employee works fewer than 40 hours per week. Others require more than 40 hours per week and may compensate employees who work more than 40 hours per week.


Non-exempt employees who work more than 40 hours in a single week must be compensated at one and a half times their regular rate of pay under the Fair Labor Standards Act (FLSA). When an employee who normally earns $20 per hour works overtime, he or she will earn $30 per hour.

Exempt employees are not eligible for overtime, regardless of the number of hours worked per week. Employees in managerial or executive positions, administrative positions, creative jobs, and professional positions are typically exempt from overtime laws. Generally, exempt employees are compensated on a salary basis rather than an hourly basis.

08. Minimum wage


For covered nonexempt workers, the federal minimum wage is $7.25 per hour. Many states have minimum wage legislation as well. When an employee is covered by both state and federal minimum wage regulations, the employee is entitled to the greater of the two.

09. Employee benefits


Although businesses in the United States are not obliged to offer health insurance coverage to their workers, the Affordable Care Act (ACA) penalizes those that do not. Depending on the size of the business, the regulations and expectations for health insurance differ. Businesses with more than 50 employees are required to follow different regulations than companies with less than 50 employees.

The ACA also included tax incentives for small companies to help make health insurance more affordable.

An company may provide extra employee perks that are not mandated by US law. Among the various perks that a company may provide are:

Defined benefit plans, also called pensions

Defined contribution plans, such as 401(k) or 403(b) retirement plans

Flexible scheduling

Life insurance benefits

Child care assistance

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

United States of America

to hire a team takes time, money, and effort. The labor law in

United States of America

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

United States of America

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

United States of America

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

United States of America

via our Employer of Record / PEO solution.

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