Employee Benefits in the USA


The United States is undoubtedly one of the dream destinations for anyone looking forward to climbing the corporate ladder and touching new career milestones. However, it looks equally promising for people looking forward to starting a new business in the USA. When it comes to such cases, one of the most important things is to get well-versed with employee benefits as it forms one of the critical elements of employee management.

Healthcare and insurance

Health care and insurance are essential components of employee benefits in the US. Special provisions exist for employers who do not offer affordable support for health insurance. In such cases, the employer is usually subjected to an annual shared responsibility as a penalty of up to $2570 per full-time employee. This is most likely to happen if employers fail to offer health insurance to at least 95% of their dependents and full-time employees. In some instances, employers may also have to provide their employees with other health insurance benefits if mentioned in the employment agreement.

Social security support

The US law is known widely for its retirement benefits and subsidized health insurance support as a part of the Federal social security and Medicare campaigns. As per the law, employers must contribute up to 6.2 % of each employee’s salary to the social security contribution, along with 1.45% of the salary of each employee to the Medicare contribution. In such cases, equal contributions are taken as a value from each employee’s wages and represent the overall employee contribution.

These federal programs usually provide social benefits for the disabled, children of deceased employees, and retired employees. Usually, social security benefits include disability insurance, survivors, and old age support, while Medicare provides aid for hospital insurance benefits.

Annual leave and holidays

Although the US government and law recognize certain events for national holidays, no federal law requires American employers to provide their employees with a holiday on such occasions. Regardless, employers usually provide employees with paid leave on any national or local holiday. Examples include New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Apart from this, some states in the US require their employees to work on a few holidays, for which they usually get higher remuneration. Similarly, there is no mandatory rule that provides employers to provide employees with paid vacation.

Maternity and paternity leave

As per the Family and Medical Leave Act, any employer with 50 or more employees within a radius of 75 miles must mandatorily provide its employees with 12 weeks of unpaid leave in a year in case of birth or a child’s placement. In addition, other state laws also provide for maternity leave for their employees that are not usually covered under the FMLA regulations.

In other states, workers are provided with partial pay during their paternity leave, while there is a kind of trend concerning the overall state family leave law. Therefore, if we specifically talk about the rules and regulations concerning paternity leave in the US, there is a difference. In significant states, male employees are entitled to up to 12 weeks of unpaid and secured paternity leave.

However, when male employees use their time off as an unexpected right, unpaid leave usually gets too expensive for many families. However, the situation is slightly different in cities in California, Massachusetts, New York, New Jersey, and Washington in the district of Columbia. Here, employees usually get active paid paternal leave in contrast to other states in the US.

Disability and sickness leave

Employees in the US are entitled to unpaid sick leave, which allows them to take up to 12 weeks of annual and paid medical leave under severe health conditions. Usually, in such cases, the health conditions of an employee prevent them from doing their task at the job. However, there is no National Law that guarantees the rules concerning paid sick leave, except in several states and cities where employers usually offer paid sick leave. Apart from this, a disabled employee is also entitled to unpaid leave as per the FMLA act. Therefore, it forms an integral part of the overall employee benefits in the USA.


In the US, companies are not mandatorily required to provide employee pensions or any other retirement benefits unless it is provided in the employment agreement. While many American companies do provide pensions along with other retirement benefits to the Employees, usually in the form of savings plans applicable after retirement, it is not common to find such employee benefits. These are often defined as contribution plans usually named after the respective section belonging to the internal revenue code recognized by the law. Therefore, the matters of employee benefits, including pension, usually depend on the employment agreement existing between an employer and their employee.

Other Benefits 

Some companies also provide many other additional benefits which are not mandatorily required, but there are usually provided depending on the size and the industry. Other popular employee benefits in the United States include long-term and short-term disability insurance, dental insurance, commuting, and travel assistance, and wellness benefits. Many companies also provide vision insurance, life insurance, health insurance, and many other employee benefits that are not popular but substantially exist as a part of employee benefits in the US.

The US law recognizes the needs of both employers and employees and that the rules and regulations are not uniform throughout the country. While some rules apply across the nation, they are not supposed to be followed in a few States. A few exceptions exist, such as in California, New York, New Jersey, and Washington, where these rules apply differently. Nevertheless, it is necessary to have a clear idea of the rules that apply only in a few States and the ones that are applicable everywhere in the US except in cases where the condition is mentioned in the employment contract.