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SALARY PAYMENT IN United States Dollar (USD, $)
CONTRACT LANGUAGES English
PAYROLL TAX Varies per state
PAYROLL CYCLE Bi-weekly or weekly
TIME TO HIRE 12 hours
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The US varies from most countries in its laws around terminations and severance rights. Most states adhere to the concept of ‘at-will employment’. This legal concept means employers can terminate employment agreements at any time, with or without cause or grounds, provided it is not for an illegal reason, e.g. discriminating against a category protected by law or in retaliation against protected “whistleblowing” activity.
The employment agreements of senior or highly-skilled employees will often include a “just cause termination” clause. Employees may only be terminated for “cause” and listed “permissible grounds”. The grounds for a “just cause” termination are a matter of agreement between employer and employee.
There is no one law that governs the issue of wrongful termination. Instead, there are relevant laws at the federal, state and local levels on issues such as hostile work environments and anti-retaliation/whistleblowing.
Title VII of The Civil Rights Act (1964) makes it illegal for employers to terminate employment contracts for reasons related to protected classes, such as; race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), ethnic origin, age (40+), disability and genetic information (including family medical history).
Unless provided for in an employment agreement or collective bargaining agreement, no law requires US employers to follow a formal dismissal procedure.
Again, unless provided for in an employment contract or collective bargaining agreement, employers are not obliged to make severance payments to terminated employees. However, severance payments are commonly made on termination to waive any potential claims arising out of the employment relationship.
The concept of at will employment works both ways: just as an employer can terminate an employment agreement without cause or notice, an employee can resign for any reason without giving notice. However, most employers will include a notice clause in their employment agreements or encourage employees to adhere to a resignation procedure set out in an employee handbook.
These types of provisions are used in the employment agreements of senior and highly-skilled employees.
Your business can easily hire employees in USA without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
In comparison to other countries, employers in the US have much more flexibility when it comes to terminating employment agreements.
The risks revolve around breach of contract and statutory breaches, e.g. unfair dismissal based on racial discrimination or retaliation to whistleblowing. To mitigate risks, employers should create strong employment agreements that are compliant with federal, state and local legislation.
By partnering with Horizons as your USA PEO you gain access to a comprehensive set of outsourcing services specifically designed to help organizations expand and hire in the USA.
