If you’re hiring employees in the U.S., you’ll need to make sure you’re staying up to date with all the federal and state requirements for compensation and benefits. On a surface level, the U.S. doesn’t have many laws regarding compensation and benefits for employees — but if you want your company to be able to compete with other employers, you’ll still need to offer certain benefits.
U.S. compensation laws
Many aspects of compensation are determined at the state level in the U.S. and, therefore, can vary, in some cases quite drastically, from state to state. However, some federal standards apply to the country as a whole. One of these standards is the Fair Labor Standards Act (FLSA), which outlines requirements for minimum wages, overtime pay, equal pay, and record-keeping. Under the FLSA, employers must adhere to the following guidelines:
- All employees are entitled to a minimum wage of USD 7.25 per hour. In many states, counties, and cities, the minimum wage is higher than the federal rate.
- With a few exceptions, employees must be paid 150% of their regular pay for all hours worked in excess of a standard 40-hour workweek.
- Employers must keep a record of employees’ wage and working hours information, including their regular hourly rate and total wages per pay period, and some states require disclosure to employees on a regular basis.
Guaranteed benefits in the U.S.
Generally, in the U.S., employees are not guaranteed any benefits. However, most companies provide benefits packages as incentives to work with them. Most benefits packages in the U.S. include:
- Paid time off in the form of vacation and sick days.
- Medical, dental, and vision insurance plans.
- Retirement benefit plans, such as a pension or 401(k).
Some companies provide additional benefits such as relocation assistance, parental leave, and childcare benefits. Companies in highly competitive industries often offer more benefits as a way to attract top talent.
U.S. benefits management
The employer is responsible for disbursing any locally required benefits and upholding the terms set forth in the employment offer or contract.
Restrictions for benefits and compensation
U.S. compensation and benefits laws can vary from state to state. There are 50 states in the U.S., and they each have their own set of regulations and expectations when it comes to employment. Before hiring in any state, companies should become familiar with local requirements and restrictions regarding benefits and compensation.
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