An extract from The Employment Law Review, 13th edition

Basics of entering an employment relationship

i Employment relationship

Most employment relationships in the United States are presumed to be 'at will', which means an employer can dismiss an employee at any time and for any reason, provided the reason is not illegal. In an at-will employment relationship, an employee is likewise free to quit his or her employment at any time and for any reason.

An employment relationship may be established with or without a written employment agreement. US employers generally limit their individual written employment agreements to executive-level employees, though other employment relationships may be covered by collective bargaining agreements.

Written employment agreements typically include provisions addressing the employment term, salary and other compensation (such as bonuses), benefits, job duties, ownership of work product (work for hire), termination, dispute resolution processes and the manner in which the employment contract may be renewed or amended. These agreements may also include restrictive covenants, which are provisions that prohibit the parties from taking certain actions during the employment term or for a period following termination (see Section V).

ii Probationary periods

There is no law requiring employers to provide probationary periods to new employees. However, many employers choose to use probationary periods for new employees to determine whether they can meet the requirements of the job for which they have been hired. During this probationary period, an employee may not be eligible for all benefits available to regular employees unless otherwise mandated by applicable state or local law.

iii Establishing a presence

Foreign companies doing business in the United States must comply with all applicable laws, which generally includes registering with federal, state and local authorities and paying business and payroll taxes. Federal taxes include Social Security and Medicare, and state law may require, in addition to tax obligations, employer payments to unemployment insurance and workers' compensation funds. Certain states may also require employer contributions to paid family and medical leave funds.

Employers are required to withhold each employee's share of certain taxes, such as Social Security, and to submit those withholdings to the applicable government organisation. Employers are not required, however, to withhold taxes from independent contractors. Rather, these workers, who are not employees, are paid according to the terms of a contractual agreement and are responsible for remitting their own taxes to the appropriate government agencies.