Hiring overseas is a great way to access new talent. For recruitment firms, it’s often part of international expansion – but it also brings added compliance complexity. From understanding different worker classifications to navigating local employment laws, businesses must take proactive steps to stay compliant. Here are some best practices to guide you when hiring in the US, whether from abroad or across state borders.
Follow Local Labor Laws
Employment regulations in the US are decentralized: federal law sets the baseline, but each state (and sometimes even municipalities) can layer on additional requirements.
For international businesses, hiring practices and contracts must reflect the laws of the country you hire in. Following the laws of the state you are hiring in is also critical.
Some common employment laws and norms to watch out for include:
- Overtime laws: States like California have stricter overtime rules compared to federal standards.
- Leave requirements: Some states mandate paid sick leave, while others do not.
- Minimum wage
- Social security and employer contributions
- Anti-discrimination protections: Federal law prohibits certain kinds of discrimination, but states may expand protections to additional categories.
When hiring from outside the US, employers must also ensure compliance with federal rules such as Form I-9 verification for work eligibility.
Always research the jurisdiction where your employees will physically perform their work – not just where your client or business is based.
Understand Worker Types
Worker classification can seem complex, however in reality, in the U.S. it is solely up to the worker to decide how they want to be onboarded. To find out how your contractor likes to be onboarded, here are five questions you should ask to determine the right process. The onboarding types available in the United States are:
- W2
- Independent Contractor
- Corp-to-Corp
Work With Local Partners
When hiring across borders or state lines, local expertise is invaluable.
- Legal and HR advisors can ensure compliance with nuanced local requirements.
- Payroll providers can help navigate multi-state or cross-border tax obligations.
- An EOR that is recruitment focused understands recruitment processes and can guide best practices for hiring in the United States.
Think of compliance not as a hurdle but as an investment in building a sustainable, trustworthy employer brand.
How an Employer of Record (EOR) Helps
An Employer of Record (EOR) acts as the legal employer on your behalf, managing compliance obligations while you focus on growing your business.
An EOR:
- Assumes responsibility for employment law compliance, payroll, benefits, and taxes.
- Provides expert guidance to reduce the risk of misclassification penalties.
- Can help you draft compliant contracts.
- Allows for better speed to hire, meaning you can expand quickly without needing to establish a legal entity in each state or country.
- Provides proactive compliance, meaning that you will receive ongoing monitoring of regulatory changes to help you stay on the right side of evolving laws.
Whether you’re expanding placements across multiple states or dealing with high-risk contractor roles, an EOR can be the difference between a smooth engagement and a legal headache. If you’re ready to start your EOR journey, get in touch with our team today.