United States Employer of Record

When negotiating terms of an employment contract with a candidate in the United States, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave 
Employers in the U.S. are not required to provide any paid maternity leave, although many offer it as a benefit. As a result, the duration and the amount of compensation vary.

The Family and Medical Leave Act (FMLA) is a federal law which entitles eligible employees of covered employers to take up to 12 weeks a year of job-protected, unpaid leave for specified family and medical reasons. FMLA applies to companies with 50 or more employees as well as federal, state and local government agencies and schools both public and private.

FMLA can be taken to care for a new baby, an adopted child or a child in foster care; to care for a spouse, child or parent with a serious health condition; for one’s own serious health condition; and, as the result of the employee’s spouse, child or parent being on active duty or being called up for duty in the U.S. National Guard or Reserves.

To be eligible for FMLA leave, an individual must meet the following criteria:

• Be employed by a covered employer and work at a worksite within 75 miles of where that employer employs at least 50 people
• Have worked at least 12 months (which do not have to be consecutive) for the employer
• Have worked at least 1,250 hours during the 12 months immediately before the date

Additionally, 26 workweeks of leave during a single 12-month period may be taken to care for a spouse, child, parent or next of kin who is a covered servicemember with a serious injury or illness.

Vacation
Employers are not required to offer any paid vacation time, although most offer it to salaried employees in order to remain competitive, and some offer it to employees paid by the hour as well. The amount given differs from company to company, but two to four weeks is customary, with more offered according to an employee’s seniority.

Many employers in the U.S. have switched from paid vacation and sick leave to Paid Time Off (PTO), where an employee can take a certain number of paid days off each year for any reason. Unlimited PTO is becoming more popular as well.

Holidays
There are 10 federal holidays in the U.S.:

• New Year’s Day
• Martin Luther King, Jr. Day
• Presidents’ Day
• Memorial Day
• Independence Day
• Labor Day
• Columbus Day (celebrated in some places as Indigenous Peoples’ Day)
• Veterans Day
• Thanksgiving Day
• Christmas Day

Employers are not required to offer any paid holidays, although most do. Non-government employers do not typically observe Columbus Day (or Indigenous Peoples’ Day) or Veterans Day, but usually add the Friday after Thanksgiving, Christmas Eve Day and New Year’s Eve Day.

Some employers, especially when required by a collective bargaining agreement, pay time-and-a-half or double-time to employees who work on federal holidays.

Sick leave
Employers are not required to offer any paid sick leave, though many do.

Health coverage
Health insurance is one of the most important benefits of employment in the U.S. There is no publicly funded healthcare, with the exception of Medicaid for citizens who meet certain low-income thresholds and Medicare for those 65 or older.

Under the Affordable Care Act (ACA), employers with 50 or more full-time employees (or the part-time equivalent) must provide health insurance to 95% of their full-time employees or pay a penalty of $3,860 per employee per year to the federal government. As a result, most large employers offer health insurance. Insurance must meet minimum requirements for coverage and affordability, and coverage must also be extended to the employee’s dependents (biological or adopted children under the age of 26). Spouses, stepchildren and foster children are not considered dependents.

Employers and employees typically share the cost of health insurance. This usually includes medical, dental and vision benefits.

Smaller employers are not obligated to offer insurance, but many do. How much coverage is offered and how costs are shared vary.

As your employer of record in the United States, we can provide a range of medical insurance plans for professionals and their dependents.

Pension
Employers are not required to offer any kind of retirement savings plan. Many choose to offer employees the opportunity to invest pre-tax dollars into a 401(k) fund, and some employers match contributions up to a certain amount.

Employees are entitled to receive partial Social Security benefits from the federal government beginning at age 62, or full benefits at age 70.

Workers’ compensation
All states require employers to have insurance to compensate employees who suffer workplace injuries or illnesses through no fault of their own.

The premiums employers pay for workers’ compensation insurance are determined by a combination of private insurers and insurance rating bureaus, which for each state either is the insurance rating bureau specific to that state or the National Council on Compensation Insurance (NCCI).

Each state’s minimum and maximum benefits are determined by a state government agency, usually the state’s labor department or industrial commission.