Employer of Record & PEO in the United States
Hire & manage teams remotely in the United States without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
How NNRoad Employment & PEO Services Work?
NNRoad provides professional employment organization (PEO) & employer of record (EOR) services for companies looking to hire and manage teams in the United States. Registering a legal entity in the United States as a means for employment is an outdated practice that takes both time (months) and money (thousands of USD). NNRoad’s employer of record and PEO services enables companies to hire and manage employees in the United States in full accordance with local labor laws in under a week.
Employer of Record in the United States
Employer of Record (EOR) services are for companies who do not have a legal entity in the United States, but who want to hire in the United States. Employment and full liability are outsourced to NNRoad.
➊ You interviews & select the candidates you want to hire in Malaysia.
➋ NNRoad arranges a local labor contract with your new employee.
➌ NNRoad arranges a service contract between your organization & NNRoad.
➍ NNRoad organizes, manages & processes payroll in Malaysia in full compliance with local employment laws.
➎ You maintain a normal working relationship and manage your team in Malaysia while NNRoad manages payroll & HR liabilities.
- Recruiting process outsourcing
- Hiring of employees/Local labor contracts
- On-boarding and off-boarding employees
- Complete payroll solution and benefit administration
- Employee management – Time keeping, bonus and allowance management, expense and claims
- Mandatory insurance compliance
- Payment management (Invoicing customers/clients and vendor payments)
- Working VISA application assistance
- US federal and state individual income tax reporting (US and non US employees)
Payroll & PEO in the United States
Professional Employment Organization (PEO) services are for companies who have a legal entity in the United States, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.
➊ You interviews & select the candidates you want to hire in the United States.
➋ NNRoad organizes, manages and processes payroll for your local employees in full compliance with local employment laws.
➌ You maintain a normal working relationship and manage your team in the United States while NNRoad manages payroll & HR compliance.
- Set up and maintenance of all employee records
- New hire information gathering for government agencies (worker eligibility)
- Payroll calculation and processing/disbursement
- Payroll tax calculation, withholding of tax (Social Security, Medicare, Unemployment, Disability Insurance, etc.) & benefit contribution
- Federal and State payroll tax reporting
- W-2 and 1099 year end processing
- Obtainment of required workers’ compensation insurance
- Providing health insurance coverage, if required
Advantages of NNRoad's United States Employment Services
- With EOR/PEO solutions you can manage client meetings, sales, quality control, marketing, R&D and customer support without a local company in the United States.
- Pay as you go
- Dedicated account manager – One point of contact for multiple locations
- Employment & termination processing
- Complete payroll solution and statutory benefit according to local laws
- With EOR/PEO solutions you can hire staff while waiting for the registration of your company in the United States.
- NNRoad only works with professional locally licensed partners
- GDPR compliant
- NNRoad manages employee record timekeeping, bonus and allowance, expenses claims and personal leaves according to local law.
- NNRoad provides foreigner VISA application services, if needed
Employment Compliance in the United States
Taxes & Payroll in the USA
Employee Income Taxes:
Individual income tax rates in the USA are based on progressive tax brackets which varies on whether the individual is single, chooses to file jointly with a married partner, or is the head of a household.
Employees in the USA are also subject to a state tax. This is a separate tax imposed by the state the employee resides in. Each state sets its own state tax rate. 8 out of the 50 states do not have a state tax.
Tax Brackets for single individual tax payers
10%: 0 – 10,275 USD
12%: 10,276 – 41,775 USD
22%: 41,776 – 89,075 USD
24%: 89,076 – 170,050 USD
32%: 170,051 – 215,950 USD
35%: 215,951 – 539,900 USD
37%: >539,900 USD
Tax Brackets for Married tax payers filing jointly
10%: 0 – 20,550 USD
12%: 20,551 – 83,550 USD
22%: 83,551 – 178,150 USD
24%: 178,151 – 340,100 USD
32%: 340,101 – 431,900 USD
35%: 431,901 – 647,850 USD
37%: >647,851 USD
Tax Brackets for head of household tax payers
10%: 0 – 14,650 USD
12%: 14,651 – 55,900 USD
22%: 55,901 – 89,050 USD
24%: 89,051 – 170,050 USD
32%: 170,051 – 215,950 USD
35%: 215,951 – 539,900 USD
37%: >539,900 USD
Single taxpayer yearly income = 70,000 USD
22% * 28,224 = 6209
12% * 31,499 = 3780
10% * 10,275 = 1028
6209+3780+1028 = 11,017
Yearly income tax = 11,017 USD
Employer Costs in the USA
Employers in the USA must contribute to the worker’s compensation program. This compensation is a medical insurance that varies from state to state and worker class codes. Contact us for more details regarding your specific enquiry.
Social security tax is charged on all income up to a defined limit. Together with Medicare taxes, these are also known as FICA Taxes (Federal Insurance Contributions Act).
The rate (for 2020 and 2021) is 12.4% of income, with a maximum limit of $137,700 for 2020 (rising to $142,800 in 2021). This is split between employee and employer, with 6.2% taken out of employee pay and 6.2% contributed by the employer.
Working Hours in the USA
Working Hours per Week
The work week in the United States is 40 hours per week, typically from 9am to 5pm Monday to Friday. According to the Fair Labor Standards Act (FLSA), nonexempt employees 16 years old or older must receive overtime pay (1.5 times standard pay rate) for hours worked over 40 per week.
Benefits & Insurance in the USA
Employers with 50 or more employees are required to offer affordable healthcare coverage insurance plans. These businesses must act in accordance with the Affordable Care Act (ACA) or be compelled to a shared responsibility payment by the Internal Revenue Service (IRS).
Benefits in the USA are a common appeal for companies who wish to attract high quality talent. These benefits include but are not limited to:
- Medical insurance
- Stock options
- Dental insurance
- Pension fund (called the 401k in the USA)
Termination Laws in the USA
Employees in the United states may be terminated at any time, without notice & for any reason as long as it is not for discriminatory reasons such as race, gender, or sexual orientation. The same applies to employees, who can quit at any time with or without giving a notice.
Unless otherwise stated in the employee’s labor contract, there are no laws in the United States that entitle terminated employees to severance packages.
Public Holidays in the USA
Public Holidays in the United States
There are 10 public holidays in the USA, however employers are not obligated to give time off, paid leave or overtime pay for these holidays.
- New Years Day – Jan 1
- Birthday of Martin Luther King, Jr. – Jan 15
- George Washington’s Birthday – Feb 22
- Memorial Day – Last Monday of May
- Independence Day – Jul 4
- Labor Day – First Monday of Sep
- Columbus Day – Oct 10
- Veterans Day – Nov 11
- Thanksgiving Day – 4th Thursday of Nov
- Christmas Day – Dec 25
Paid Leave in the United States
Employees in the USA are not entitled to paid leave by law, however 14 days annual paid leaves per year is standard.
Employment Contract in the USA
There is no legal requirement in most states for a formal employment contract. Most employment in the US is carried out on an ‘At-Will’ basis, meaning that it can be terminated at any time. More formal contracts, with notice periods, are generally only used for some senior positions.
The majority of employment in the US takes place on an ‘At-Will’ basis. This means employees can be terminated at any time, for any reason, by either employee or employer.
Types of Leaves in the USA
There is no federal (countrywide) law that mandates sick pay or leaves. But several states specify sick leave requirements.
There is no requirement in the US to provide paid maternity leave. The Family and Medical Leave Act states that employers with 0 employees or more must provide up to 12 weeks of leave and protect the job of the new mother or adoptive mother. Additionally, several states have adopted laws extending this requirements to smaller companies, but the majority of small companies in the USA do not need to offer paid or unpaid maternal leave.
Immigration Laws in the USA
Foreign workers can be granted a work visa in the United States by:
- Having a job offer in the USA
- Having the hiring employer approve a petition by the U.S Citizenship and Immigration Services (USCIS)
- Getting Labor certification approval by the Department of Labor (DOL)
- Complete the Online Nonimmigrant Visa Application (Form DS-160)
- Schedule your interview at your nearest US consulate