Insight into U.S. Human Resource Policies
There are a number of differences in human resource policies between the U.S. and Canada, making it important for Canadian businesses owners considering a U.S. expansion to fully understand regulations. Policies and procedures that focus on employees and comply with Federal and State Labor laws are imperative.
Q: Can a U.S. employee be dismissed without minimum notice or “pay in lieu of notice” (severance)?
A: Yes. “At will employment” exists in most States in the U.S. This allows an employer to dismiss an employee, usually for good reason, without the obligation of paying severance or minimum notice as is required in the Ontario Employment Standards Act (ESA).
Q: What are the minimum vacation periods and mandatory holidays in the U.S.?
A: There aren’t any. Decisions as to how many vacation days or the paid holidays that an employee earns are at the discretion of the employer and can be designed to meet the needs of the company as well as the employees.
Q: How is medical insurance obtained?
A: Employee benefits play an increasingly important role in the lives of employees and their families and can have a significant financial and administrative impact on a business. Employee benefits in the US are handled differently than Canadian public insurance (eg. OHIP) and health insurance plans and premiums can vary dramatically across the U.S. Typically; the company will negotiate with insurance plan providers to determine the best plans for that worksite. The employer then determines how much of the premium will be company-paid based on financial capabilities and what they need to be competitive in order to recruit the caliber of employees they need.
Q: What are the allowable payroll frequencies in the U.S. (weekly, biweekly, etc)?
A: Similar to Canada, the choices can be weekly, bi-weekly, semi-monthly and monthly. It is important to know which one to use based on the State in which you have operations. For example, in New York State – laborers are mandated to be paid no less than weekly while administrative staff can be paid bi-weekly.
Q: Can I mandate that my workers receive their pay via direct deposit?
A: No. You cannot mandate that employees receive their pay via direct deposit only. A company is required to provide a live paycheck if preferred by the employee.
Q: What are the mandatory U.S. policies for medical and/or maternity leave?
A: In the U.S., maternity and medical leave are covered by a 12 week “UNPAID” time frame. Employers have the availability to allow employees to use accrued vacation/sick time as well as crafting their own policies as to what benefits will be made available during the employees leave. These policies should ensure equal treatment of employees so as to avoid being seen as discriminatory. Some cities have instituted mandatory paid leave policies but most companies have a well-crafted PTO policy already accommodate these rulings.
Q: What is the minimum wage rate in the U.S.?
A: Minimum wage varies by state in the U.S. While the Federal minimum wage is $7.25, some states set a higher minimum wage through state legislation. In New York State, the minimum wage will be $9.00 effective 12/31/15.
John H. Bradley, Regional Vice President, Alcott HR
Alcott HR is a Professional Employer Organization specializing in administering U.S. employees for Canadian corporations.