If you’re new to doing business in the US, employee benefits, paid time off, salary expectations, and communication styles are just a few of the many differences you should be aware of.
This blog is going to shine some light on the legal employment rights to work in the US, but mostly focus on what is culturally acceptable based on our international clients’ experience of engaging workers in the US.
Employment Contracts in the US vs UK
Typically, when an employee is hired in the US, they often only receive an offer letter and an HR handbook rather than a detailed written employment contract, which is offered in the UK.
Within US employment contracts, employees are hired ‘at will’,this means that the employer or employee can terminate the employment at any time, with or without any notice. All employment contracts in the US should remain ‘at will’ unless the employer requests a termination notice. This can be surprising to UK employers who expect at least one month’s notice for most positions, which can increase depending on the seniority.
Employees in the UK can be viewed as having better job security as their employment is under contract, legally requiring up to 12 weeks notice depending on the length of service. The minimum employment termination notice required in the UK is usually 4 weeks.
Although the employment contract termination notice in the UK means better job security, it doesn’t necessarily mean that contingent contract workers in the US on short-term contracts would expect no notice/at-will employment. It is generally customary for an employee and employer in the US to give at least two weeks’ notice before terminating their contract to not damage the relationship, but it is not required.
UK Salaries vs US Salaries
Doing your research on the different UK and US salaries is key to help you attract and retain the right employees when you start hiring in US market. The salary expectations within each sector and roles differ and are often much higher in the US than in the UK, due to the cost of living being exceptionally higher.
US salaries vary from state to state, with popular locations such as New York and California offering much higher salaries than less popular states. Salaries in the US can also vary based on job roles and seniority.
For example, a software developer in the US makes a median of $130,160 per year, whereas the average salary for a software developer in the UK is between £30,000 – £70,000.
Working Hours in the US vs UK
Tea breaks are a staple in the UK, not so much in the U.S… or “coffee breaks” which the US Department of Labor (DOL) prefers to coin short breaks. According to the US DOL, federal law doesn’t require lunch or short breaks.
Subsequently, Americans generally tend to take fewer breaks away from their desks. However, some states have now introduced meal break requirements including California, where they are entitled to off-duty meal break-duty meal break of at least 30 minutes. It is important to note that some states do require meal breaks after a certain number of hours worked. Not taking a break could also put the worker into unauthorized overtime.
Whereas, in the UK, it is common practice to take at least a 30–60-minute lunch break. UK employees are entitled to an 20-minute break allowance if they work more than six hours a day.
Holiday Entitlement in the US vs UK
UK employees are legally entitled to at least 5.6 weeks of paid holiday leave (including public holidays) under employment law. However, in the U.S, the Fair Labor Standards Act (FLSA) Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick leave or federal or other holidays. Instead, these benefits are to be agreed between the employer and an employee in the US. It is commonplace to offer holiday entitlements in the US as a perk to attract talent.
Although the number of days off differs per employer in the US, 10 days of vacation is the average allowance offered. Surprisingly, the average US employee often only ends up using half of their vacation allowance each year.
Bank Holidays in the US vs UK
Workers in the UK benefit from extra days off in the form of bank holidays or ‘federal holidays’ as they are referred to in the US. UK seasonal bank holidays such as the Spring Bank Holiday and Boxing Day are not offered in the US, meaning US offices are still open during these days.
Employees in the US will expect the office to be closed during traditional American holidays that the UK doesn’t observe. US federal holidays include:
- New Year’s Day – January 1st
- Martin Luther King Jr Day – Third Monday in January
- Presidents’ Day – Third Monday in February
- Memorial Day – Last Monday in May
- Independence Day – July 4th
- Labor Day – First Monday in September
- Columbus Day – Second Monday in October
- Veterans’ Day – November 11th
- Thanksgiving – Fourth Thursday in November
- The day after Thanksgiving
- Christmas Day – December 25th
A US holiday worth highlighting is Thanksgiving, which to many Americans is just as important to celebrate as Christmas. Thanksgiving falls on the fourth Thursday of November. The holiday symbolizes the beginning of the holiday season (Christmas season) and the act of giving thanks.
It is important to note that not all these holidays are legally required to be offered by businesses in the US and depends on the individual company policies. For example, Presidents’ Day is only offered by some businesses at their own discretion.
Paid Sick Leave in the US vs UK
UK employees are graced with a generous allowance of up to 28 weeks of paid sick leave (PSL) via Statutory Sick Pay, unlike their American counterparts who are entitled to zero days of paid sick leave dependent on the state.
Sick leave is generally unpaid in the US. Additional job-protected leaves are also provided unpaid. It is the US employer’s discretion whether employees can receive sick leave and depends on the state you are operating in. According to the Department of Industrial Relations, employers in California must provide at least 40 hours or five days of PSL each year to workers. However, they must have worked for the same employer for at least 30 days within the year and completed 90-days of employment before taking paid sick leave.
The Family and Medical Leave Act (FMLA) requires employers with over 50 employees to provide up to 12 weeks leave to eligible employees, however, they will not receive payment for the time off.
Reasons for paid sick leave in the US can include:
Maternity Leave
The birth and care of a new-born child of an employee
Personal Emergencies
To care for an immediate unwell family member
Health Reasons
To take medical leave when the employee is unable to work due to a serious medical condition
One of the biggest UK vs US work culture shocks is that women are federally not entitled to any paid maternity leave. The UK’s statutory maternity pay lasts up to 52 weeks, which is much more generous in comparison to the US. During maternity leave in the UK, an employee is entitled to 6 weeks receiving 90% of their average weekly pay, and for the next 33 weeks, either £187.18 a week or 90% of their average weekly pay (whichever is lower).
Only thirteen states plus, the District of Columbia have their own paid family leave laws. This is also covered by the state not the employer. Therefore, before choosing a specific state to hire employees in, it is important to know the different benefits and offerings for your employees in the US.
Health Insurance in the US vs UK
When comparing the US vs UK healthcare systems it could be said that they are at opposite ends of the spectrum. The UK system is nationalized and offers universal coverage to all, regardless of social class or income via the NHS (National Health Service). This means that the UK employees’ income is deducted to fund the NHS at approximately 20% of their total income tax.
In the US, there is no state-sponsored healthcare, instead, employees are required by Federal law (ACA) to have it covered by their employer. The employer will be required to cover a portion of their monthly premiums. Different plans offer varied coverage, so an attractive healthcare plan can be a huge deciding factor when employees are searching for their next role.
If you are entering the US market, you should be aware that employees can only change their coverage/opt-in once per year during a very specific timeframe. Making your US employees aware of this enrolment period is crucial, as if they misunderstand or choose the wrong coverage, which means they will have to wait a whole year to modify their healthcare plan.
Considering Hiring In the US?
If you are planning on hiring workers in the US and are coming from a UK background, it is very important that you educate yourself on the differences between UK vs US work cultures.
If you want to grow your business in the US and attract top talent; the way you communicate, the benefits packages you offer, and many other factors of doing business have to adjust to meet American expectations. At Workwell Global we make hiring talent; whoever and wherever in the US work for you.
Book a call with our employment experts today. They’ll guide you through the healthcare insurance benefits your US employees can receive under our USA Employer of Record
solution and how we can simplify your payroll and employment processes in line with local US labour laws.
Disclaimer: The information provided here does not, and is not intended to, constitute legal or accountancy advice. Instead, the information and content available are for general informational purposes only.