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Employment benefits in the U.S.
From health care and life insurance to paid leave and childcare, discover the benefits that workers can expect to receive in the U.S.
Health benefits packages in the U.S.
Most American employers offer generous benefits packages to their employees. Any expat thinking of relocating to the U.S. should ask their employer what they can expect and research all potential benefits. There isn’t a uniform rule for the different employee benefits on offer. While few benefits are statutory, many companies realise that the only way to attract skilled workers and to ensure a happy and productive workforce is to offer a wide range of enticements.
Health care
American health care is often praised as offering some of the best medicine and procedures in the world. This system comes at a price though, and this is why anyone thinking of relocating to the U.S. should talk to their private health insurance provider. Many companies offer health care insurance to their employees. When negotiating your package, it’s also a good idea to ask about dental and vision insurance. Some employee insurance plans cover the whole family — others don’t. Also, make sure that your health care insurance will cover the costs of your prescription drugs. You should always carry your health insurance card with you; if you have an accident, you’ll be asked to show this at the hospital.
Fully state-funded health care doesn’t exist in the U.S.. There are government schemes, including Medicare and Medicaid services, but even under these the patient will have to make some form of financial contribution. Currently, the average U.S. adult spends $10,000 per annum on health care. Treatment practices and health facilities vary from state to state, which is worth bearing in mind when you’re choosing where to relocate. Louisiana has the worst health care in the Union and Hawaii has the best, according to a 2017 poll.
Paid leave
Most U.S. employers will give their workers 10 days’ paid holiday a year. There isn’t a statute that says that an employer has to give you any paid holiday at all, but in practice most employers will offer their employees some paid leave. The U.S. is proud of its work ethic and the fact that some businesses are open 24/7. You’ll be expected to put in the hours and you should be paid overtime for doing so. Most firms will offer you a 40-hour week, though some professions expect their employees to work considerably harder and longer. Punctuality is key and if you’re late for work, you can expect your pay to be docked.
Working parents
Paid maternity leave isn’t obligatory, but most companies offer their employees eight to 10 weeks’ paid maternity leave and an average of four weeks’ paternity leave.
Childcare is available for working parents across the U.S., but it’s pricey. A recent article stated that in 10 states, childcare is more expensive than forking out for a mortgage, or at least 20% of your salary. Washington DC, California and Massachusetts are three of the most expensive states to care for your child when working.
On the upside, 7% of U.S. companies offer on-site childcare to their employees, and when you are negotiating your benefits package with your new American employer, it’s always worth asking whether childcare is included in the deal. Flexible Savings Accounts (FSAs) are another way that employers can help working families look after their children during the week. Some employers offer $5,000 towards employee’s childcare costs before tax is deducted. Another method that U.S. employers use to help their staff with childcare costs is the Dependent Care Assistance Program (DCAP) where employees can make use of a pre-tax option and deduct day care expenses from their pay. This amounts to a rebate of $2,500 a year.
Another way of helping working parents with childcare costs is when employers have a relationship with a local childcare centre, which in turn benefits the worker in terms of the discounted fees that can be negotiated.
Retirement benefits
If you’re planning on relocating to the U.S. on a permanent basis you should also check out if your employer is offering a retirement plan as part of the package. A defined benefit plan is where the employer contributes to the employee's account that comes with a guaranteed income on retirement. This type of plan has become increasingly rare in recent years, with only 30% of American companies offering to contribute to their employees’ pensions. It’s also a very good idea to ask what will happen to your accrued funds if you leave the company before your retirement age; in some cases, this type of pension isn’t portable.
Defined contributions are a more common part of the employees’ package, where you have to save a certain amount of pre-tax dollars and then manage the account and investments yourself. Employers do match these contributions, which vary from employer to employer.
All these benefits may be on offer in your new job, though they are not compulsory. Approach your new company with a wish list and ask what’s on offer.
Learn more about what you can expect from working in the U.S.
Prices correct April 2019.
“While few benefits are statutory, many companies realise that the only way to attract skilled workers and to ensure a happy and productive workforce is to offer a wide range of enticements.”
