Employing a worker in the U.S.? In-house, PEO or EOR?

So, you have decided that you want to expand your business to the U.S. or launch in a new state? We're not surprised, the opportunities for growth are endless! This is the first step on the pathway to becoming a global business, but next, you need to figure out how you are going to employ your first workers in the U.S. 

When employing a worker in the U.S., there are lots of factors that must be considered. Such as, do you have a business entity? Or are you registered in the state you wish to employ people in? Do you understand the tax system surrounding employment in the U.S.? Are you aware of the consequences of non-compliance surrounding worker classification, healthcare, termination, sick leave, and much more? Confusing, right? Whether you administer these processes alone or not depends on how you decide to employ your workers in the U.S.

There are three main ways you can employ your U.S. workers

1. In-house

If you decide to employ a worker in-house in the U.S., your company takes on all the aspects of the employment relationship. For most responsibilities, you may partner with companies that specialize in certain back-office tasks such as remittance of taxes, payroll, and benefits administration. The negotiation with the brokers, sourcing partnerships and gathering knowledge will be your company’s responsibility to handle. Additionally, your company will be responsible for remaining compliant with local, state, and federal laws including sick leaves, paid time off, unemployment, workers’ compensation, and benefits.

2. Professional Employer Organization (PEO)

A PEO is a hybrid model between managing some aspects in-house while outsourcing certain functions to the PEO. If you decide to use this hybrid model when employing workers in the U.S. it allows your business to piggy-back on a PEO’s established group and offers similar benefits to your worker as a larger employer. However, the largest part of compliance management and risk still rests with you.

3. Employer of Record (EOR)

An EOR is a complete, outsourced employment model in which the EOR takes on all the employment responsibility and liabilities and technically is the employer ‘on’ record of your chosen workers in the U.S. In this model, you generally have minimal to no employment liability other than for discrimination, harassment, and a few other things that are generally out of the control of the EOR.

Want to learn more about employing workers in the U.S.?

PGC is here to help! If you need some extra help and expertise when employing your workers in North America, or simply would like to find out more information about our employer of record service, get the conversation started today!

Disclaimer: All information written here is for general informational purposes only and is not intended to be a substitute for professional and/or legal services.