Interested in using Employer of Record Services? Based on our experience as the longest serving Employer of Record in the USA, we answer common questions businesses expanding to the USA ask us before they get started. Have a look!
We Want this Worker to Feel Part of our Company, how via an EOR?
Can I Relocate my Global Staff to the US and use an EOR to Employ Them?
Will you Help me Form a Employee Benefits Package That is Appropriate for the US Landscape?
Do you use Local Partners or are the Workers Employed Through PGC’s Entity?
How Does Employer of Record Services Simplify Employing Someone in the USA?
Thinking of employing someone in the USA but don't know where to start? This video covers how you can remain complaint per state by using Employer of Record Services to employ US workers on your behalf.
Why it Helps to Get Help When Employing Someone in the USA?
Each US state has its own employment compliance laws on top of federal laws you must adhere to when hiring employees in the USA. This can be very overwhelming for new businesses entering the US market, and when hiring remote workers across different states.
By using PGC’s employer of record services to facilitate the employment of your US employees, you will:
Be able to payroll US employees in any state compliantly.
Mitigate risks and remain compliant with US employment laws related to back-office payroll services.
Offer employees first class benefits - In the US, employees expect a sponsored healthcare plan from their employer to contribute towards medical bills; most employers are legally required to offer health insurance that is affordable in accordance with the federal Affordable Care Act to employees.
By using PGC’s employer of record services when employing someone in the USA, you can offer a top-class benefits plan at an affordable price vs if you sourced plans yourself. We secure benefits via a top 3 US healthcare provider thanks to our large economies of scale and size of our workforce from employing in the US for over 23 years.
Have a US workforce experience team - Dedicated to answering your US employee's employment queries and onboarding.
USA Employer of Record Benefits
You can quickly enter the US market and compliantly hire remote workers in any state by utilizing US Employer of Record services (EOR).
Using US Employer of Record services, means the EOR will be responsible for facilitating the employment of your US workers, including onboarding, payroll, benefits, remitting taxes, and more. The video and points below explain common employer of record benefits.
1) Simplify US employment compliance
Using US Employer of Record Services ensures compliance with employment laws related to back-office payroll services in any state you are hiring employees in. An Employer of Record can provide best practice guidance based on applicable federal, state, and local employment laws.
This includes staying up to date with federal and local employment law changes, tax codes, and more to assist with you remaining compliant.
Remember there are 50 different states, all with varied employment laws on federal and local levels. If you hire and payroll employees in each state alone, you must stay on track with these or face penalties.
2) Time and cost savings
Partnering with a US Employer of Record eliminates the need to establish a US entity in all states you are hiring in. You can quickly enter the US market, and employ US workers quickly, knowing payroll and other back-office services are covered.
Save time and money on administrative burdens like:
Employment compliance research
Setting up a US payroll division
Taxes
Sourcing benefits
Employment paperwork, and more.
3) Payroll and Benefits Management
One of the main employer of record benefits is that the solution takes care of payroll processing, ensuring accurate and timely salary payments to your employees.
In the US, your employees also expect their employer to provide them with healthcare insurance. In fact, many employers are legally required to offer health insurance that is affordable in accordance with the federal Affordable Care Act to employees.
An Employer of Record will handle benefits administration, including providing your US employees with:
Health insurance plans
Retirement plans
Dental and vision cover
Employee perks
Short term and long term disability
PGC offers US employee healthcare benefits plan from a top 3 provider in the US. Thanks to our economies of scale gained from our large workforce, we access high quality benefits plans, at a lower cost to you.
4) Provide Competitive Employee Healthcare Plans
If you were to source US employee benefit plans yourself, not only would it be extremely time consuming and expensive, but you may not have the knowledge of the exact healthcare benefits US employees expect.
Additionally, some PEOs and EORs in the US require you to have a minimum number of employees to access their benefit plans.
If you utilize PGC as your Employer of Record, you can access our top-class US employee benefit plans, no matter what size your business is. Healthcare benefits are often a deal-breaker for US employees accepting job offers. You can advertise the US Employer of Record extensive plans as your own to attract and retain high quality talent.
5) Free up Time to Focus on Growing your US Business
Using an Employer of Record provides businesses with the flexibility to scale their operations swiftly. You can onboard employees quickly anywhere in the US with reassurance that payroll and benefits are covered. Don’t limit your business potential to one area, this solution enables you to employ remote workers in any state.
By delegating administrative back-office payroll related tasks to a Employer of Record, businesses can concentrate on their core strategic initiatives. Save time and money you would dedicate back office tasks and staying on top of US employment law updates.
When you are entering the US market for the first time or a new state, you can focus all your energy and resources on tasks to grow your business, without worrying about payroll.
So, what are you waiting for, there’s never been an easier way to expand business to the US. Simplify the employment process by using Employer of Record Services.
Do US Employees Sign a Contract with an EOR or my Business?
US employees receive an offer letter vs an employment contract. As employment is ‘at will’ in the US, employment contracts that are offered in many other countries are instead called offer letters in the US.
The offer letter should cover the terms of employment, including:
Their salary
Paid time off allowance
Healthcare plan and benefits.
Your employees will sign an Engagement Agreement with your US employer of record.
The employer of record will hold the following documents with the US employees:
Engagement Agreement
Schedule, outlining the worker’s role, job description, start date, salary, worksite location, and other conditions of employment as determined by your business or your client
Paid Sick Leave Notice, if applicable, and other similar federal or state entitlements
Benefits
Work authorization verification
You are responsible for the management of your US employees
If you use Employer of Record services, you are still responsible for the day-to-day management of US employees. You will be in control of their schedule and job responsibilities, and any other conditions of employment.
One of the main employer of record services benefits is that they take care of the complex behind the scenes, back-off administrative compliance.
If your employee have any employment questions regarding benefits, payroll, and employment law updates, the employer of record’s Workforce Experience team will be your dedicated point of contact.
Will my Business Have a Dedicated Account Manager With PGC?
If you use PGC as your US Employer or Record benefits include your business having a dedicated US-based relationship manager and access to our internal expert compliance team when employing in the US.
They will not only be your go-to account contact but will provide your US employees with HR support. This will include:
Guiding your employee through every step of the US employment process.
Onboarding your US employee.
Offboarding your US employee.
Talking your employee through healthcare benefit plans, 401(k), and the Precision portal.
Answering questions on payroll, benefits, general employment queries, and day to day HR issues.
Communicating US employment law updates with you and your employees.
Providing market research to help you succeed in the US market – including top states for business, growing sectors, and more.
What Insurances are Workers Covered under by PGC?
If you use PGC as your US Employer of Record, your US employees are covered under our comprehensive business insurances. This includes:
General liability insurance
Professional liability insurance
Worker compensation coverage – If your employee is on site.
Auto coverage if your employee is driving to work
Crime insurance
Fidelity bond
Large umbrella policy – This extends the insurance limits of the different insurances we have.
How PGC act as an Outsource HR Service in the US?
Want to outsource HR in the US? If you choose PGC’s US Employer of Record services, we assign you a dedicated Relationship Manager.
They are your point of contact at PGC for advice and guidance on entering the US market and US employment queries. Not only that, they’re also your workers’ point of contact for HR.
Your Relationship Manager will guide your US employees through every step of the employment process. HR related services include:
Onboarding
US payroll
Employee benefits planning
Timesheets
US employment queries
Day-to-day HR issues
No need to outsource HR services in the US. We’ve got your employees covered.
EOR USA FAQS..
More of your questions on using an Employer of Record answered…
Click on the questions below to learn how using employer of record services benefits businesses expanding to the USA.
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The short answer is yes, you can employ someone in the USA alone. But as outlined earlier, not only would you need to set up a legal entity and be responsible for all the tax and legal obligations and liabilities that come with that, you would also need to:
Source a full suite of insurance policies
Source and provide your own healthcare and benefits plan
Hire in-house compliance and tax specialists to keep up-to-date with ever-changing legislation
Provide workers with administrative HR support in case of localized tax/benefits queries
Create a comprehensive set of HR policies which comply with federal and state law
As you can see, the cost and complexity adds up very quickly. If you’re only planning to engage a handful of workers in the short term, often these costs are unjustifiable and an EOR is a cost and time-effective solution for you.
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Another option you have is to engage workers directly as freelancers. In the US freelancers are officially referred to as independent contractors.
‘Great, I’ll just engage these workers as freelancers and then I don’t need to worry about entities, tax, benefits, insurance, compliance etc. Job done!’ I hear you say.
Hold on a sec! Engaging freelancers raises the issue of worker misclassification. Misclassifying a worker is defined as when a worker is being treated and taxed as a freelancer but really they are being engaged by your company as an employee.
Worker misclassification in the US is well embedded and there is extensive case law around classifying a worker, making it:
Difficult and complex to actually classify a worker as an independent contractor in the first place
Extremely costly if it is proven you have misclassified a worker.
Not only will the IRS backdate taxes and wages for this worker but also benefits that should’ve been provided since day one are backdated and costed to you too. There are often legal costs associated with defending a case in addition to hefty financial penalties from the IRS.
Classifying workers as independent contractors can be complex. Treating a worker as an independent contractor, when the nature of the work being performed contains elements of an ‘employee-employer’ relationship opens up a client as well as workers to misclassification risk. In some cases, it may be more appropriate to seek an employment solution.
Make sure if you do engage workers as contractors you have classified them correctly as contractors as if they are behaving and being treated as a worker then you can be heavily penalized by the IRS and US courts under the Fair Labor Standards Act or legislation on both a federal and state level concerning Independent Contractor Misclassification.
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EOR is a great solution when needing to employ workers quickly and remotely but there may well come a time when it is worth taking this in house yourself.
If you are planning to take on a larger number of workers, it is worth comparing costings of putting them through an EOR provider vs setting up a legal entity and bringing them onto your own payroll.
Usually, once you have reached around 10 workers in a country it’s safe to assume that country is part of your long term business plan.
It might well be then more cost effective for you to hire your own compliance team to manage this workforce’s payroll and benefits.
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It’s really important that all your workers feel valued and part of your company, especially those operating in a country you have no legal presence in.
We encourage you to treat your US based worker as you would any other. Day-to-day, you will be managing them. You will still send them your worker handbook, job description and duties.
An EOR is the vehicle in the background that is simply just allowing this relationship to happen. The EOR is there to facilitate the employment and handle any US based HR queries, everything else is still handled by you.
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EORs can work with any US nationals and can often work with visa holders (depending on which visa the worker holds).
EORs cannot assist any workers who hold an employer-sponsored visa as they also need to be employed in the US by the business sponsoring their visa.
US visa types are numerous and nuanced which means it’s tricky to have hard and fast rules around which can be engaged. If you have any questions around which visa types an EOR can engage with, the best advice would just be to check with your chosen provider on that specific case.
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There may come a time when you have everything set-up yourself in the US and you want to bring your workforce onto your internal payroll.
It’s common for companies to use PGC as an interim solution. It’s very easy to transition to your own payroll if you decide to in the future.
There may also be a time (and we hope not!) when a new worker is not working out and you wish to terminate your engagement with them.
Neither of these are an issue.
Usually, you would just need to let your EOR provider know when the worker(s)’ final day will be and they can offboard the worker on the day, whichever the situation.
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Thanks to our slick processes, experienced team, and our tech, we can onboard new employees very quickly; usually within 24 hours if necessary! If this is your first worker engaged via PGC, it takes 5-10 working days to go through the process of onboarding as a client of PGC.
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Yes. Our team of experts can advise you on best practice in US and help you build out a compensation and benefits package that your workers will love!
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Nope. PGC can engage just one remote US worker, or your whole US & Canadian team.
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We have a full range of best-in-class benefits from top-tier providers. They include medical, dental, vision, commuter benefits, and 401(k). You can view more details here on benefits US employees must be offered.
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All the workers are employed through either PGC’s local entity in USA. We don’t outsource any parts of the employment process.
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So you've decided that an EOR is the solution for you to engage with workers in North America. Trying to get to grips with employment in the US or Canada can be a real headache. We get it. Fortunately, we know the right people you need to contact... us!
We’ve been serving businesses from around the globe for over 20 years; removing the barriers and complexity of engaging workers across North America.
Set up a free, no-strings-attached discovery call with one of our expert consultants to learn more about how we can help your business.
Disclaimer: The information provided here does not, and is not intended to, constitute legal advice. Instead, the information and content available are for general informational purposes only.
Any More Questions on Using Employer of Record Services in the USA?
Schedule a free 1-1 session below with a US Expansion Consultant. We’ll talk you through PGC’s Employer of Record USA solution and can offer best practice advice on US expansion topics like popular states for business, talent, and how to enter the market. Putting the steps in place to achieve your US business expansion dreams is only one call away…