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Professional Employer Organization (PEO) in the US

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240 Views 0 Comments February 27, 2024

Employer of Record in the United States

GTS Nordic offers a Professional Employer Organization (PEO) solution in the United States that enables companies to expand their business without establishing a legal entity, and independent contractors to fulfil their assignments compliantly. Acting as the employer of record, GTS Nordic manages relocation, onboarding of remote employees and contractors, their payroll services, benefits, taxes, and more. Leveraging our extensive national network, we assist businesses in simplifying their expansion process across the U.S. This article discusses everything you need to know before working in the United States and how GTS Nordic can facilitate this process.

Population

331 million+

Currency

US Dollar (USD)

Capital

Washington, D.C.

Working in the United States

The employment structure in the United States is characterized by a combination of flexibility and protection for workers. The U.S. labor force is diverse, encompassing a wide range of industries and sectors. Education is highly valued, with a significant portion of the workforce holding a college degree. Remote work has become increasingly popular, making the United States an attractive place for global employment.

Contractors vs Full-Time Employees

The U.S. labor and employment laws recognize various types of employment. Full-time employees working a set number of hours are entitled to a comprehensive benefits package. Independent contractors in the United States may not have the same benefits, but they enjoy greater flexibility and potential tax advantages. GTS Nordic’s PEO services ensure that both contractors and full-time employees are managed compliantly according to U.S. laws.

Our U.S. Professional Employer Organization solution is built on our three core values:
trust, service & compliance…

— Jonas Lastein, CEO GTS Nordic USA

U.S. Employment

The digital transformation and widespread use of the internet have revolutionized how recruitment is conducted in the United States. Numerous job portals and social media platforms assist businesses in discovering talented candidates. Global HR teams leverage these resources to identify the best fit for their openings. For larger pools of candidates, payroll companies or staffing agencies might conduct initial screening tests. GTS Nordic is a proficient employer of record, offering comprehensive payroll services tailored to U.S. employment standards.

Professional Employer Organization (PEO) Partner in the United States

GTS Nordic provides a PEO solution that simplifies the business expansion process into the U.S. market. We support contract development, onboarding, and other hiring-related processes. Partnering with a PEO like GTS Nordic is crucial for companies looking to navigate the complexities of the U.S. labor market.

Employer Taxation Explanation
Corporate Income Tax Varies by state, applied to a company’s profits. Rates and brackets can significantly impact a business’s tax obligations.
Payroll Tax Includes Social Security and Medicare taxes, with both employers and employees contributing.
Tax Withholding Employers withhold taxes from employees’ paychecks for income tax obligations.
Social Security & Medicare Withholding Part of payroll taxes, specifically allocated for Social Security and Medicare funding.

Probation & Termination in the United States

In the United States, the probationary period is often outlined in the employment agreement between the employer and employee. While there’s no universal rule for the duration, it typically ranges from three to six months. The U.S. allows for relatively straightforward termination processes compared to other countries, with specific regulations varying by state. GTS Nordic ensures that all hiring and termination processes adhere to local laws and regulations.

Benefits of Working with GTS Nordic

Choosing GTS Nordic as your employer of record in the United States offers several benefits. We manage all aspects of employment, including compliance with local labor laws, payroll, and benefits administration. This allows companies to focus on their core business activities while expanding their presence in the U.S. market.

Types of Visa Explanation
Green Card for Employment-Based Immigrants Allows foreign workers to gain permanent residency in the U.S. based on employment qualifications.
Temporary Work Visa For individuals from other countries who intend to work in the U.S. for a specific employer and for a limited period.
NAFTA Professional Worker Visa Under the USMCA (formerly NAFTA), citizens of Canada and Mexico can work in the U.S. in prearranged business activities for U.S. or foreign employers.
L1-Visa Allows international companies to transfer executives or managers to a U.S. office.

Employer of Record (EOR) vs Professional Employer Organization (PEO) in the United States

In the landscape of employment solutions, both Employer of Record (EOR) and Professional Employer Organization (PEO) play pivotal roles, albeit serving distinct functions. Understanding the differences between these two services is crucial for businesses seeking to expand, streamline operations, or manage workforce complexities effectively in the United States.



Employer of Record (EOR) is a service that legally employs individuals on behalf of another company. This arrangement means that the EOR assumes all legal and HR responsibilities, including payroll, taxes, employee benefits, and compliance with labor laws. An EOR is especially beneficial for companies looking to hire employees in a jurisdiction where they do not have a legal entity. It offers a swift and compliant method to enter new markets without the need for establishing a local entity or navigating complex legal and tax systems. The EOR model is ideal for companies engaging remote workers, entering new markets, or those in need of short-term employment solutions.



Professional Employer Organization (PEO), on the other hand, establishes a co-employment relationship with a company. This means the PEO shares certain employer responsibilities with the company, primarily focusing on payroll, tax compliance, and benefits administration. Unlike an EOR, a PEO requires the client company to have an established legal presence in the country of operation. This model is well-suited for businesses seeking to outsource HR functions to reduce administrative burdens and gain access to better benefits and employment practices, thereby improving employee satisfaction and retention.



The choice between an EOR and a PEO depends on the specific needs and circumstances of a business. For instance, companies looking for a quick and compliant way to hire in a new country without establishing a local presence may find an EOR to be the best solution. Meanwhile, businesses that already have an operational entity and wish to outsource their HR functions might opt for a PEO.



Key differences lie in the level of control and responsibility. An EOR becomes the legal employer of the workforce, thus taking on more employer-related risks and compliance duties. In contrast, a PEO works as a partner, sharing responsibilities and allowing the client to retain more control over their employees. Both models offer unique advantages in terms of compliance, cost-effectiveness, and operational efficiency. The decision to choose between an EOR and a PEO should be based on strategic business needs, the legal landscape of the operating region, and long-term workforce management goals.



In summary, while both EOR and PEO provide valuable HR and employment services, they cater to different business requirements. An EOR is a turnkey solution for immediate workforce deployment across international borders without the legal hassles of establishing a foreign subsidiary. A PEO, conversely, enhances an established company’s ability to manage its workforce by offering comprehensive HR services. Understanding these distinctions is essential for any business planning to expand its workforce in the United States or globally, ensuring they choose the most appropriate and beneficial employment model. GTS Nordic can be considered both an Employer of Record and a Professional Employer Organization, as we provide similar services.

Go further…

As Nordic Employment experts we also offer Employer of Record solutions in Sweden, Finland, Denmark and Norway. Contact us today for a free quote.

Partner with GTS Nordic

With GTS Nordic’s EOR solution, you can rely on our team of professionals to handle all compliance- and HR-related duties, from onboarding to termination. We have extensive knowledge of US labor and employment legislation and can ensure that your business is always in compliance with local laws and regulations. If you are looking for a dependable partner that can take care of your HR needs, get in touch with GTS Nordic today. Our EOR solution can help give your business the much-needed push to succeed with your business in the United States.

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Author

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Emil Otte Brok

Illuminating the Nordic employment landscape one article at a time.

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