Hire employees in the United States

Quick answers

The questions leadership teams ask first.

Hiring routes compared

Speed, registration burden, benefits and liability differ by route.

What an employee costs in the United States

Statutory employer cost is modest and falls as a percentage on high salaries because Social Security stops at the wage base. Customary benefits are the larger line and are the same dollar amount whether the salary is $60,000 or $160,000, so low earners carry a higher percentage burden. The model below is a $90,000 salaried employee in 2026.

On the model salary, Dryft's worked example puts a $90,000 employee at about $108,500 all-in in Texas and $109,900 in California with single health coverage and a 3% match, and roughly $121,000 to $122,000 with family coverage, before the EOR fee. Ask us for a cost model for your state and benefit tier.

Payroll and tax

Pay frequency is set by state law; biweekly or semi-monthly is the norm, and some states require more frequent pay for hourly or manual workers. Pay stubs are mandatory in most states. Federal income tax and FICA are withheld every pay period under the employee's Form W-4 and deposited monthly or semi-weekly; the quarterly Form 941 and the annual Forms 940, W-2 and W-3 are due by the end of the month after the period. State withholding is a separate registration in 41 states and the District of Columbia; nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming) tax no wages. New hires must be reported to the state directory within 20 days and Form I-9 Section 2 completed within three business days of the start date.

Progressive federal withholding plus state and local layers

Federal income tax runs from 10% to 37% in 2026, with the 22% bracket starting at $50,400 of taxable income for a single filer and a standard deduction of $16,100. State income tax ranges from zero to over 13% in California, and some cities, notably New York City, Philadelphia and many Ohio and Pennsylvania localities, levy a wage tax on top. The employee's physical work location, not the employer's registration, decides which state and city rules apply, so a remote hire who moves states changes the payroll set-up.

Minimum wage is set three times over

The federal minimum wage has been $7.25 an hour since 2009 and functions as a floor only. Thirty states set more in 2026, led by Washington at $17.13, New York City at $17.00, Connecticut at $16.94 and California at $16.90, and cities go further: Seattle $21.30, Denver $19.29, San Francisco $19.61 from July 2026. Twenty states, including Texas, Georgia and Pennsylvania, remain at $7.25. Minimum wage rarely binds a professional hire, but the exempt salary thresholds in California, New York and Washington are tied to it, which decides whether a salaried employee is owed overtime.

Leave and mandatory benefits

• Paid vacation. None is required by federal or state law. Market practice for professional roles is 15 to 20 days plus about 8 paid holidays. Accrued vacation is earned wages that must be paid out at separation in California, Colorado, Illinois, Massachusetts and several other states, and "use it or lose it" is void in California.
• Public holidays. 11 federal holidays; private employers need not observe them or pay a premium. Most give 8 to 10.
• Paid sick leave. No federal mandate. Twenty states and the District of Columbia require it in 2026, typically one hour per 30 or 40 hours worked up to 40 to 56 hours a year, with Illinois, Maine and Nevada allowing use for any purpose. Many cities add their own rules.
• Family and medical leave. The FMLA gives 12 weeks of unpaid, job-protected leave at employers with 50 or more employees. Thirteen states and DC run paid family and medical leave insurance funded by payroll contributions, including California, New York, New Jersey, Massachusetts, Washington, Colorado, Oregon, Connecticut, Minnesota (new in 2026) and Delaware.
• Maternity and paternity. No federal paid leave. Protection comes from the FMLA, the Pregnant Workers Fairness Act and the state programs above. Paid parental leave of 6 to 16 weeks is a common recruiting benefit in professional hiring.
• No 13th month. No statutory bonus or 13th salary exists. Bonuses are contractual, and non-discretionary bonuses for hourly staff must be included in the overtime rate.
• Working time. No limit on hours for adults. Non-exempt employees receive 1.5 times pay over 40 hours a week; California, Alaska, Nevada and Colorado add daily overtime, and California also mandates paid rest and unpaid meal breaks with premium pay for each miss. Exempt status requires a salary of at least $684 a week federally, $70,304 a year in California and $66,300 in New York City.
• Health and retirement. Employers with 50 or more full-time equivalents must offer affordable health coverage under the ACA or pay $3,340 to $5,010 per employee in 2026 penalties. There is no mandatory employer pension beyond Social Security, though 17 states require a state auto-IRA where no plan exists; a 401(k) match of 3% to 6% is the professional norm.

Termination and notice periods

There is no statutory probation period and none is needed: employment is at-will in 49 states, so either party may end it at any time for any lawful reason without notice. Montana is the exception and requires good cause after a 12-month probation. Notice obligations arise only from contract or from group layoff statutes.

• The reason is the risk. Dismissal for a protected characteristic (Title VII, ADA, ADEA, PWFA), for taking leave, for complaining or for union activity is unlawful. Employees have 180 to 300 days to file with the EEOC. Documentation and a consistent process are the practical protections.
• Final pay deadlines are state law. California requires immediate payment on dismissal and within 72 hours on resignation, with a waiting-time penalty of up to 30 days' wages. Massachusetts pays on the day of discharge, Colorado within hours, Texas within 6 days, New York by the next payday.
• Severance is contractual. Two to four weeks per year of service is common for professional staff in exchange for a release. A release signed by an employee aged 40 or over needs 21 days to consider and 7 days to revoke (45 days in a group program).
• COBRA follows. Employers with 20 or more employees must offer continued health coverage for 18 months at up to 102% of the premium; most states have mini-COBRA for smaller groups.
• Non-competes are a state question. The FTC's 2024 nationwide ban was set aside in court and abandoned in 2025. Non-competes are void in California, Minnesota, North Dakota, Oklahoma and Wyoming, enforceable only above income thresholds in Illinois, Oregon, Washington, Colorado, Virginia and others, and newly strengthened in Florida.

Can I use independent contractors?

Only where the person is genuinely running their own business: their own clients, schedule and tools, doing work that is not the core service you sell. Three tests can apply to the same worker. The IRS weighs behavioral control, financial control and the relationship of the parties. The Department of Labor applies an economic reality test under the FLSA, which it is rewriting in 2026 toward a two-factor test centred on control and opportunity for profit or loss. California, Massachusetts and New Jersey apply the strict ABC test, under which a worker is an employee unless the business proves all three prongs, and about 20 other states use it for unemployment insurance. Getting it wrong means both halves of FICA, unwithheld income tax, overtime and benefits back pay, state penalties of $5,000 to $25,000 per violation in California, and class action exposure. For anyone who works like an employee, an EOR is the compliant route.

The legal framework in brief

The United States has no national labor code. Federal statutes set a floor, each state legislates on top, and cities and counties add a third layer, so the rules that apply depend on where the employee physically works. The instruments you will hear most:

• Fair Labor Standards Act (FLSA). Federal minimum wage, overtime for non-exempt employees, exempt salary threshold of $684 a week, child labor and recordkeeping. Administered by the Department of Labor's Wage and Hour Division.
• Title VII, ADA, ADEA, PWFA and GINA. Anti-discrimination and accommodation duties at 15 employees (20 for age), enforced by the EEOC. Most states cover smaller employers, New York and California from the first employee.
• FMLA, ACA, ERISA and COBRA. Unpaid protected leave at 50 employees, the health coverage mandate at 50 full-time equivalents, benefit plan governance and continuation coverage at 20 employees.
• Immigration Reform and Control Act. Form I-9 for every hire; E-Verify mandatory for federal contractors and in Alabama, Arizona, Mississippi, South Carolina, Georgia, North Carolina, Florida and others. Sponsored routes are H-1B (lottery, 85,000 cap), L-1 for intra-company transfers, O-1, TN for Canadians and Mexicans and E-3 for Australians.
• WARN Act and state mini-WARN laws. Group layoff notice at 100 employees federally, lower and longer in California, New York and New Jersey.
• State wage and hour, leave and privacy statutes. Minimum wage, paid sick leave, paid family leave, daily overtime, meal breaks, final pay, pay transparency in a dozen states, fair chance hiring, salary history bans and non-compete limits. California, New York, Washington, Massachusetts, New Jersey, Colorado and Illinois are the most prescriptive.
• Data protection. No comprehensive federal law. Twenty states have consumer privacy statutes but only California's CCPA/CPRA covers employee data. The Fair Credit Reporting Act governs background checks, Illinois BIPA governs biometrics, and New York City, Illinois and Colorado regulate AI in hiring decisions.
• Authorities. IRS, Social Security Administration, Department of Labor, USCIS, EEOC and NLRB federally, plus each state's labor department, revenue agency and unemployment insurance fund.

Where the talent is

About 342 million people and a civilian labor force of 170 million, with unemployment at 4.2% in September 2026 and median full-time earnings of $1,232 a week. The deepest market in the world for senior technology, finance, health care, life sciences and professional services talent, and the most expensive: Bay Area, Seattle and New York salaries run 25% to 45% above the national median, while Texas, the Southeast and the Midwest sit 10% to 20% below. About 23% of workers telework, so multi-state remote teams are the norm. Six time zones span the states, and English is the working language with Spanish-language notices commonly needed in California, Texas, Florida, New York and Arizona.

This guide is general information, not legal, tax or immigration advice. Social Security wage bases, state unemployment rates, state minimum wages, paid leave contribution rates and benefit plan limits are revised every January and some mid-year, and federal rulemaking on overtime, contractor status and immigration fees was in motion in 2026. Confirm current figures with a qualified adviser or with Dryft. Last reviewed November 2026.