As a UK or European company looking to expand into the US market, hiring staff is a crucial step in establishing a successful presence. However, the US employment landscape is complex and governed by federal, state, and local laws, making it essential to understand these laws and regulations to ensure compliance and avoid potential liabilities.
In this article, we’ll explore the key considerations and differences you need to know when hiring staff in the US. From employment laws and visa requirements to benefits and compensation, cultural and language differences, and staff costs, we’ll cover the essential factors to consider when building your US workforce.
Compliance with Employment Laws
First and foremost, it’s essential to ensure compliance with US employment laws, including the Fair Labor Standards Act, the Americans with Disabilities Act, and the Family and Medical Leave Act. As Tom Thorelli, managing partner at Chicago based attorney Thorelli Associates, notes:
“Failure to comply with US employment laws can result in significant financial penalties and reputational damage. It’s crucial for UK and European companies to understand the complexities of US employment law and take steps to ensure compliance from the outset.”
Tom Thorelli
Managing Partner, Thorelli & Associates
Additionally, you’ll need to consider visa requirements, tax obligations, labour laws and unionisation, data protection and privacy, and state-specific laws. When it comes to visa applications, it’s essential to think ahead. As Tom Thorelli states:
“We always advise our clients to plan well in advance when considering visa applications. The US visa process can be complex and time-consuming, and delays can have significant consequences for your business. By thinking ahead and seeking expert advice, you can ensure that your visa applications are processed smoothly and efficiently, and that your business can operate without interruption.”
Tom Thorelli
Managing Partner, Thorelli & Associates
Benefits and Compensation
US employees typically expect a different set of benefits, such as health insurance, 401(k) or other retirement plans, and paid time off. You’ll also need to consider offering flexible work arrangements, wellness programmes, and professional development opportunities to attract and retain top talent.
Cultural and Language Differences
Cultural and language differences can also impact your hiring process. US communication styles tend to be more direct and assertive, whereas UK communication styles are often more reserved and polite. Be prepared to adapt to these differences to ensure a smooth hiring process.
Staff Costs
Salary and package expectations can vary significantly between the UK and US. US salaries tend to be higher, particularly in industries like technology, finance, and healthcare. Consider offering variable pay structures, including bonuses, commissions, and stock options, to attract top talent. As our US accounting partner, Frazier & Deeter notes:
“Budgeting for staff costs in the US can be a shock for UK and European companies. Not only are salaries higher, but benefits, taxes, and other employment-related costs can add up quickly. It’s essential to factor these costs into your budget from the outset to avoid costly surprises down the line. We’ve seen companies underestimate US staff costs by as much as 20-30%, which can have a significant impact on their bottom line.”
Tom Thorelli
Senior Manager – R&D, Frazier & Deeter
Developing a Hiring Strategy
When it comes to hiring staff in the US, it’s essential to develop a strategy that meets your company’s specific needs. Hiring one person is very different from hiring several, and the approach you take will depend on your business goals, industry, and the state-specific laws that apply. As Foothold America, our US employment partner, notes:
“We’ve seen many UK and European companies struggle to navigate the complexities of US employment law and compliance. Our Employer of Record (EOR) and Professional Employer Organisation (PEO) services can help simplify the process and ensure compliance, allowing you to focus on growing your business in the US.” Consider whether to hire directly, partner with a PEO, or use an EOR service. The key is to find a solution that allows you to manage your workforce effectively, ensure compliance with US laws and regulations, and minimise risk.”
Laurie Spicer
US Expansion Adviser, Foothold America
By understanding these key considerations and differences, you can set your business up for success in the US market and avoid costly mistakes down the line. Remember to stay flexible, adapt to cultural and language differences, and develop a hiring strategy that meets your company’s unique needs. With the right approach, you can build a talented and compliant workforce in the US and drive business growth.
