Employer of Record in the United States: 20 Providers Compared (2026)

Employing someone in the United States: key facts

US employment law runs on three levels — federal, state and sometimes city — and the state you hire in changes almost every number below; figures name California, New York and Washington as the states with the clearest 2026 data, with Texas and Florida as low-regulation counterpoints.

Minimum wage

The federal floor applies everywhere a state doesn’t set its own higher rate; most states and several cities do.

Employer contributions

Every state also runs its own State Unemployment Insurance (SUI/SUTA) at rates and wage bases that vary by state and industry — the table uses California’s new-employer figures. FUTA’s standard net rate is 0.6%, but California has been a federal “credit reduction” state every year but one since 2021 — rising from 0% in 2021 to 1.2% in 2025, plus a further 1.5% on the DOL’s confirmed 2026-01-15 preliminary list, for a corrected net rate of 2.1% (not the outdated 0.6% baseline). A further Benefit Cost Rate add-on of up to 3.8% is possible and won’t be finalized until after 2026-11-10, which could push net FUTA as high as 5.9% (payroll.org, checked 2026-09-30). Nearly every state also mandates employer-paid workers’-comp insurance at industry-rated class rates — Texas is the one state where private employers may opt out.

Working hours and overtime

The federal exempt-salary floor is USD 684/week (USD 35,568/year) — the 2019 threshold, restored 2026-05-14 by a DOL technical amendment after courts vacated the Biden-era rule that would have raised it to USD 43,888/year; the highly-compensated-employee threshold is USD 107,432/year. Several states set higher exempt-salary floors than the federal one, and an employer must use whichever is higher.

Annual leave and public holidays

• No federal or (with narrow city exceptions) state law requires private employers to give paid vacation or paid holidays — both are a matter of employer policy, not statute (dir.ca.gov, checked 2026-09-30).
• California is the exception that bites an EOR specifically: earned vacation vests as a form of wages as it accrues, “use-it-or-lose-it” policies are illegal, and any unused earned vacation must be paid out in full on termination (dir.ca.gov, checked 2026-09-30).

Probation

• No statutory “probationary period” exists federally or in most states — employment is at-will from day one in 49 states, all but Montana (dol.gov, checked 2026-09-30).
• Employers commonly set a contractual 90-day (sometimes 30-180 day) introductory period for internal purposes like benefits eligibility, but it carries no separate legal protection or termination right beyond ordinary at-will status.

Notice and severance

• No federal or (in the large majority of states) state law requires advance notice before an ordinary, individual at-will termination.
• The WARN Act requires 60 days’ written notice only for a qualifying mass layoff or plant closing — generally, an employer with 100+ full-time employees affecting 50+ employees at one site within 30 days (dol.gov, checked 2026-09-30).
• California’s Cal-WARN is stricter: it applies at 75+ employees, triggers at a 50+-employee layoff in any 30-day period, and has no minimum-employer-size percentage test.
• No federal or (in most states) state law requires severance pay on an ordinary termination; a missed WARN notice instead creates back-pay liability for each day of the violation, up to 60 days, which resembles severance without being one.

13th salary and bonuses

• No US jurisdiction mandates a 13th-month or other statutory annual bonus; any bonus is contractual (dol.gov, checked 2026-09-30).

Mandatory benefits

• Statutory employer-funded programs are FICA (Social Security + Medicare), federal and state unemployment insurance (FUTA/SUTA), and — in nearly every state — employer-paid workers’-compensation insurance.
• No federal mandate requires employer-paid health insurance below the ACA’s Applicable Large Employer (50+ full-time-equivalent) threshold — a large EOR’s own book of business generally clears that bar regardless of the client’s size (see legality section).
• California requires every employer with at least one W-2 employee and no qualifying retirement plan to facilitate CalSavers enrollment — extended down to 1-4-employee employers from 2026-01-01, with penalties of USD 250-750 per eligible employee (calsavers.com, checked 2026-09-30).
• California also mandates paid sick leave and paid family leave, the latter funded through employee-paid SDI/PFL contributions, not an employer cost line.

Work permits

• A non-US-citizen, non-green-card worker generally needs employer-sponsored work authorization (H-1B, L-1, O-1, TN, E-3, etc.) or independent status such as an EAD.
• USCIS requires the petitioning employer to prove an actual “employer-employee relationship” — the right to hire, pay, fire, supervise and control the work — for H-1B and most sponsored petitions (uscis.gov, checked 2026-09-30).
• A pure EOR, which by design lets the client direct day-to-day work, typically can’t make that showing; several EOR vendors market EOR as an alternative to US visa sponsorship (hire the person in their home country) rather than a channel into one.
• In practice, EOR works cleanly for US citizens, green-card holders and people who already hold independent work authorization — it isn’t a reliable route to a new US work visa.

Currency and payroll

• Payroll runs in US dollars (USD).
• No single federal law sets pay frequency — it’s set state by state; California requires semi-monthly pay for most employees under Labor Code §204, and some states require weekly pay for certain manual or day-rate workers (dol.gov, checked 2026-09-30).
• An EOR must follow the pay-frequency rule of the state where the employee actually works, not the state where the EOR itself is incorporated.

Is Employer of Record legal in the United States?

Allowed, with limits. No federal or state statute names and bans the EOR model, and hiring a US employee through an EOR instead of opening a US entity is common and broadly legal in most states. The real constraints are domestic co-employment doctrine and a handful of state licensing statutes written for “employee leasing” or PEOs that regulators and law firms argue can reach single-client EOR arrangements even though EOR providers don’t call themselves PEOs:

• Florida Statutes Chapter 468, Part XI defines “employee leasing” as any arrangement where a leasing company assigns employees to a “client company” and allocates direction/control between them — with no requirement the client already have its own workforce. A narrow carve-out exists only for employees performing work “separate and divisible” from the client’s primary business, which typically doesn’t cover an EOR-placed employee doing the client’s core work. Operating unlicensed is a Chapter 468 violation (leg.state.fl.us, checked 2026-09-30).
• Texas Labor Code Chapter 91 requires a licence to offer “professional employer services” through a “coemployment relationship.” Unlike Florida, Texas’s definition is anchored to that coemployment concept rather than simply “is a client and receives employees” — whether a single-employee, foreign-client EOR arrangement counts is a matter of statutory interpretation with no definitive court ruling found (statutes.capitol.texas.gov, checked 2026-09-30).
• IRS/DOL joint-employer doctrine. Under the common-law employer test (IRS Publication 15-A) and DOL/NLRB joint-employer guidance, whichever entity actually directs and controls the work can be found a joint employer regardless of what the contract calls it — the doctrinal basis for co-employment risk in domestic US EOR arrangements generally (irs.gov, checked 2026-09-30).

For the client, three risks follow directly: an arrangement later found to be unlicensed Florida “employee leasing” leaves the client’s own cost protections on shaky ground, since the leasing was never validly licensed in the first place; enough client-side control over day-to-day work can support a joint-employer finding that pulls a foreign client with no US entity into US wage-and-hour, workers’-comp or unemployment liability; and a large EOR is very likely an Applicable Large Employer under the ACA, so its ACA-compliant coverage obligations — and the cost of them — are baked into its fee whether or not the client asked for health insurance (irs.gov, checked 2026-09-30).

Who actually employs your hire in the United States

Vendors describe their entity model brand-wide (“100% owned,” “150+ countries”) far more often than they confirm it for the US specifically. Here’s what each vendor’s own US-facing page — or, where available, a registry — actually says:

Eleven of these 20 don’t say whether their US employing entity is their own or a partner’s — including Oyster, Multiplier and Safeguard Global, three of the more prominent names in the category. That matters because it decides who’s actually on the hook if payroll, tax withholding or a termination go wrong, and because none of the seven “own entity” claims here was independently verified against a Delaware or California Secretary of State filing — they’re first-party marketing statements, not registry records. Before signing, ask the vendor directly: “Is the entity that will employ my hire in the US wholly owned by you, and can you name and prove it?”

How to choose an EOR in the United States

Need the clearest first-party evidence of entity ownership? Deel names a wholly-owned US subsidiary that processes payroll through its own engine, and Remote states flatly that it owns its US legal entity — both also publish a US-specific price. Neither claim is backed by a public registry filing in this data, so “clearest” here means strongest first-party wording, not registry proof.

Hiring into Florida or Texas, where state PEO-style licensing is a live question? No vendor in this set discloses a state staffing or PEO licence for the US. Rippling and G-P at least draw an explicit line between their EOR product and state PEO frameworks on their own US pages — worth raising directly with any vendor before a Florida or Texas hire.

Weighing price against a country-specific figure? Skuad discloses the lowest confirmed US-specific price, $199/month. Native Teams’ banner price is lower, from $99/month, but its dedicated US page doesn’t confirm that figure applies to the US rather than being a generic global rate.

Need per-state depth because you’re scaling across several states? Remote People publishes separate EOR pages for California, New York, Washington, Pennsylvania and Ohio; Playroll links out to its own New York, California, Texas and Florida guides; Rippling’s US guide itself covers pay-transparency law differences across six states (CA, CO, NY, WA, IL, DE).

What it costs to employ someone in the United States through an EOR

The EOR, not the client, is the legal employer, and every small-employer exemption is out of reach the moment payroll runs through its book of business. The figures below use California — one of the states our research covers in depth — at 2026 rates.

The same $50,000 California salary cost the employer $4,112 in statutory contributions in 2021 and $4,217 in 2026. The whole $105 rise is FUTA: California’s credit-reduction rate climbed from 0% in 2021 to 1.5% for 2026, while FICA, SUI and ETT stayed flat (irs.gov, payroll.org, checked 2026-10-01).

The EOR’s own fee is on top of the above. Published US-specific numbers in our data range from $199/month (Skuad’s discounted rate) to $699/month (Remote); Deel and G-P both quote a flat $599/month, and Borderless AI $579/month. Most other vendors publish only a global list price ($99–$699/month) or nothing at all, quote-based — Safeguard Global publishes no price for any product or country.

Hidden costs, where actually published: Borderless AI’s general pricing page states no setup fee and a $0 security deposit, against an industry norm it cites of $7,000–$20,000, though that specific claim isn’t confirmed as US-specific. RemoFirst states no setup fee, no minimum term and no termination fee globally. Playroll’s global policy is a refundable security deposit equal to one month’s salary per employee. No vendor discloses a US-specific setup fee, deposit, minimum term or termination fee — where the table above is blank, treat it as unpublished, not zero.

Assumptions: the table uses California, non-exempt or exempt office/IT-type roles, the state’s new-employer SUI rate (3.4%), and FUTA’s corrected 2.1% net rate rather than the possible-but-unconfirmed 5.9% ceiling; state-specific, industry-rated workers’-compensation premiums aren’t priced in.

When you don’t need an EOR

• A genuinely independent contractor. Cheaper and closer to the real relationship if the person sets their own hours and tools and can serve other clients. See how to pay contractors in the US and our hiring guide — several states, especially California’s ABC test, scrutinize this closely.
• Your own US entity. The only route if the hire needs a new H-1B or similar sponsored work visa, or if you’re hiring into a state like Florida or Texas where state licensing risk around EOR is an open legal question and you’d rather not depend on a vendor’s compliance posture.
• A PEO. Co-employment alongside an entity you already have, not a substitute for one. Justworks is the clearest example: its EOR product covers 21 other countries but excludes the US outright, where it sells only PEO to companies that already hold a US EIN. See our PEO glossary entry and EOR vs PEO.

What changed in 2026

• 2026-01-01 — Social Security wage base rises to $184,500 (from $176,100); maximum employer OASDI contribution per employee rises to $11,439.
• 2026-01-01 — California SDI (employee-paid) withholding rate rises to 1.3%, still uncapped.
• 2026-01-01 — Every California employer with at least one W-2 employee and no employer-sponsored retirement plan must register for (or certify exemption from) CalSavers — the mandate now reaches employers with 1–4 employees.
• 2026-01-01 — California’s statewide minimum wage rises to $16.90/hour; New York rises to $17.00 (NYC/Long Island/Westchester) or $16.00 (rest of state); Washington rises to $17.13, the highest state rate in the country.
• 2026-01-01 — California employers subject to the CCPA must begin conducting a privacy risk assessment before many activities involving employee, applicant or contractor personal information.
• 2026-05-14 — The US Department of Labor restores the 2019 FLSA white-collar exemption salary thresholds ($684/week standard, $107,432/year highly-compensated) after abandoning its appeal of the 2024 vacatur of the Biden-era rule.
• 2026-09-30 — Florida’s statutory minimum wage completes its Amendment 2 phase-in, rising to $15.00/hour statewide, in effect through 2027-12-31.
• Pending, after 2026-11-10 — California’s final 2026 FUTA credit-reduction rate: a confirmed 1.5% base reduction is already in the cost figures above, but a further Benefit Cost Rate add-on of up to 3.8% (net FUTA up to 5.9%) won’t be finalized until after this date.

How we built this page

Facts were collected and checked between 2026-09-30 and 2026-10-01 against primary federal sources where they were reachable (ssa.gov, irs.gov, uscis.gov), Wayback Machine copies where a source blocked automated fetches (dol.gov, dol.ny.gov), and state-government pages for California and Washington specifics (dir.ca.gov, edd.ca.gov, lni.wa.gov, floridajobs.org). Vendor entity claims were checked against each vendor’s own US-facing page; no Delaware or California registry filing could be independently confirmed for any named subsidiary in the time available, so “own entity” here means the clearest first-party statement found, not a verified registry record. The ranking above puts those first-party US-specific claims first, then partner-based vendors, then vendors that don’t disclose their US entity model at all. Nobody pays for placement on this page.