Global Compliance in America: What you need to know
Organisations with offices in multiple locations across the world need to be aware of the different global compliance rules which are particular to different countries.
Maximum weekly working hours in America for example, are different to those in Europe – as are things like holiday entitlement and regulations around different types of absence and leave, such as sickness leave, maternity and paternity leave.
We have further information for global compliance and working hours in Europe and the DACH region – and below we are looking at a few key states in the United States and the varying compliance rules each has.
California
Under California law, workers are classified as either exempt or nonexempt employees, depending on the industry and/or type of work they do.
The maximum weekly working hours is 40 hours, or eight hours per day. If this is exceeded by nonexempt employees, they are entitled to receive paid overtime.
Exempt employees are generally employed in ‘white collar’ roles – such as administrative, executive, licensed professionals, IT and outside sales, and are not entitled to receive overtime pay if their work week exceeds 40 hours.
Holiday entitlement
In California, employers are not required to provide any paid or unpaid annual leave to their employees. However, many employers do offer vacation time as a benefit.
Vacation leave is considered wages, so it is earned according to the amount of work performed. Some employers may implement a waiting period for an employee to start earning leave – for example they are not entitled to earn vacation time in the first six months of their employment. It is also possible for employers to place a cap on the amount of earned vacation time that an employee can accrue – for example four weeks per year – at which time the employer can ask an employee to take some holiday, or it will be paid out to the employee at the end of the year.
Sickness Leave
Employees working in California are entitled to paid sick leave. This is accrued – for every 30 hours worked, the employee will earn one hour of paid sickness time. So over the course of working 40 hours per week for six weeks, the employee will have earned eight hours of paid sick leave.
Maternity and Paternity Leave
California offers Paid Family Leave, which can be used by new mothers and fathers, but also by individuals who need to take time off to care for a seriously ill family member, or to participate in a qualifying event because of a family member’s military deployment.
This leave provides benefits payments people who are eligible, usually 60-70% of their weekly wages, and amounts to a maximum of eight weeks.
New York
In New York, employers are not restricted to a 40-hour work week. This means employers have the authority to require employees to work for more than 40 hours in any given week, but it does require paid overtime.
Holiday entitlement
Like California, employers in New York are not required by law to provide paid vacation time to employees. As a result, employers are free to decide their own vacation policy – ranging from allowing a few days of paid leave for per year, to two weeks or more.
Sickness Leave
Paid sick leave in New York works in the same way as it does in California, so on an accrual basis. Employees working in California are entitled to paid sick leave. For every 30 hours worked, the employee will earn one hour of paid sickness time.
Employers with one hundred or more employees must provide up to 56 hours of paid sick leave per year. For employers with 5-99 employees, it is 40 hours per year. And for employers with fewer than five employees and a net income of less than $1million, they must provide up to 40 hours of unpaid sick leave. For employers with fewer than five employees but a net income of more than $1million, they must provide up to 40 hours of paid sick leave.
Maternity and Paternity Leave
New York offers Paid Family Leave, which can be used by new mothers and fathers, people taking care of seriously ill relatives or those with relatives going into military deployment. Paid Family Leave can be for up to 12 weeks, and the employee will receive 67% of their average weekly wage.
Washington
The maximum weekly working hours in Washington is 40 hours (eight hours per day). Beyond this, some employees, depending on their industry and/or job role, are entitled to receive payment for any overtime worked.
Holiday entitlement
Washington State does not require employers to provide holiday entitlement to employees. Instead, vacation time is offered as a benefit by the employer, and the details of which are laid out in the employer’s company policy. Much like other states, vacation time is earned (usually between 14-25 days per year) depending on the employee’s length of employment.
Sickness Leave
In Washington State, full-time employees earn one day of sick leave each month. Part-time employees earn sick leave on a pro rata basis.
Maternity and Paternity Leave
The Federal Family and Medical Leave Act entitles employees to up to 12 weeks of paid leave, if they have been employed for at least 12 months and have worked at least 1,250 hours during the previous 12 months. This covers parents caring for a newborn child, foster or adoptive parents, if an employee has a serious health condition, and for people caring for a parent, spouse or minor/dependent child who has a serious health condition.
Florida
The maximum weekly working hours in Florida is 40 hours (eight hours per day). Beyond this, some employees, depending on their industry and/or job role, are entitled to receive payment for any overtime worked.
Holiday entitlement
As in many other states, Florida employers are not required by law to provide paid annual leave to employees. Many employers do however provide vacation time as an added benefit, and this is outlined in the employer’s company policy or employee handbook.
In Florida, an employer can enforce a ‘use it or lose it’ policy when it comes to taking holiday, preventing employers from saving up vacation days. The employer can require an employee to take vacation time by a certain date or forfeit their right to use it.
Sickness Leave
Employers in Florida are not currently required to provide paid sick leave – however many do as an added benefit to employees, and typically this is accrued based on how many weekly hours you work.
The Federal Family and Medical Leave Act entitles employees to up to 12 weeks of paid leave, if they have been employed for at least 12 months and have worked at least 1,250 hours during the previous 12 months.
Maternity and Paternity Leave
The Federal Family and Medical Leave Act can be used to take maternity or paternity leave following the birth of a newborn, or if an employee is ill themselves, or they have to care for a parent, spouse or minor who has a serious health condition. This leave can be for up to 12 weeks.
Texas
The typical working hours in Texas are 40 hours per week – if an employee works more than this, they are entitled to paid overtime.
Holiday entitlement
No current Texas or federal law requires private-sector employers to provide paid or unpaid leave of any kind to its employees. However some unpaid leave may be negotiated in special circumstances to make reasonable accommodations in the event of disability, pregnancy or some other health issues.
The majority of employers in Texas do provide paid annual leave, but how much leave is decided by the employer itself, as long as it is clearly stated in the company policy or employee handbook.
Sickness Leave
There are no Texas State or federal law which requires employers to provide paid sick leave to employees – however, many companies do as a way of recruiting talent to their workforce. This will usually be some form of accrued sick leave laid out in the employer’s company policy.
As in other states, the Federal Family and Medical Leave Act entitles employees to up to 12 weeks of paid or unpaid leave, depending on their eligibility.
Maternity and Paternity Leave
Like many other states, Texas does not mandate any kind of maternity or paternity leave – though some employers may choose to offer it.
Employees are entitled to use the Federal Family and Medical Leave Act – which allows for up to 12 weeks of paid or unpaid leave, depending on the employee’s eligibility, to bond with a newborn, care of a seriously ill spouse or child, or to take rest if they themselves have a serious health condition.
Washington, DC
The standard weekly hours worked in Washington, DC, is 4o hours – with eligible employees receiving overtime pay for anything above this.
Many organisations within Washington, DC follow the standard 9am-5pm work day, however as the hub for many federal operations, work patterns can be quite different in the District of Columbia compared with elsewhere in the United States.
Holiday entitlement
Employers in Washington, DC are not required to provide any vacation leave, either paid or unpaid. Many companies do offer it however, and decide on the nature of their vacation accrual schedules in their company policy or employee contracts.
Sickness Leave
In Washington, DC, companies with 24 or fewer employees have to provide up to three days of paid sick leave, companies with 25-99 employees have to give five days, and companies with one hundred or more employees have to give seven days of paid sick leave.
Maternity and Paternity Leave
As of 2020, the District of Columbia began implementing paid leave benefits. This mean that employees working in Washington, DC can apply for Paid Family Leave, which includes:
- up to 2 weeks for an expecting mother during her pregnancy
- up to 12 weeks to bond with a new child
- up to 12 weeks to care for a family member with a serious health condition
- up to 12 weeks for an employee to take time off due to their own serious health condition
Arizona
Like many other states, Arizona does not have its own state laws regarding maximum weekly working hours. Instead, federal law states that eligible employees who work more than 40 hours per week are entitled to paid overtime.
Holiday entitlement
Employers in Arizona are not required to provide paid or unpaid annual leave to employees. That said, many do, and it works on the same type of accrual basis as many other states.
Arizona employers can also enforce a ‘use it or lose it’ policy when it comes to deciding when employees take leave by a certain date or risk forfeiting their right to use it.
Sickness Leave
In Arizona, employers are required to provide their employees with paid sick leave. For every 30 hours an employee works, they accrue one hour of paid sick leave time.
If a company has 15 or more employees, employees can earn up to 40 hours of paid sick per year. For businesses with fewer than 15 employees, this figure is 24 hours of paid sick leave per year.
Maternity and Paternity Leave
As with most states, Arizona does not have its own laws regarding maternity and paternity leave. Instead, employees can benefit from the Federal Family and Medical Leave Act, which entitles them to either paid or unpaid leave for up to 12 weeks, to look after a newborn child, to care for a sick spouse or child, or to care for themselves if they have a serious health condition.
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