Guide to hiring employees in the United States

Employee Benefits in the United States

Most employers in the United States provide their workforce with benefit plans as an incentive to increase corporate retention and employee satisfaction. Also referred to as fringe benefits, common additional benefits typically found in the USA often include:

• retirement benefit plans (such as 401(k), pension and long-term care insurance)
• paid time off (PTO) such as vacation leave and sick leave
• relocation assistance
• medical, prescription, vision, and dental plans
• Flexible spending accounts (FSA) such as Health and Dependent Care FSAs
• Legal assistance plans
• Adoption assistance
• Childcare benefits
• Transportation

Many employers in the United States also go as far as to provide their staff with Employee Discount Programs that provide workers with access to specialised discounts on products and services from different vendors. These programs can include discounts on hotels and holiday destinations, beauty and wellness treatments, financial services, movie and theme park tickets, and home services.

Most of these benefits are tax deductible for the employer and not subject to income tax for the employee.

Cafeteria plans are also a popular benefits scheme offered by American employers to their employees according to the requirements of section 125 in the Internal Revenue Code. These plans often include a “menu” of different levels of benefits for the employee to choose from on a pretax basis. Employees on a cafeteria plan must be allowed to choose one taxable benefit and one qualified benefit.

A qualified benefit refers to any type of benefit that is excluded from an employee’s taxable income and includes:

• Accident and health benefits (excluding Archer medical savings accounts or long-term care insurance)
• Adoption assistance
• Dependent care assistance
• Group-term life insurance coverage
• Health savings accounts (Including distributions to pay for long-term care services)

Source: Shutterstock/prostock-studio

Types of leave available in the United States

Federal law does not require private employers in the United States to provide employees with paid time off, vacation or sick days however, many employers choose to do so.

Sick leave

A growing list of jurisdictions have laws in place that require employers to provide their employees with paid sick leave, while some jurisdictions make it compulsory for employers to provide paid leave for reasons other than illness.

Many states and local jurisdictions have also implemented emergency paid sick leave policies while several jurisdictions have mandated paid leave for COVID-19 vaccination and recovery from side effects due to the vaccine.

Family and medical leave (FMLA)

The United States FMLA leave scheme provides employees with up to 12 weeks of unpaid leave per year. During this time, the employees’ jobs, along with any group health benefits, are maintained.

Eligible employees are entitled to:

• Twelve weeks of leave within a 12-month period for:
• Childbirth and care for a newborn child within a year of the birth
• Care of an adopted or a foster child that has been placed within the employee’s care within one month of said placement
• Care of a parent, spouse, or child facing serious medical conditions
• Serious medical conditions that affect the employee’s ability to perform the essential functions of their job
• Any qualifying exigency arising out of the fact that the employee’s spouse, child, or parent is a covered military member on “covered active duty;” or

Twenty-six weeks of leave during a single 12-month period to care for a covered servicemember with a serious injury or illness if the eligible employee is the servicemember’s spouse, son, daughter, parent, or next of kin. This is known as military caregiver leave.

Employees are eligible for FMLA if they have worked for their employer that employs 50 or more employees within 75 miles for a minimum of 12 months.

Paid time off (PTO)

There is no federal requirement for paid time off in the United States, according to the Department of Labor. PTO is usually regulated according to state laws, or oftentimes, it is up to the company to determine its own PTO policies.

Currently, only twelve states, along with Washington DC, have legislated paid sick leave.

• Workers in Arizona, California, Maryland, Michigan, New Jersey, and Oregon earn an hour of PTO for every 30 hours of service.
• Workers in Connecticut, Washington, Maine, and Nevada earn one hour of PTO for every 40 hours of service.
• Workers in Rhode Island earn one hour of PTO for every 35 hours of service.
• Workers in Washington, D.C, earn one hour of PTO for service between 37 to 87 hours, depending on the size of the business.

Funeral and Bereavement Leave

The USA''s Fair Labour Standards Act (FLSA) does not provide payment for any time off taken to attend a funeral. This benefit is typically based on an agreement between the employer and the employee. Most companies in the USA typically provide between one to five days of bereavement leave, with most HR policies providing an average of three days.

Public holidays in the United States

There are currently 11 calendar dates that the US Government has declared as federal holidays. Holiday dates that fall on a weekend are typically observed on the closest preceding or succeeding weekday.

The list below shows the public holidays observed by all regions in the USA.

• New Year’s Day – January 1
• Martin Luther King Jr Day – January 15 to 21(Floating Monday)
• George Washington’s birthday - February 15 to 21 (Floating Friday)
• Memorial Day – March 25 to 31 (Floating Monday)
• Juneteenth National Independence Day – June 19
• Independence Day - July 4
• Labor Day – September 1 to 7 (Floating Monday)
• Columbus Day – October 8 to 14 (Floating Monday)
• Veterans Day – November 11
• Thanksgiving Day – November 22 to 28 (Floating Thursday)
• Christmas Day – December 25

Attracting talent in the United States

Understanding what employees want and value in the workplace is key to defining a talent attraction and retention strategy. Fair pay and good benefits continue to take centerstage; however, various attributes relating to employee well-being and culture have also risen in the ranks.

Companies must find a way to balance the importance of traditional employee values alongside new priorities that have come to the foreground. Making this part of their value proposition to potential employees will help employers optimise their talent attraction and retention strategies.

Here are some important employee values to consider:

A diverse and inclusive workplace

42% of 13,085 US employees surveyed by Gallup want to work for employers that are focused on creating safe and equitable workplaces. And they expect to see accountability in the form of actionable changes that go beyond a performative DEI statement on a website.

According to Gallup, recruiters must be prepared to discuss these actions and commitments as well as answer questions relating to the efforts taken by the company to fulfil their commitment to creating a diverse and inclusive workplace.

Giving employees access to clear and transparent metrics of how a company’s diversity efforts are being measured is key to implementing a DEI policy that is targeted and impactful.

Source: Shutterstock/Jacob Lund

Flexible working options

By providing employees with greater flexibility, businesses are empowering them to have greater control over their work-life balance.

According to Citrix’s Work 2035 Project’s examination of global working patterns, a staggering 88% of knowledge workers want to work for companies that provide flexibility in working hours and location.

Out of more than 2000 workers surveyed, 500 were employees from the US and what's more, they feel that they are highly likely to relocate from urban cities for roles that allow them to work remotely.

One of the greatest benefits of flexible working conditions is that it gives workers the freedom to choose when and where they work, therefore allowing them to work when they’re at their most productive.

A greater sense of purpose at work

In October 2021, Gartner surveyed more than 3,500 employees around the world and discovered that a sense of personal value and purpose is what a growing number of workers want.

65% said that the COVID-19 pandemic made them rethink what they want in life, while 56% feel that they want to contribute more to society.

In the workplace, this can translate to growth opportunities, personalised career development programs, and working for businesses that are just as interested in giving back as they are in turning a profit.

Ultimately, employees want work that isn’t purely transactional. Companies that take the time to invest in their employees and connect with them on a more meaningful level will be the ones to successfully attract and retain today’s new wave of talent.

Practical benefits that focus on mental wellness

Since the pandemic, more than 30% of Americans have reported symptoms of anxiety and depression, according to the National Center for Health Statistics. In 2019, this figure was only 10.8%.

The call for better support in the workplace is a resounding one, and according to Harvard Business Review’s 2021 study, more than 91% of respondents feel that mental health support should be part of a company’s culture.

Another survey by HR tech firm Workhuman also showed that 40% of employees would like improved mental health benefits, and 53% of employees feel that providing mental health days would be helpful to employee wellness.

Mental health is at the forefront of employees’ minds, and employers that prioritise this will not only be able to strengthen their talent attraction and retention strategy but also stand to create an enriching dialogue on what employees truly need to thrive in their work and personal lives and contribute to this.

Termination of employment in the United States

Under US law, both employers and employees enter a working relationship on an “at-will” basis which also means that either party can choose to terminate the employment relationship for any reason and without notice. This is provided that the ground for termination is not for a discriminatory reason.

In any case, employers should ensure that all employment-related documents, such as employment agreements and company policy handbooks, support the at-will relationship. These documents should:

• Not contain any provisions that create a contract undermining an employee’s at-will status
• Include a disclaimer stating that:
  • Disciplinary procedures and policies do not modify the at-will employment relationship and do not create a contract of employment
  • The employer maintains the right to skip, repeat or modify disciplinary procedures at its discretion

Small or newly established businesses that don't have formal employment policies should make it a point to ensure that all employee communication reiterates the at-will relationship.

Collective dismissals

In the event of collective dismissals, the Workers Adjustment and Retraining Notification (WARN) Act required covered employers to provide at least 60 days’ notice in advance in the event of plant closings or mass layoffs to:

• The affected workers or their representatives, i.e., a labour union
• The state dislocated worker unit where the plant closing or mass layoff takes place
• The local chief elected official

This notice is intended to provide workers and their families with time to prepare for potential unemployment, seek out new means of employment, or enter training and upskilling programs to help them successfully compete in the job market.

The WARN act currently covers companies with 100 or more employees. Employees must have worked for a minimum of six months with the same employee and for a minimum of 20 hours within a seven-day work week to be protected by the act.

The act currently does not protect:

• Workers participating in strike actions or that have been locked out in a labour dispute.
• Workers employed on temporary projects or facilities of the business who understand the temporary nature of their work when hired.
• Business partners, consultants, or contract employees assigned to the business but who have a separate employment relationship with another employer and are paid by that other employer or who are self-employed.
• Regular federal, state, or local government employees.

Individual dismissals

There is currently no law dictating a formal procedure when discharging individual employees. In these cases, the termination is subject to whatever agreement is stipulated in the employment contract or collective bargaining agreement.

Severance pay

US federal law does not require employers to offer severance pay. It is usually based on an agreement between the employer and the employee (or the employee’s representative). If severance pay is granted to the employee, the amount is typically determined by their length of employment prior to the termination, and a signed release in favour of the employer is required.