U.S. payroll services for international employers, including setup, registrations, and multistate compliance.

Simplified U.S. payroll for growing teams

We handle the complexity of U.S. payroll so you can focus on people, not paperwork. From setup and registration to compliance reviews and PEO transitions, we make sure your team is paid accurately, your filings are complete, and your systems scale with your growth.

U.S. payroll infrastructure setup, including EIN registration and state tax ID configuration.

U.S. Payroll Setup & Registration

We set up your payroll infrastructure from the ground up - EIN registration, state tax IDs, and system configuration included. Our team ensures every jurisdictional requirement is met so payroll runs smoothly from your very first hire.

PEO Advisory & Transition Support

We help you assess, join, or exit Professional Employer Organizations with clarity. Whether you’re comparing PEO options or planning a transition to an in-house model, our advisors guide you through every financial, legal, and operational step.

transition from PEO to in-house payroll models for growing companies.
proactive payroll compliance audits and multi-state tax filing verification.

Compliance & Audit Assistance

U.S. payroll laws evolve quickly - especially across multiple states. We perform proactive reviews to verify filings, tax rates, and classifications, helping you avoid penalties and maintain compliance at every stage of growth.

Frequently asked questions

U.S. payroll works differently than most international employers expect. From tax IDs to multi-state filings, the details matter. Here are the questions we get asked most by international teams managing U.S. payroll for the first time.

What is the legal process to hire my first U.S. employee in 2026?

Hiring a U.S. employee requires establishing a localized payroll infrastructure, starting with a federal Employer Identification Number (EIN). Unlike the centralized systems in many European countries (such as the URSSAF in France), the U.S. requires employers to register independently with both federal agencies (IRS) and the specific state agencies where the employee physically resides to remit state income taxes and State Unemployment Insurance (SUI).

Beyond tax registration, employers are legally mandated to secure Workers' Compensation insurance before the employee's first day of work. Operating without this state-mandated insurance - or failing to properly register the company in the employee's home state - exposes the foreign parent company to severe financial penalties and immediate stop-work orders.

Do I need to issue a formal employment contract to a U.S. worker?

In the United States, formal, fixed-term employment contracts (similar to a French CDD or CDI) are exceedingly rare for standard employees. Instead, U.S. companies issue a concise "Offer Letter" that legally outlines the starting salary, job title, expected start date, and explicitly establishes the employment relationship as "At-Will."

While standard employees operate under offer letters, formal employment agreements are typically reserved for high-level executive roles. These executive contracts are highly detailed and legally necessary to define complex compensation structures, such as equity vesting schedules, non-compete clauses, and specific severance packages.

What does "At-Will Employment" mean for European founders?

"At-Will Employment" is the default labor law standard in 49 of the 50 U.S. states (with Montana being the sole exception), dictating that either the employer or the employee can terminate the working relationship at any time, for any legal reason, without prior notice. This means a U.S. subsidiary can legally dismiss an underperforming employee immediately without the mandatory warning periods, required justifications, or statutory severance payouts common in European labor laws.

However, "At-Will" does not provide absolute immunity from lawsuits. A termination is still strictly illegal if it violates federal anti-discrimination laws (such as firing someone based on race, gender, or age) or constitutes retaliation against an employee acting as a whistleblower. Terminated employees frequently leverage these exceptions to file wrongful termination claims, making comprehensive HR documentation essential.

Can a foreign startup hire U.S. workers as independent contractors to save costs?

While hiring U.S. workers as 1099 independent contractors bypasses payroll taxes and benefits, the U.S. Department of Labor (DOL) strictly regulates this classification through the "economic reality test." If your company dictates the worker's daily schedule, provides their laptop, or integrates their work as a core, permanent function of the business, they are legally classified as W-2 employees, regardless of what a signed contract states.

Misclassifying a legal employee as an independent contractor is one of the highest-risk compliance errors for international startups. When discovered during a state or federal audit, the company is held liable for years of backdated payroll taxes, unpaid overtime wages, workers' compensation premiums, and severe punitive fines from the IRS.

What is the difference between Exempt and Non-Exempt U.S. employees?

Under the Fair Labor Standards Act (FLSA), "Non-Exempt" employees are legally entitled to receive overtime pay at 1.5 times their regular hourly rate for any hours worked beyond 40 in a single workweek. "Exempt" employees are typically salaried professionals, managers, or executives who are paid above the federal FLSA salary threshold (which increased significantly in 2025/2026) and are explicitly excluded from these overtime pay requirements.

Correct classification relies on both the worker's guaranteed salary and their actual daily job duties passing the FLSA's strict "duties test." Falsely classifying a worker as Exempt merely to avoid paying overtime is a primary trigger for class-action lawsuits and DOL investigations, resulting in massive back-pay settlements for U.S. subsidiaries.

Can a U.S. subsidiary pay its employees once a month?

While paying salaries on a monthly basis is the standard operational procedure across Europe, it is frequently illegal in the United States. State labor laws dictate strict pay frequency requirements, with major commercial hubs like New York and California generally requiring that non-exempt employees be paid on a semi-monthly (twice a month) or bi-weekly (every two weeks) schedule.

Failure to adhere to a state's specific pay frequency laws triggers immediate wage theft violations and daily accumulating penalties. Employers must configure their U.S. payroll software to automatically process payments according to the strict legal calendar of the exact state where the employee physically performs their work.

Can a U.S. subsidiary hire unpaid interns for summer work?

Generally, any individual performing productive work for a U.S. for-profit business must be classified as an employee and paid at least the applicable minimum wage (which varies heavily by state and city, far exceeding the $7.25 federal minimum in places like New York or California). The U.S. Department of Labor only allows legally unpaid internships if the arrangement passes the strict "primary beneficiary test."

To pass this federal test, the internship must function primarily as an educational training program (often tied to university credit) where the intern's work does not displace regular employees or provide an immediate, tangible economic advantage to the employer. If an international startup hires an unpaid intern to perform standard, day-to-day business tasks, they are violating federal minimum wage laws.

What are the mandatory employer payroll taxes in the U.S. for 2026?

When calculating the fully loaded cost of a U.S. employee, foreign founders must account for mandatory employer-side payroll taxes, collectively known as FICA (Federal Insurance Contributions Act), as well as federal and state unemployment taxes. Employers are legally required to pay a 6.2% Social Security tax (up to an annual wage base limit) and a 1.45% Medicare tax on every employee's gross wages.

In addition to these federal obligations, the employer must pay State Unemployment Insurance (SUI) taxes, the rates for which vary dramatically depending on the state and the company's historical claim rate. Combined, these mandatory employer taxes typically add an additional 8% to 11% overhead on top of the employee's gross base salary, before factoring in health insurance or retirement benefits.

What Orbiss Means for Your Team

We handle onboarding, multi-state compliance, benefits and deductions, and all federal/state filings with clear audits and reminders built in. You get dashboards and decision-ready reports (gross-to-net, payroll taxes, labor cost trends) that make cash planning and reviews simple.

Ready to Get Started?

Whether you’re launching in the U.S. or expanding an existing entity, our team can help you navigate every financial, tax, and compliance step with precision.

Our cross-border experts will review your needs, outline your best options, and help you chart the most efficient path to growth in the U.S. market.
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