Labor and Employment Law Considerations for Doing Business in the U.S.

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Upon deciding to do business in the U.S., make sure your company is familiar with labor and employment laws that could impact them.

10 Things to Consider When Starting a Company in the U.S.

  • Employment rules and regulations are governed by both federal and state laws, with rules often taking effect based on the number of U.S. employees
  • Each state in the United States has its own employment laws and regulations
  • Both the state of employer’s business operations and the state of employee’s residence may be involved in determining labor and employment laws
  • General principle – “employment-at-will”
  • Employees are classified into two regulatory groups for overtime pay rules: exempt employees and non-exempt employees, depending on their role in the organization
  • There are two federal and two state agencies that provide guidance on when it is appropriate to classify a service provider as an independent contractor
  • Standard policies
    • Hiring, work requirements, workplace operation and behavior rules, discipline, performance evaluations, termination process
  • Standard employee agreements
    • Non-disclosure, inventions assignment, non-competition and non-solicitation—but enforcement varies from state to state
  • Typical employee compensation components
    • Salary, bonus and sometimes equity compensation (stock options, restricted stock or similar compensation vehicles available in businesses taxed as partnerships), group health and welfare insurance coverage and 401(k) employee deferral retirement plan (employer contributions are optional)
  • Incentive Compensation Programs
    • Equity incentives (stock options, restricted stock or similar compensation vehicles available in businesses taxed as partnerships), long-term performance incentive plans, annual performance bonus programs and deferred compensation plans

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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