Employment Law by State: A Guide for U.S. Employers

Overview: the states compared

In Italy, a CCNL and national law set almost everything: minimum pay grades, notice, TFR, sick pay through INPS. In the United States, federal law is only a floor, and the state where the employee physically works decides most of what matters day to day: minimum wage, overtime exemptions, sick and family leave, final pay, noncompetes and layoff notice. Cities add another layer. A company with one salesperson in Manhattan and one engineer in Austin is running two very different employment regimes. (For the federal layer, see U.S. employment law essentials; for payroll mechanics, see Payroll.)

The three tables below summarize the 2026 rules in the 14 states where Italian companies most often hire. They are a map, not a substitute for advice: several items (local minimum wages, SUI rates, pending bills) change every year, sometimes mid-year.

Table 1: pay floors and taxes

Table 2: leave and payroll insurances

Table 3: hiring and exit rules

Which U.S. states require severance pay?

Short answer: there is no federal severance requirement, and most states do not require it either. Only three states require employers to make severance-type payments, and only when a facility closes or there is a mass layoff: New Jersey, Maine and Hawaii. In every other case, severance in the U.S. is paid only if a contract, offer letter, collective agreement or company severance plan promises it, usually in exchange for a signed release of claims. This is very different from Italy, where TFR is always due at the end of employment.

Separately, the federal WARN Act and the "mini-WARN" laws in New York, California, Illinois and other states require advance notice of layoffs, or pay in lieu of notice. That is back pay for missing notice, not severance. For how to structure voluntary severance and releases, see Terminations & exits.

Payroll laws by state: what changes from one state to the next

Federal payroll rules (FICA, FUTA, federal withholding and the FLSA) apply everywhere. On top of that, the state where each employee physically works sets its own minimum wage and overtime rules, pay frequency, final-pay deadline, income tax withholding (none in Texas, Florida or Tennessee), unemployment insurance (SUI) rate and wage base, and in some states paid family and medical leave contributions. Tables 1 to 3 above compare these for 14 states. For the mechanics of running payroll, see Payroll & employer taxes.

New York

New York is where most Italian companies open first, and it combines high pay floors with dense state and New York City rules.

• Minimum wage and exemption. $17.00 in NYC, Long Island and Westchester, $16.00 elsewhere; from 2027 the rate is indexed to inflation. Executive and administrative employees must earn at least $1,275/week ($66,300) downstate or $1,199.10/week ($62,353.20) upstate to be exempt from overtime. Professionals follow the federal $684 floor, but the duties test still applies.
• Taxes. State tax up to 10.9%, plus NYC resident income tax (about 3.1% to 3.9%). NYC tax follows residence, not workplace: an NYC office worker who lives in New Jersey pays none.
• Leave. Paid sick leave of 40 hours (up to 99 employees; unpaid only for 4 or fewer employees with net income of $1M or less) or 56 hours (100+). Since 2025, 20 hours of separate paid prenatal leave. NYC's Earned Safe and Sick Time Act adds, from 2026, 32 hours of unpaid safe and sick time. Employers must carry statutory disability (DBL) and Paid Family Leave (PFL) insurance: PFL gives up to 12 weeks at 67% of pay, funded by a 0.432% employee deduction capped at $411.91 in 2026.
• Pay transparency. Employers with 4+ employees must post a good-faith pay range in every ad for a job performed in New York, or reporting to a New York supervisor.
• Noncompetes. Still enforceable if reasonable and protecting a legitimate interest. A ban (S4641A, with a $500,000 carve-out) is pending again; watch for developments. Since 2026, "stay or pay" training repayment clauses are banned.
• Mini-WARN. 50+ employees in New York; 90 days' notice for plant closings affecting 25+ workers and mass layoffs of 25+ (if 33%) or 250+.
• Training. Annual interactive sexual harassment training for every employee, using a policy meeting the state model; NYC requires it at 15+ employees.
• Other 2026 items. Credit history ban in hiring (from April 18, 2026); retaliation ban for accommodation requests.

Labor Law 191: the manual worker trap

"Manual workers" (anyone spending more than 25% of their time on physical tasks: warehouse, technicians, many retail and restaurant roles) must be paid weekly. After the 2019 Vega decision, class actions sought 100% liquidated damages for biweekly pay, even when wages were paid in full. The May 2025 amendment limits a first violation to lost interest, provided the employer paid at least semi-monthly; repeat violators still face liquidated damages. Whether employees can sue directly remains split between appellate courts.

Key agencies: NY Department of Labor, NY Paid Family Leave, NYC Department of Consumer and Worker Protection, NY Division of Human Rights.

New Jersey

• Minimum wage. $15.92 ($15.23 for seasonal and small employers under 6 employees). Exemption threshold follows federal law.
• Payroll deductions. New Jersey is one of the few states where employees also pay unemployment tax, plus TDI (0.19%) and Family Leave Insurance (0.23%) on wages up to $171,100. Employers pay SUI on the first $44,800 (2.8% for new employers) and TDI at 0.1% to 0.75%.
• Leave. 40 hours of earned sick leave for all employers. From July 17, 2026 the job-protected NJ Family Leave Act covers employers with 15+ employees (previously 30).
• Pay transparency. Since June 2025, employers with 10+ employees must disclose pay range and benefits in postings, and announce promotion opportunities internally.
• Mini-WARN with severance. Since 2023, employers with 100+ employees anywhere (not only in New Jersey) must give 90 days' notice when 50+ employees are terminated at or reporting to NJ sites, and pay mandatory severance of one week per year of service, plus four more weeks if notice was short. This is the closest U.S. equivalent to Italian collective dismissal rules.
• Final pay. Next regular payday; PTO payout follows written policy.

The ABC test

New Jersey presumes anyone paid for services is an employee unless the company proves all three prongs: (A) freedom from control, (B) work outside the usual course or places of business, and (C) an independently established business. Regulations adopted in May 2026 and effective October 1, 2026 apply the test across unemployment, wage and hour, wage payment and sick leave laws. A professional license, multiple clients or a 1099 are not enough on their own. Industry groups may still challenge the rules.

Key agencies: NJ Department of Labor and Workforce Development, NJ Temporary Disability and Family Leave Insurance.

California

• Pay floors. $16.90 statewide, with dozens of higher local rates (San Francisco $19.61 and Los Angeles City $18.42 from July 1, 2026). The exempt salary floor is twice the state minimum wage: $70,304 in 2026. Nonexempt employees get daily overtime after 8 hours and double time after 12, plus meal and rest break premiums.
• Taxes. Income tax up to 13.3%. Employees pay 1.3% SDI on all wages (no cap since 2024), which funds disability and paid family leave. New employers pay 3.4% SUI on $7,000 plus the 0.1% employment training tax.
• Leave. 40 hours or 5 days of paid sick leave; state disability and paid family leave through the EDD; job-protected CFRA leave at 5+ employees.
• Pay transparency. 15+ employees must post pay scales; SB 642 (2026) requires a good-faith range; Equal Pay Act claims now have a three-year limitations period with up to six years of recovery.
• Noncompetes. Void for employees (Business and Professions Code 16600), whatever state's law the contract chooses, with narrow exceptions (sale of a business). Using or even attempting to enforce one is unlawful.
• Final pay. Due immediately on termination and within 72 hours for a resignation without notice. Accrued vacation is wages and must be paid out; "use it or lose it" is prohibited. Late payment triggers waiting-time penalties of up to 30 days' wages.
• Cal-WARN. 75+ employees; 60 days' notice for 50+ layoffs at a covered establishment, regardless of percentage.
• Training. 5+ employees: 2 hours for supervisors, 1 hour for others, every two years.

PAGA (Private Attorneys General Act)

The Private Attorneys General Act lets an employee sue for civil penalties on behalf of the state and all "aggrieved employees" for any Labor Code violation, from a paystub formatting error to a missed rest break. 2024 reforms cap penalties at 15% for employers that took "all reasonable steps" to comply before notice (payroll audits, written policies, supervisor training) and 30% for those who fix issues within 60 days of notice. Further LWDA rules are expected in late 2026 or 2027.

Key agencies: Labor Commissioner (DLSE), Employment Development Department, Civil Rights Department.

Illinois

• Minimum wage. $15.00 statewide; Chicago $17.05 from July 1, 2026 (4+ employees); Cook County $15.40. Exemption threshold follows federal law.
• Taxes. Flat 4.95%. SUI on $14,250 (new employer 3.35%).
• Leave. The Paid Leave for All Workers Act gives 40 hours of paid leave usable for any reason. Chicago requires 40 hours of paid leave plus 40 hours of paid sick leave; Cook County has its own 40-hour rule.
• Pay transparency. 15+ employees: pay scale and benefits in postings for Illinois jobs or remote jobs reporting there.
• Noncompetes. The Freedom to Work Act bans noncompetes for employees earning $75,000 or less and non-solicits at $45,000 or less (thresholds rise in 2027). Employees need 14 days to review and written advice to consult a lawyer.
• Final pay. Next regular payday; earned vacation must be paid out and cannot be forfeited.
• Mini-WARN. 75+ employees; 60 days' notice for layoffs of 25+ (if 33%) or 250+.
• Training. Annual harassment training for all employees; Chicago adds longer sessions and bystander training.

BIPA

The Biometric Information Privacy Act requires written notice, a retention policy and written consent before collecting fingerprints, face or hand geometry, for example in time clocks or access systems. Damages are $1,000 per negligent and $5,000 per reckless violation. The 2024 amendment counts repeated scans of the same person as one violation, and in April 2026 the Seventh Circuit (Clay v. Union Pacific) held it applies to pending cases. Exposure is lower, but still significant for large workforces.

Key agencies: Illinois Department of Labor, IDES (unemployment), Chicago Office of Labor Standards.

Massachusetts and Pennsylvania

Massachusetts

• Pay and tax. $15.00 minimum; 5% flat income tax plus a 4% surtax on income above about $1.08 million.
• PFML. 0.88% of wages up to the Social Security wage base ($184,500). For 25+ employees, the employer pays at least 60% of the medical share (0.42%); employees can bear up to 0.46%. Contribution splits change in 2027.
• Sick leave and pay transparency. 40 hours (paid for 11+ employees). Since October 2025, employers with 25+ employees must post pay ranges; 100+ employees file EEO pay data with the state.
• Noncompetes. Max 12 months, supported by garden leave (at least 50% of base pay) or other agreed consideration, void for nonexempt employees and for those laid off, with 10 business days' review.

The Wage Act: treble damages

Late or unpaid wages (including final pay due on the day of an involuntary termination and accrued vacation) trigger mandatory treble damages plus attorney fees, even for honest mistakes. Individual officers can be personally liable. Pay commissions and vacation on time, every time.

Pennsylvania

• Minimum wage still $7.25; exempt threshold follows federal law. Flat 3.07% income tax plus local earned income taxes, and the Philadelphia wage tax (3.735% for residents from July 1, 2026).
• No statewide sick leave, but Philadelphia (10+ employees) and Pittsburgh have ordinances. Employees also pay a small UI contribution (0.07%). New-employer SUI is 3.822% on $10,000.
• Noncompetes are enforceable if reasonable and supported by consideration at hire or new consideration later. Final pay by the next regular payday.

Key agencies: Massachusetts DFML, Massachusetts Attorney General, Pennsylvania Department of Labor and Industry.

Texas and Florida

Texas and Florida attract Italian companies with no state income tax, federal-level exemption rules, no state sick leave or PFML, no mini-WARN and no mandated harassment training. Cities cannot set their own minimum wages.

Texas

• $7.25 minimum; SUI on $9,000 at 2.7% for new employers.
• Noncompetes enforceable if tied to an otherwise enforceable agreement (usually the promise of confidential information) and reasonable in time, geography and scope; special rules for physicians and health care workers.
• Final pay within 6 calendar days after a dismissal, next regular payday after a resignation. PTO payout follows written policy.
• Texas does not require workers' compensation (unique), but non-subscribers lose key defenses in injury lawsuits: most employers still buy it.

Florida

• Minimum wage rose to $15.00 on September 30, 2026, completing the 2020 ballot schedule (indexed from 2027).
• Noncompetes are strongly enforceable under Section 542.335. The CHOICE Act (July 2025) allows noncompetes and garden leave up to 4 years for employees earning more than twice the county's mean wage, with mandatory injunctions, 7 days' review and written notice of the right to counsel.
• No final pay statute; PTO follows policy. SUI on $7,000 at 2.7%.

Key agencies: Texas Workforce Commission, Florida Department of Revenue (reemployment tax), FloridaCommerce.

Georgia, the Carolinas and Tennessee

These states host many Italian manufacturing and automotive plants. All use the $7.25 federal minimum and federal exemption rules, with no state sick leave, PFML or harassment training mandates. The main differences are tax, noncompetes and final pay.

• Georgia. Flat income tax 4.99% in 2026 (HB 463). Restrictive Covenants Act: noncompetes up to 2 years are presumed reasonable, and courts may modify overbroad terms. Employers with 25+ employees who offer sick leave must let staff use up to 5 days for family care. SUI on $9,500.
• North Carolina. Flat 3.99% income tax. Noncompetes must be written, supported by consideration and reasonable. Final pay on the next regular payday; PTO forfeiture only if the policy was notified in writing. The SUI wage base is high ($34,200) but the new-employer rate is low (1%).
• South Carolina. Top income tax rate 6% (reform in progress). Courts construe noncompetes strictly and will not rewrite them. Final wages within 48 hours or by the next regular payday (max 30 days). New hires must be verified through E-Verify.
• Tennessee. No income tax on wages. A new noncompete statute (HB 1034) applies to agreements from July 1, 2026: noncompetes are banned for employees earning under $70,000, and up to 2 years is presumed reasonable. Final pay by the later of the next payday or 21 days. The state plant closing act applies to employers with 50 to 99 full-time employees; E-Verify is required for employers with 35+ employees.

Key agencies: Georgia Department of Labor, NC Department of Labor, SC Department of Employment and Workforce, Tennessee Department of Labor.

Ohio and Michigan

Ohio

• $11.00 minimum wage for larger employers (smaller businesses below the annual gross-receipts threshold may pay $7.25). Flat 2.75% state income tax from 2026.
• Municipal income taxes are the real complexity: most cities levy 1% to 2.5% on wages earned there, and employers must withhold by work location. Remote and hybrid staff need careful tracking.
• No state sick leave or PFML. Some cities (e.g., Cleveland, Columbus) have adopted pay transparency or salary-history ordinances: verify effective dates. Final pay by the next payday or within 15 days.

Michigan

• $13.73 minimum wage from January 1, 2026, with further increases scheduled. Flat 4.25% income tax plus city taxes (Detroit and others).
• The Earned Sick Time Act (ESTA) requires 72 hours for employers with 11+ employees and 40 hours for smaller ones, with detailed notice and carryover rules.
• Noncompetes enforceable if reasonable (MARA). No mini-WARN. SUI on $9,000 at 2.7%.

Key agencies: Ohio Department of Job and Family Services, Ohio Department of Commerce, Michigan Department of Labor and Economic Opportunity, Michigan UIA.

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