# Employment migration in the United States

Build the US plan by employee state and by the actual relationship: direct employment, an EOR arrangement or PEO co-employment. Federal tax certification and state obligations are separate.

- Canonical: [Read this publication online](<https://eormigration.com/countries/united-states>)
- Author: [Heddle](<https://eormigration.com/editorial#heddle>)
- Published: 2026-10-01
- Modified: 2026-10-02
- Sources checked: 2026-10-01
- Scope: United States

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## The short answer

Plan by employee state and by the actual employment arrangement, including the responsibilities retained by the client. Check state permissions and payroll requirements separately from any federal CPEO certification, then align benefits, tax reporting and work authorisation.

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## Where PEO fits

PEO is a co-employment model in relevant state frameworks. CPEO is a specific IRS certification for federal employment-tax treatment; it is not a general compliance guarantee.

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## Confirm the employment model and state permissions

Identify which duties remain with the client and which sit with the provider. Check PEO licensing in each relevant state; Texas, for example, regulates co-employment and requires a licence where a provider has covered employees there.

**Sources**

- [Texas TDLR — Professional Employer Organizations: General Information](<https://www.tdlr.texas.gov/peo/general-information.htm>)

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## Verify the CPEO entity and federal tax handover

If CPEO status is claimed, verify the exact legal name and EIN against the IRS listing. Confirm Form 8973 reporting for the start and end of the service contract and who is responsible for each tax period. CPEO treatment has conditions and exceptions.

**Sources**

- [IRS — CPEO customers: What you need to know](<https://www.irs.gov/tax-professionals/cpeo-customers-what-you-need-to-know>)

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## Map service credit, health coverage and retirement benefits

Record how the proposed arrangement treats prior service and vesting. Compare coverage end and start dates, premiums, provider networks and waiting periods; assess continuation coverage where applicable. Do not assume a change of platform preserves every benefit.

**Sources**

- [US Department of Labor — Changing Jobs and Job Loss](<https://www.dol.gov/agencies/ebsa/workers-and-families/changing-jobs-and-job-loss>)

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## Assess contractor status under each relevant test

Federal tax status depends on control and independence, not the agreement's label. Also check applicable wage-law and state tests; California's guidance illustrates that ABC-test rules and exemptions can differ from the federal tax analysis.

**Sources**

- [IRS — Independent contractor (self-employed) or employee?](<https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee>)
- [California DIR — Independent contractor versus employee](<https://www.dir.ca.gov/dlse/faq_independentcontractor.htm>)
- [US Department of Labor — Employee or Independent Contractor Classification FAQs](<https://beta.dol.gov/policy-regulations/pay-benefits/wages-hours/flsa/misclassification-employees-independent-contractors/faqs>)

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## Build the payroll schedule by state

Check the employee's work location, state payroll requirements and pay frequency before aligning cutover. Use the relevant state labour office for current details rather than assuming one national payroll calendar applies.

**Sources**

- [US Department of Labor — State Labor Laws](<https://www.dol.gov/index.php/agencies/whd/state>)

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## Review work authorisation by visa category

Identify the petitioning employer and whether new or amended filings are needed. Some H-1B workers may use portability after a properly filed petition, but that does not establish eligibility for every worker or every new provider. Check the authorised work and start date for the individual case.

**Sources**

- [USCIS — How do I hire a foreign national for short-term employment in the United States?](<https://www.uscis.gov/sites/default/files/document/guides/E1en.pdf>)

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## Does CPEO certification establish compliance in every US state?

No. CPEO is an IRS certification with a specific federal employment-tax scope and conditions. Verify the exact certified entity and check applicable state licensing and responsibilities separately.

**Sources**

- [Supporting source](<https://www.tdlr.texas.gov/peo/general-information.htm>)
- [Supporting source](<https://www.irs.gov/tax-professionals/cpeo-customers-what-you-need-to-know>)

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## Can every US employee use the same migration payroll schedule?

Do not assume one national payroll calendar applies. Check each employee’s work location, relevant state requirements and pay frequency before aligning the final and first payrolls.

**Sources**

- [Supporting source](<https://www.dol.gov/index.php/agencies/whd/state>)

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## Does a contractor agreement settle US worker classification?

No. Federal tax status depends on the actual control and independence in the relationship. Applicable wage-law and state tests also need assessment; California’s ABC-test rules and exemptions illustrate why the federal tax analysis is not the only check.

**Sources**

- [Supporting source](<https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee>)
- [Supporting source](<https://www.dir.ca.gov/dlse/faq_independentcontractor.htm>)
- [Supporting source](<https://beta.dol.gov/policy-regulations/pay-benefits/wages-hours/flsa/misclassification-employees-independent-contractors/faqs>)

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## Planning scope

Record an owner, required evidence and readiness date for each of these points before agreeing the cutover. Legal applicability depends on the actual arrangement; this guide is planning information, not a legal opinion.

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## Related publications

- [Migration routes](<https://eormigration.com/routes>)
- [Provider comparison](<https://eormigration.com/providers>)