US HR Operations

The United States has a complex web of federal, state, and local regulations governing payroll, benefits, and employment compliance. Understanding these US-specific requirements is essential for accurate HR operations in the US context.

US Payroll Tax Administration

US payroll processing involves multiple tax obligations beyond federal income tax withholding. Employers must calculate, withhold, remit, and report various taxes with strict deadlines and penalties for non-compliance.

Federal Insurance Contributions Act (FICA) comprises Social Security and Medicare taxes. Social Security tax is 6.2% for employees (matching 6.2% for employers) on wages up to the Social Security wage base, which is indexed annually (e.g., $160,200 for 2023, $168,600 for 2024). Medicare tax is 1.45% for employees (matching 1.45% for employers) on all wages with no cap. Additional Medicare tax applies to high earners—employees pay an extra 0.9% on wages above $200,000 (single) or $250,000 (married filing jointly), with no employer match. FICA taxes are calculated on each paycheck and remitted along with federal income tax withholding.

Federal Unemployment Tax Act (FUTA) is an employer-only tax funding unemployment insurance. The base rate is 6.0% on the first $7,000 of each employee's annual wages, but most employers receive a 5.4% credit for paying state unemployment taxes on time, resulting in an effective rate of 0.6%. FUTA is reported quarterly on Form 940 and paid either quarterly or annually depending on liability. FUTA payments are due by the last day of the month following each quarter.

State Unemployment Tax (SUTA) varies by state with different rates, wage bases, and reporting requirements. Rates typically range from 0.5% to 6.0% or higher, applied to wages up to state-specific wage bases (often $7,000 to $56,100 depending on state). New employers typically start with a standard "new employer rate" that adjusts based on experience rating—employers with more unemployment claims pay higher rates. States also have different reporting frequencies (quarterly is common) and payment deadlines.

Workers' Compensation is state-mandated insurance covering workplace injuries. Unlike other payroll taxes paid to government agencies, workers' compensation premiums are paid to insurance carriers or state funds. Rates vary by state, industry, and employer claims history. Coverage requirements, benefit structures, and administration vary significantly by state.

Federal income tax withholding uses the employee's Form W-4 elections to calculate withholding. The W-4 form, redesigned in 2020, uses dollar amounts rather than allowances. Withholding tables published by the IRS determine the amount based on pay frequency, filing status, and W-4 information. Employers must remit withheld amounts along with employer payroll taxes according to deposit schedules.

Payroll tax deposit schedules are based on tax liability. For federal taxes, the deposit schedule depends on total tax liability in a lookback period: monthly depositors (liability under $50,000 in prior year) deposit by the 15th of the following month, semi-weekly depositors (liability $50,000-$100,000) deposit within 3-4 days of payday depending on payday, next-day depositors (liability over $100,000) deposit the next business day. State deposit schedules vary.

Payroll tax penalties can be severe. Late deposits incur penalties of 2% to 15% depending on how late, plus interest. Failure to file required returns (Forms 941, 940) incurs penalties of 5% per month up to 25%, plus late payment penalties. Willful failure to withhold or remit taxes can result in criminal penalties. Accurate record-keeping and timely deposits are essential.

Form W-2 reports annual wages and taxes to employees and the Social Security Administration. Employers must provide W-2s to employees by January 31 and file with SSA by the same deadline. W-2s include wages, tips, other compensation, federal income tax withheld, Social Security wages and tax, Medicare wages and tax, state wages and tax, and local wages and tax. Errors require corrections via Form W-2c.

For broader tax context including individual tax concepts and filing requirements, see US Tax Primer.

US Benefits Regulations

US benefits administration involves significant regulatory requirements beyond operational administration, particularly for health insurance and retirement plans.

Affordable Care Act (ACA) requires applicable large employers (ALEs—generally 50+ full-time and full-time equivalent employees) to offer affordable health coverage meeting minimum value standards to full-time employees or pay penalties. ALEs must track employee hours to determine full-time status (30+ hours per week or 130+ hours per month). The employer shared responsibility provisions require reporting on Forms 1094-C and 1095-C showing offers of coverage. Penalties apply if coverage is not offered, not affordable (employee premium exceeds 9.12% of household income for 2023), or does not meet minimum value (covers at least 60% of allowed costs). ACA requirements apply to calendar-year basis, with annual reporting deadlines.

COBRA continuation coverage allows employees and dependents who lose health coverage due to qualifying events to continue coverage at their own expense. Qualifying events include termination (voluntary or involuntary, except gross misconduct), reduction in hours, divorce or legal separation, death of employee, Medicare entitlement, and loss of dependent status. Employers with 20+ employees must offer COBRA. Notice requirements are strict—initial general notice within 90 days of coverage, qualifying event notice within 14 days of event, election notice within 14 days, and employees have 60 days to elect coverage. Coverage continues for 18-36 months depending on qualifying event. Premiums can be up to 102% of cost (100% plus 2% administrative fee).

Health Savings Accounts (HSAs) pair with high-deductible health plans (HDHPs). For 2024, HDHP minimum deductibles are $1,600 (self-only) or $3,200 (family), with out-of-pocket maximums of $8,050 (self-only) or $16,100 (family). HSA contribution limits for 2024 are $4,150 (self-only) or $8,300 (family), plus $1,000 catch-up for those 55+. Contributions are pre-tax, grow tax-free, and withdrawals for qualified medical expenses are tax-free. Employers can contribute to employee HSAs, and both employee and employer contributions count toward limits. HSAs are portable—employees keep them when changing jobs or retiring.

Flexible Spending Accounts (FSAs) allow pre-tax contributions for health or dependent care expenses. Health FSAs have annual contribution limits (e.g., $3,200 for 2024), are use-it-or-lose-it (with optional carryover or grace period), and require substantiation of expenses. Dependent care FSAs have lower limits ($5,000 or $2,500 for married filing separately) and different eligibility rules. FSAs reduce employee taxable income and employer payroll taxes.

401(k) plans are employer-sponsored retirement plans allowing pre-tax or Roth contributions. Employee contribution limits for 2024 are $23,000 ($30,500 for those 50+). Employer matching contributions don't count toward employee limit but are subject to annual addition limit of $69,000 for 2024. Plans must meet nondiscrimination testing (ADP/ACP tests) ensuring highly compensated employees don't disproportionately benefit. Automatic enrollment and auto-escalation features can improve participation. Vesting schedules determine when employees own employer contributions (immediate, graded, or cliff vesting). Plans must file Form 5500 annually.

Family and Medical Leave Act (FMLA) provides up to 12 weeks of unpaid, job-protected leave per year for eligible employees. Eligibility requires 12 months of service, 1,250 hours worked in past 12 months, and working at a location with 50+ employees within 75 miles. Qualifying reasons include birth/adoption, serious health condition of employee or family member, and military family leave. Health benefits must be maintained during leave, and employees must be restored to same or equivalent position. Some states have more generous leave laws. For broader employment law context, see Employment Law Primer.

Paid family and medical leave varies by state. States including California, Colorado, Connecticut, Delaware, Maine, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Washington, and Washington D.C. have mandatory paid leave programs with different benefit levels, duration, funding mechanisms (state-administered insurance or employer-funded), and eligibility requirements. Employers must understand both federal FMLA and applicable state programs.

State-mandated benefits include requirements beyond federal law. Examples include paid sick leave (required in multiple states and cities), disability insurance (California, Hawaii, New Jersey, New York, Rhode Island, and Puerto Rico have state disability programs), and other state-specific requirements. Employers operating in multiple states must track varying requirements.

Benefits discrimination rules prohibit discrimination based on protected characteristics in benefit offerings. Health plan discrimination based on health status is generally prohibited. Retirement plan discrimination testing ensures benefits are not disproportionately provided to highly compensated employees. Age discrimination in benefits is prohibited, though some age-based distinctions are permitted.

For understanding the healthcare system that underlies health benefits administration, see US Healthcare Primer.

US Compliance Reporting

US employers face numerous compliance reporting requirements with specific deadlines, formats, and thresholds.

EEO-1 Component 1 Report provides workforce diversity statistics by job category, race, ethnicity, and gender. Employers with 100+ employees and federal contractors with 50+ employees and contracts of $50,000+ must file annually. The report categorizes employees into 10 job categories and reports counts by race/ethnicity and gender. Filing is typically due by March 31, with extensions available. The data is used by the EEOC and OFCCP for enforcement purposes.

ACA Forms 1094-C and 1095-C report health coverage offers to employees. ALEs must provide Form 1095-C to each full-time employee by January 31 and file Forms 1094-C and 1095-C with the IRS by the same deadline (paper) or March 31 (electronic). Forms show for each month whether coverage was offered, affordability safe harbor used, coverage affordability, and coverage provided. Penalties apply for late or incorrect filing.

Form 941 reports quarterly payroll taxes (federal income tax withholding, Social Security tax, Medicare tax). Due dates are the last day of the month following each quarter (April 30, July 31, October 31, January 31). Form 941 includes wages paid, tips reported, taxes withheld, taxes deposited, and any adjustments. Employers must reconcile deposits with reported taxes.

Form 940 reports annual FUTA tax. Due January 31 with payments due quarterly if liability exceeds threshold. Form 940 includes state unemployment tax payments (affecting credit calculation), wages subject to FUTA, and FUTA tax liability.

State unemployment tax reports vary by state but generally report quarterly with wages, taxable wages, tax liability, and payments. Due dates vary (typically end of month following quarter). State-specific forms and electronic filing requirements must be followed.

New hire reporting requires employers to report new hires to state directories within 20 days (some states require faster). Information includes employee name, address, SSN, hire date, and employer information. States use this information for child support enforcement and fraud prevention.

I-9 verification requires employers to verify employment authorization within 3 business days of hire. Form I-9 documents identity and work authorization. Employers must retain I-9s for 3 years after hire or 1 year after termination, whichever is later. Violations can result in civil and criminal penalties.

Workers' compensation reporting varies by state but typically requires reporting workplace injuries within specific timeframes (often 24 hours for serious injuries, within days or weeks for other injuries). Forms vary by state. Failure to report can result in penalties and loss of coverage benefits.

OSHA reporting requires employers to report work-related fatalities within 8 hours and inpatient hospitalizations, amputations, or eye losses within 24 hours. OSHA 300 logs track all recordable injuries and must be posted annually. Employers with 250+ employees or in certain industries must electronically submit injury data.

Compliance calendar management is essential—missed deadlines create penalties, audits, and legal risk. Many HRIS platforms include compliance calendars, but employers must verify completeness and accuracy for their specific circumstances.

US Operational Thresholds and Deadlines

Key operational benchmarks for US employers: EEO-1 filing deadline is typically March 31 (with extensions available). ACA reporting (Forms 1094-C/1095-C) is due January 31 to employees and IRS (paper) or March 31 (electronic). W-2 distribution and SSA filing is January 31. Form 941 is due quarterly by last day of month following quarter. Form 940 is due January 31. New hire reporting is within 20 days (varies by state). I-9 must be completed within 3 business days of hire. COBRA election period is 60 days. FMLA requires 30 days advance notice when foreseeable. Open enrollment typically runs 2-4 weeks before plan year start. Payroll tax deposits vary by schedule (monthly, semi-weekly, next-day based on liability). State reporting deadlines vary significantly.

Common US-Specific Misconceptions

"All states have the same requirements" ignores significant variation in unemployment taxes, workers' compensation, paid leave, and other state mandates. "FICA is just Social Security" misses Medicare tax and additional Medicare tax for high earners. "COBRA applies to all employers" only applies to employers with 20+ employees. "401(k) contributions are always deductible" misses Roth 401(k) contributions which are after-tax. "FMLA is paid leave" is unpaid leave, though some states have paid programs. "I-9s can be filed away immediately" must be retained for specific periods and made available for inspection. "Payroll taxes are straightforward" ignores deposit schedule complexity, state variations, and penalty structures.