The UK largely operates under a national employment framework, while US employment obligations can exist across federal, state, and local levels.

This means hiring an employee in a new US state can introduce additional requirements involving payroll registration, unemployment insurance, workers’ compensation, wage and overtime rules, leave entitlements, and other state-specific employment obligations. Companies expanding from the UK therefore need processes capable of managing variation across locations.

A PEO commonly supports payroll administration, federal and state employment tax processing, benefits administration where included, workers’ compensation, unemployment-related processes, HR administration, and certain compliance activities.

Your business continues to control hiring decisions, employee responsibilities, performance, workplace culture, and day-to-day management. The exact allocation of responsibilities should be documented within the agreement between your company and the PEO.

US employers must account for applicable statutory requirements such as Social Security and Medicare contributions, unemployment insurance, workers’ compensation, and certain leave or healthcare obligations depending on employer size and location.

Employees may also expect additional benefits such as paid time off, paid sick leave, 401(k) retirement plans, medical coverage, dental and vision insurance, disability coverage, and life insurance. Requirements and market expectations can differ significantly between states and workforce segments.

The right model depends on your legal structure, hiring plans, expansion timeline, workforce type, and internal HR capabilities. As a general guide:

• PEO: You already have a US entity and want support scaling payroll, benefits, HR administration, and compliance
• EOR: You do not have a US employing entity and want to hire employees without establishing one first
• Direct setup: You want direct ownership of employment infrastructure and have sufficient HR, payroll, legal, and compliance resources
• Contractors: Appropriate for genuinely independent project-based or specialist work where the engagement meets applicable classification requirements