How to hire in United States through an EOR

At-will employment is the default in the US. It lets you end the relationship at any time, without cause or notice, as long as the reason isn't illegal, like discrimination. You'll use it for most hires.

Contract types

For ongoing roles, at-will is the standard. It gives you the flexibility to adjust quickly when business needs change.

At-will covers 90%+ of US jobs. Fixed-term contracts have no federal limits on length or renewals, unlike in Europe. That said, watch your state rules. Repeated fixed-term contracts can imply permanence in court.

What has to be in the contract

US federal law doesn't require written contracts. Verbal and implied ones are legally valid. But you should still write everything down. It protects you if a dispute comes up.

At minimum, include job title and duties, pay rate and schedule, any benefits, and at-will status. If you want notice periods on either side, spell those out too. There's no language requirement; English is fine.

Probation periods aren't federally required, but 30-90 days is common practice. At-will still applies during that window, so you can part ways freely. Anti-discrimination laws apply regardless.

Contractor vs employee

Misclassification is the biggest risk here. The IRS and DOL use different tests. The DOL looks at control: do you set hours, provide tools, or supervise the work? The IRS checks behavioral control, financial control, and the nature of the relationship.

If you treat a contractor like an employee, courts can reclassify them. You'd owe back taxes, overtime, benefits, and penalties. DOL fines start at $1,000 per violation per year. The IRS adds 1.5-3% of wages in back taxes, plus interest. States add their own penalties on top; California fines up to $25,000 per violation.

Workers can also sue directly. That can mean three years of back pay, liquidated damages that double it, and attorney fees. If someone genuinely controls their own work, use a 1099. If they don't, treat them as an employee.

Non-competes are increasingly unenforceable. The FTC ruled them mostly invalid nationwide in 2024, but courts blocked the ruling. They're void in California, Oklahoma, and North Dakota. Elsewhere, keep them to 1 year and tie them to protecting real business secrets. IP assignment clauses hold up if they're clearly written; employees own their inventions unless there's an assignment in place.

Getting this wrong can turn a straightforward hire into a six-figure liability. If you're unsure about classification or compliance, an EOR can help you stay on the right side of the rules.

US federal law doesn't require any paid annual leave. That's the fact that catches most international hiring managers off guard. You'll still need to offer it if you want to compete for good people.

Time off

There's no federal mandate for paid vacation. Employees accrue it through company policy, typically 10-15 days after one year, increasing with tenure. It usually builds hourly or per pay period, around 1.54 hours per week for 10 days a year.

Public holidays are federal, but private employers aren't required to give paid time off for them. Most do for the major ones. Here's the full 2026 list.

All leave types

Federal requirements are minimal. States fill some of the gaps, with places like California mandating paid sick leave. For job protection, FMLA covers larger employers: up to 12 weeks of unpaid leave for family or medical reasons, with health benefits maintained, if the employee qualifies (50+ employees, 1 year of service, 1,250 hours worked).

Job protection applies under FMLA for covered employers. Where pay is provided, it's 100%, or partial through state programs.

Mandatory benefits

You're required to withhold and match Social Security (6.2% each on wages up to $168,600 in 2024; figures adjust yearly) and Medicare (1.45% each, no cap). Total FICA comes to 15.3%, split evenly between employer and employee.

There's no federal health insurance mandate for private employers, but under the ACA, companies with 50 or more employees must offer affordable coverage or face penalties. In practice, most employers cover 50-80% of premiums.

Pensions aren't required. A 401(k) match helps with hiring, with 3-6% being the typical range. Workers' compensation insurance is state-mandated, and your premiums are based on job risk.

What people actually expect

Most US employees expect 15-25 vacation days, paid sick time in the 5-10 day range, and 10 or more holidays. Unlimited PTO is common in tech, but it's worth building in some structure to avoid people taking less time than they should.

Health insurance is a given for most candidates, including full family coverage with low deductibles, plus dental and vision. If your team is remote, home office stipends ($50-100/month) and mental health days are increasingly expected too.

A 401(k) match of 4-6% makes a real difference at the offer stage. For startups, equity matters. In competitive markets like tech or finance, you'll also be up against employers offering gym memberships, learning budgets around $1,000/year, and flexible hours. Expectations shifted after 2020, so it's worth checking in with your team on what actually matters to them.

The U.S. is generally considered employer-friendly when it comes to ending employment. Most states follow "at-will employment," which means you can let someone go for almost any reason, or no reason at all, as long as it's not an illegal one. That said, "illegal" covers more ground than many employers expect, and the rules shift importantly depending on which state you're in. 2026 also brought new restrictions worth knowing about, particularly around training repayment agreements and AI in hiring.

What makes a termination illegal

You can't fire someone based on protected characteristics: race, color, religion, sex, national origin, age (40+), disability, or genetic information. Terminating someone for whistleblowing, reporting unsafe conditions, union organizing, taking FMLA leave, or serving on jury duty is also off the table. Some states go further. California, for example, protects employees from retaliation for wage theft complaints.

A handful of states recognize additional exceptions to at-will employment. Nevada and New Hampshire recognize "implied contract" and "good faith" exceptions. If you've created an expectation of job security through your handbook or your conduct, you can't fire someone without cause. Texas sits at the other end of the spectrum, with a very narrow public policy exception and fewer restrictions overall.

Whatever state you're in, document everything. Keep records of performance issues, policy violations, written warnings, and disciplinary actions. If a termination is ever challenged, that paper trail is what protects you.

Notice periods and final paychecks

There's no federal requirement to give advance notice before letting someone go. The federal WARN Act does require 60 days' notice for mass layoffs involving 50 or more employees at companies with 100 or more employees, and some states have their own WARN requirements with lower thresholds.

Final paycheck deadlines vary by state and are strictly enforced. Here's what you need to know:

Miss these deadlines and you'll face penalties. Depending on the state, that could mean wage claims, employee lawsuits, or liability for damages plus attorney's fees.

Severance

Severance isn't legally required anywhere in the U.S., federally or at the state level. If you offer it, that's your call. It's often worth doing for longer-tenured employees or when you want to reduce the risk of litigation, but there's no obligation.

When companies do offer severance, it's usually tied to tenure and role. A common approach is one week per year of service, or two weeks per year for management. Some companies use a flat amount instead. There's no legal minimum or cap either way.

The one exception: if you've promised severance in an employment contract or your handbook, you're legally bound to follow through. If your handbook says "we provide two weeks' severance," that's an enforceable commitment.

Work permits and visas

You can't hire a foreign national through an EOR in the United States. An EOR becomes the official employer on paper, but that doesn't resolve the visa issue. To legally employ a foreign national, you need to sponsor them for a work visa yourself.

The main visa categories are:

• H-1B: Specialty occupations (requires a bachelor's degree). Capped at 65,000 per year, plus 20,000 for advanced degrees. Processing takes 2-3 months. You must prove you couldn't find a qualified U.S. worker.
• L-1: Intracompany transfers. Only works if the person already works for your company abroad and you're transferring them to the U.S.
• O-1: Individuals with extraordinary ability in arts, sciences, business, or athletics.
• E-2: Treaty investors. Requires significant capital investment.
• EB-3: Employment-based green card (permanent). Takes 5-10+ years.

An EOR can't sponsor visas. You need to be the direct employer, or have a U.S. subsidiary, to petition for a work visa. There's no digital nomad visa in the United States.

New rules that matter (2026)

California banned "stay-or-pay" agreements effective January 1, 2026. You can no longer require employees to repay training costs, immigration expenses, or recruitment fees if they leave. This applies to all employers in California, regardless of size, and violations can result in employee lawsuits with damages plus attorney's fees.

Illinois banned non-compete and non-disparagement clauses that prevent employees from discussing work conditions or engaging in concerted activities. If you have employees in California or Illinois, it's worth reviewing your employment agreements now.

Washington expanded paid family and medical leave protections effective January 1, 2026. Job restoration rights now apply to employers with 25 or more employees, phasing down to 8 or more by 2028. The eligibility threshold also dropped from 1,250 hours to 180 days of employment. You're required to provide written notice within five business days of an employee requesting FMLA leave.

Illinois also amended its Human Rights Act to restrict AI-based hiring and employment decisions. You can't use AI tools that have the effect of discriminating against protected classes, and you must notify employees if you're using AI in hiring or performance evaluation.

At-will employment gives you real flexibility, but the exceptions are real too, and they're growing. Document your decisions, keep up with state-specific rules, and avoid handbook or contract language that creates unintended obligations. If you're hiring internationally, build visa sponsorship timelines into your planning early. They're not quick.