How to Hire Workers in United States | Employer of Record (EOR) in United States

There is no federal law requiring private employers to provide paid holidays. However, federal employees are entitled to 11 paid holidays each year, including New Year’s Day, Independence Day, Thanksgiving, and Christmas. In the private sector, offering paid holidays is at the discretion of the employer, though many companies follow the federal calendar for business consistency.

Federal law does not mandate paid vacation for private sector employees. Paid time off is entirely up to the employer and is usually defined by company policy or employment contracts. For federal government workers, vacation—referred to as annual leave—is earned based on tenure, starting at 13 days per year and increasing with years of service.

There is no federally mandated probationary period for private sector employment. However, for federal government jobs, a one-year probationary period is standard for most new competitive service employees. During this time, agencies evaluate performance before granting permanent status. Some roles may have longer trial periods depending on the position.

The U.S. Department of Labor classifies workers primarily as employees or independent contractors under the Fair Labor Standards Act (FLSA). This classification affects tax obligations, benefit eligibility, and labor protections. Employers must properly distinguish between these two categories or face potential penalties. Additionally, workers may be exempt or non-exempt under the FLSA, determining eligibility for overtime.

The U.S. does not have a federal law requiring paid sick leave for private sector workers. However, the Family and Medical Leave Act (FMLA) guarantees eligible employees up to 12 weeks of unpaid, job-protected leave per year for medical or family reasons. Federal employees accrue 13 paid sick days per year, with no limit on accumulation.

The FLSA sets the standard U.S. workweek at 40 hours for non-exempt employees. There is no federal requirement for breaks or meal periods, although some states mandate them. Employers must comply with minimum wage laws and ensure accurate timekeeping for hourly staff. Federal employees often follow flexible work schedules, including compressed or alternative workweeks when allowed by agency policy.

Federal law requires non-exempt employees to receive overtime pay at 1.5 times their regular rate for any hours worked beyond 40 in a workweek. There are no provisions for daily overtime under federal law, though some states have stricter requirements. Overtime rules apply to both private employers and federal contractors, and exemptions exist for certain salaried roles.

There is no federal requirement for private employers to provide bonuses, whether discretionary or performance-based. However, if a bonus is promised as part of a contract or used to determine compensation, it may be subject to wage regulations under the FLSA. Federal agencies may award performance bonuses, but they are not guaranteed and depend on available funding and merit systems.

At the federal level, private sector employment is presumed to be at-will, allowing employers to terminate employees at any time for a lawful reason, without notice or severance. Exceptions include discriminatory termination or violations of a written contract. Federal employees, on the other hand, must be provided cause for termination after completing their probationary period, and due process rights apply.

Employees in the U.S. can resign at any time unless restricted by a contract. At-will employment means no notice is required, though giving two weeks’ notice is a common professional courtesy. Federal employees typically submit a formal resignation letter and provide advance notice to ensure a smooth transition, though it is not legally required.

Upon termination or resignation, there are no universal federal rules on final paycheck timelines or severance pay; these are dictated by state law or company policy. COBRA, a federal law, requires employers with 20 or more employees to offer continued health insurance coverage for a limited time after employment ends, at the former employee's expense.

One of the most notable aspects of U.S. employment law is the at-will doctrine, which gives employers and employees significant flexibility in ending the employment relationship. Additionally, the U.S. has a patchwork system of labor laws, where many critical issues—such as paid leave, break times, and final paychecks—are regulated at the state level rather than federally, leading to variation depending on location.

Employers in the U.S. are required to contribute to Social Security, Medicare (FICA), federal unemployment insurance (FUTA), and workers’ compensation (state-based). For each worker, these payroll taxes represent a mandatory cost of employment. Federal contractors may be subject to additional prevailing wage requirements under laws like the Service Contract Act or Davis-Bacon Act.

While there is no federal requirement for employers to offer benefits such as health insurance, paid leave, or retirement plans, the Affordable Care Act mandates that businesses with 50 or more full-time employees must provide health coverage or face penalties. Federal employees receive a robust benefits package including health insurance, dental and vision coverage, retirement plans, and life insurance.