The American Dream: A Complete Suite of Workforce Solutions to Drive Growth in the US
The US market forces international organizations to navigate an intricate regulatory landscape. Papaya Global has stepped up to the challenge
Rivka Abramson| Dec 07, 2023
- The US offers international companies an ideal but complex environment: the biggest economy, ready capital financing, and a pro-business legal system.
- While most developed countries provide universal healthcare, statutory retirement plans, and paid parental leave, in the US, access to these benefits is often tied to employment.
- Employers operating in multiple states must keep up with varied and sometimes inconsistent local laws and regulations, making compliance extremely challenging.
- Relying on innovative technology, integrations with leaders in the HR and payroll space, and a team of designated country experts, Papaya Global provides its client base with a holistic solution for payroll, PEO, and EOR across all fifty states.
Louis Needleman, the son of Eastern European immigrants, was a successful businessman in Newport, Vermont, where he settled in the 1920s. In many ways, he embodied the American dream. Needleman’s life has inspired his grandson, Matthew Lee Sawyer, managing director of a global consulting firm and adjunct professor at Columbia University and NYU, who decided to write a book that might help others achieve their American Dream.
The book, “Make It In America: How International Companies and Entrepreneurs Can Successfully Enter and Scale in US Markets,“ provides insights, tools, and practical advice on various topics. It also includes case studies of businesses from every continent that tried to enter the American market.
The US, Sawyer contends, offers international companies an ideal environment: the biggest economy, ready capital financing, and a pro-business legal system. However, foreign executives and entrepreneurs often underestimate the complexity of doing business in the US. “There are a lot of nuances,” said Sawyer. “You need local experts, but even more important is having people that you can trust.”
That’s especially true in workforce management. With its labyrinthine tax system, varying federal, state, and local labor laws, unique worker classification, and document retention guidelines, the US market forces international organizations looking to expand their business to navigate an intricate regulatory landscape – and, in the case of European companies, adjust to a whole new concept of employment.
The benefits of benefits
Unlike European countries, which generally have robust employment protections, working relationships in the US are typically at-will. In this concept, employers can end the relationship at any time and for any reason, provided it is not discriminatory. This is one of the most significant differences between the US and Europe, where companies must give employees notice before terminating their employment and have a valid reason for doing so.
Another thing that separates the US is employment benefits. While most developed countries provide universal healthcare, statutory retirement plans, and paid parental leave, in the US, access to these benefits is often tied to employment. As a result, employment benefits play a pivotal role in hiring and retaining top talent in the US, requiring companies to offer competitive packages.
To be truly competitive, these benefits packages need to include paid time off (PTO). The US is the only OECD country where workers are not entitled to paid leave under the law, but most employees expect to receive between 10 and 15 days of PTO per year. These expectations can change depending on geographic location; companies in southern states, for example, only offer 8.4 PTO days on average.
The differences between states don’t end there. For instance, the Fair Labor Standards Act (FLSA) requires employers to pay a premium of 1.5 times the regular rate for all hours worked over 40 in a workweek, but some states have legislated daily overtime laws as well. FLSA also established a federal minimum wage before local jurisdictions got involved; the San Francisco Bay Area alone has 23 different minimum wage grades.
“Employers operating in multiple states now face the challenge of keeping up with varied and sometimes inconsistent local laws and regulations,” said Roger Quillen, former chairman & managing partner with labor and employment law firm Fisher Phillips. “This makes compliance extremely difficult.”
The state of play
This difficulty extends to the issue of pay transparency as well. “Over the last few years, eight states and at least one city have passed pay transparency laws,” said Emily M. Dickens, chief of staff, head of public affairs, and corporate secretary at the Society for Human Resource Management (SHRM). “Compliance varies from state to state, making it difficult for multistate companies to comply and for workers to get a clear picture of compensation.”
This is where Papaya Global, the world’s leading payroll and payments platform, comes in. Relying on innovative technology, integrations, and partnerships with leaders in the HR and payroll space – such as Namely, Bob, Zenefits, and NetSuite – and a team of designated country experts, Papaya provides its client base with a holistic solution for payroll, PEO, and EOR across all fifty states.
Recognized as a leader in global EOR services, Papaya has a network of highly-rated local partners – with an average of 33 years of experience in the field – that can legally employ workers on your behalf, eliminating the need for establishing legal entities in the US. In this model, enterprises have a single point of contact as they scale, saving them the trouble of managing numerous local partners.
For clients who already have legal entities in the US, Papaya provides PEO and payroll solutions for all employment models – US taxpayers (W9), non-US taxpayers (W-8BEN), and independent contractors (1099 workers). This includes competitively priced medical and benefit plans for each state, which can be tailored to the business’s needs. In other words, everything an international business needs to make it in America. Talk to us so you, too, can streamline payments and payroll for your US-based worker.