The first US hire often decides whether an expansion succeeds. Wrong profile, wrong status, underestimated cost: it is one of the most cited causes of failure. French Accelerator, which helps French companies in the US, cited in 2017 subsidiary failure rates of 50% to 80% depending on the source, with hiring among the main mistakes.

Four ways to have someone work for you in the US

  • An independent contractor: flexible and fast, but the risk of reclassification is real if the person in practice works like an employee (hours, tools, exclusivity). The IRS and the Department of Labor apply their own tests.
  • An employer of record (EOR): a provider formally employs the person for you, without you having a US company. Convenient to start, more expensive over time.
  • A PEO: your US company is the employer, and the PEO handles payroll, benefits and compliance under co-employment.
  • Direct hiring by your subsidiary with a payroll provider: the most economical option once the team is in place.

Employment law very different from Europe

  • Most states apply at-will employment: either party can end the relationship without cause. Montana is the exception, and anti-discrimination laws apply everywhere.
  • There are no sector-wide collective agreements or European-style permanent contracts: you sign an offer letter setting out the role, pay and benefits.
  • The federal minimum wage is $7.25 an hour, but many states and cities set a higher minimum, and overtime depends on whether the role is “exempt” or “non-exempt”.

The real cost of an employee

On top of salary, expect in particular:

  • federal employer taxes (Social Security 6.2% and Medicare 1.45%), plus federal and state unemployment insurance;
  • workers’ compensation insurance, mandatory in most states;
  • health insurance: the federal obligation to offer it only applies to employers with 50 or more full-time employees, but candidates expect it in practice;
  • often a retirement plan (401(k)) and commissions for sales roles.

Formalities not to miss

  1. Verify the employee’s right to work with Form I-9, completed no later than the third business day after the start date.
  2. Obtain an employer identification number (EIN) and register with the state for payroll and unemployment insurance.
  3. Report the new hire to the state (“new hire reporting”).
  4. Set up payroll and federal and state withholding.

Choosing the first profile

  • Hire first someone who knows your sales channel and has a buyer network, rather than a generalist.
  • Set clear variable pay tied to measurable targets.
  • Don’t lease an office too early: many salespeople work remotely across a large territory.
  • Expect higher turnover than in Europe, and document processes from day one.
Key takeaway

The right status depends on the project stage: contractor or EOR to test, subsidiary and direct hire once the business is validated. Either way, the total cost of an employee is well above salary and must be in the budget from the start.

Frequently asked questions

Can I hire in the US without a US company?

Yes, through an employer of record (EOR), which formally employs the person on your behalf. Convenient to start, but more expensive than direct hiring in the long run.

Can a US freelancer replace an employee?

Only if they are genuinely independent. If the person works like an employee (set hours, tools provided, exclusivity), the risk of reclassification by the IRS or Department of Labor is high.

How much does a US employee cost on top of salary?

Add employer taxes (including 7.65% for Social Security and Medicare), unemployment insurance, workers’ compensation, and in practice health insurance and benefits to attract candidates.

Sources

External links checked on October 24, 2026.

This guide is not legal advice. Employment rules vary by state: have your contracts and payroll validated by a US attorney or provider.

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