I have a mental separation between henchmen and hirelings. I would say that a henchman is someone who CAN and WILL contribute during all 3 of the pillars of the game; they fight and explore and interact as well as any other PC. Therefore they should receive XP (full share or half share depending on the DM's decision) and be able to level up. Once they begin adventuring on their own, they're PCs and get treated like a PC. Hirelings (and animal companions and mounts) do NOT contribute on at least 2 of the pillars (usually they don't do much in combat, and do little or nothing for social interaction); they are there to do one limited thing, they don't really contribute to anyone's survival; they're color, character flavor, and an occasional useful tidbit of action. So they don't get experience, and never advance in level. Their abilities are fixed, or change a little due to the PC's growth, not their own.
It is up to the DM and the PC together to decide on each specific case whether someone like a squire is a hireling, or a henchman. If he's a henchman, he deserves XP. He also deserves treasure, and must be taken care of to ensure loyalty and trust. A hireling doesn't get treasure, and frankly, his ongoing loyalty is always at least somewhat questionable; the bad guy can almost always pay a larger bribe than you are paying in wages.