If your company is planning to set up business operations in the United States for the first time, it’s important to be aware of the country’s complex employment laws before you get started. No matter where in the world your business is based, your U.S. location(s) will be subject to a number of federal employment laws, as well as applicable state and local laws.
All employers operating in the U.S. are required to comply with federal employment laws. Additionally, each U.S. state can opt to pass additional laws that hold companies doing business within their borders to even higher standards than what is required under federal law. Some states even have special requirements for certain municipalities or counties.
For example, if your corporation or limited liability company (LLC) is registered in Delaware, but the business has an office in Florida, then you must comply with Florida employment laws. If you have remote employees who work in another state, you’ll also have to follow applicable employment laws for their home state when it comes to those individuals.
In the U.S., workers must be paid in a manner that complies with the Fair Labor Standards Act (FLSA), which is a wage and hour law. Beyond this federal law, most states also have additional wage and hour requirements:
These are just a few of the many FLSA provisions and state-specific wage and hour concerns that U.S. employers need to be aware of and comply with. This aspect of compliance can significantly impact wage expenditures and payroll, but there are a number of other payroll matters you’ll need to be prepared to deal with as a U.S. employer.
Processing payroll and maintaining U.S. payroll records can be very complex, especially if your company has locations operating in more than one state or you have remote employees working in multiple states. Many states have unique payroll requirements — employers with employees in those states are responsible for complying with all such requirements.
There are other important compliance obligations related to payroll, including several end-of-year tax filings. For example, employers must also provide employees with a W-9 statement of their annual earnings, which employees use to file their federal income taxes. Similar requirements apply where state income tax is required.
Various laws require employers to keep a record of each employee. Before a new employee can be added to the payroll, employers have to gather, organize, and store quite a bit of specific information. Employers must maintain certain employee records for active and terminated employees, as well as meet other key administrative requirements.
Compliance concerns aren’t all related to properly paying employees and keeping appropriate records. In addition to applicable state and local laws, there are a number of federal laws focused on ensuring that everyone has equal employment opportunity (EEO), including but not limited to the Civil Rights Act (CRA), Americans With Disabilities Act (ADA), and Age Discrimination in Employment Act (ADEA). The EEO laws all prohibit workplace discrimination, including harassment, on the basis of one or more protected characteristics. Note that many states impose more stringent requirements than federal law.
Employers cannot use information about the characteristics protected under any of the EEO laws to make employment decisions, such as (but not limited to) hiring, pay, promotion, access to training, and more. Further, employers are required to ensure that the workplace is free from both quid pro quo sexual harassment and hostile environment harassment.
U.S. leave laws also pose a unique challenge, some of which relate to a few of the EEO laws. Federal law does not require employers to provide employees with paid vacation, holidays, or sick leaves, but most employers do offer at least some paid time off. There are some situations in which federal law obligates employers to provide unpaid leave, like with the Family Medical Leave Act (FMLA). The FMLA requires covered employers to allow eligible employees up to 12 weeks of unpaid leave if they or an immediate family member experience a serious health condition, or if they become parents.
Many states also have sick leave laws, some of which do require a certain amount of paid sick leave. Some also have their own family medical leave requirements that are more strict than what is required under federal law.
As you can see, there is a lot to consider in relation to U.S. employment law compliance. And this doesn’t even cover everything — for example, some states have specific compliance training requirements, and workers’ compensation coverage varies by state. That’s one reason why so many expanding companies decide to partner with an outsourced HR provider like Justworks.
With Justworks, you're ready to begin operating in the U.S. and easily access helpful compliance support resources. As a Justworks user, a few of the advantages you can utilize include:
For an out-of-country company expanding into the U.S., there’s no better way to navigate the country’s complex, ever-changing employment laws. You’ll be able to hire, onboard, and pay employees correctly via the Justworks platform, and Justworks’ Customer Support team and HR consultants are only a phone call away.
It’s easy and affordable to join Justworks. As a Firstbase customer, you’re even eligible for two free months of Justworks admin fees. What are you waiting for? Click here to activate this exclusive offer.
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