No U.S. law requires an annual salary or performance review for employees, but there’s a reason most companies put such reviews in place. While employees can’t sue an employer for not giving them an annual review, they can sue for unlawful termination and/or wages, which makes a strong case for having a documented history of employees’ work history and performance.
Apart from that, annual salary reviews and annual compensation reviews are crucial to a company’s success. Not only do they help centralize and organize company salary patterns, they also provide a framework for employee success and engagement.
So while it’s not mandatory by law, it’s no mystery why most companies do have annual salary, compensation and performance reviews in place.