One golden rule for a person planning to work overseas is: take nothing for granted. This applies just as much to the United States as it does to some country in the Third World; for while superficially things may look the same as they do back home, they seldom are.

This is certainly true with respect to the world of work. US employment laws and working practices may be different from those you are used to. Contracts, for instance, are less likely to be open-ended; in fact, many people are on short-term contracts and new agreements have to be negotiated every two or three years. Moreover, American employers are in a position to terminate a job at any time without justification.

In some respects employees in the United States receive less protection than workers in Europe. That is not to say that America has no labour laws; in fact, there is plenty of legislation both at the federal and state levels, some of it extremely detailed. It is designed to prevent unfair employment practices and discrimination, and to regulate the health and safety of employees.

Your best protection, however, is the contract that you sign. It should spell out the terms and conditions of your employment clearly, so that if your employer should renege on any parts of the agreement you can take him to court. As Americans are somewhat litigious by nature, legal disputes with employers are not uncommon.

YOUR CONTRACT

At the end of Chapter 4 you saw what conditions you should look for in a contract signed in the UK or Ireland.

What should I look for in a USA contract?

A contract signed in the United States should include:

• the name and address of your employer
• your job title and responsibilities
• the staff member you are answerable to
• the location of your employment
• your net salary and dates of payment
• the commencement date and duration of your employment
• the working hours.

Statutory benefits

In addition to pay there are three benefits that the employer is required to provide by law:

Social security payment

He has to make a eontribution to your Social Security account (the equivalent to National Insurance in the UK) with the Federal Government.

Unemployment compensation

Your employer must pay into the Government insurance programme that pays unemployment benefit to employees who lose their jobs. The employee does not have to contribute to the scheme.

Workmen’s compensation

The employer also has to bear the full cost of contributions to this scheme which provides benefits to employees injured or disabled at work.

Discretionary benefits

The other benefits are discretionary (ie employers are not required by law to provide them, though most of them offer at least some). When negotiating your contract you need to pay attention to these points.

Vacation

Vacation entitlements are modest by European standards: seldom more than two weeks per annum except for senior employees, while a new employee might only get one week off.

In addition there are various public holidays: New Year’s Day, Memorial Day (last Monday in May), Independence Day (4 July), Labor Day (first Monday in September), Thanksgiving (fourth Thursday in November) and Christmas Day. Note that a lengthy break at Christmas is unusual.

Sick leave

Employees are allowed to take a specific number of days each year for sickness or compassionate leave – typically six days in all. Note that visits to the dentist or doctor during the working day may be deducted from your sick leave entitlement.

Life insurance

Many employers offer low-cost or free life insurance, normally based on the employee’s salary.

Medical insurance

Traditionally businesses have provided health care insurance for their staff, but as the cost of health care rockets some have started to cut back on benefits. When negotiating your contract you should make sure that the provision offered will be adequate for your needs. (See below.)

Pension plans

As in the UK there are company pension plans, some of them funded entirely by the employer, others requiring contributions from both employer and employee. If you are working on a short-term contract, you may be ineligible for such a scheme.

Other benefits

These would include profit sharing schemes (normally restricted to long-term employees), training allowances, social and sports facilities, counselling, low-cost loans. Company cars and luncheon vouchers are not very common.

MEDICAL MATTERS

In the United States there is no government funded health service catering for everybody on the lines of the National Health Service in the UK. True, government spending on healthcare amounts to $1 trillion (6.3% per cent of GDP, compared with 5.8% per cent in the UK) but this tends to be limited to the over-65s and the long-term disabled. Over 40 million Americans have no health insurance at all.

Medical costs in America are high, and you must expect to spend eight times more on healthcare than you would in the UK. Even a routine visit to the dentist can set you back a tidy sum. That is why you ought to make sure that you and any dependants you have in the United States have adequate medical insurance cover.

Fortunately, many employers have company medical plans for their staff, and around 90 per cent of employees with private health insurance are covered by such plans. However, a number of these plans cover only a proportion of the expenses incurred (normally between 70 and 90 per cent), and may exclude dental care. So you may need to explore the possibility of topping up your employer’s scheme with an individual policy.

Sickness benefit is provided by:

• the federal government in the case of disabilities that are total and permanent
• certain states for short periods of illness or disability
• private insurance plans in other states. These are often funded by employers.

The Health Insurance Association of America publishes some useful consumer guides, including The Consumer’s Guide to Health Insurance, The Consumer’s Guide to Medicare Supplement Insurance and The Consumer’s Guide to Disability Insurance.

WORKING PRACTICES

The working day is normally from 8am to 4.30pm in factories, 8.30am to 5pm for offices and the 40-hour week tends to be the norm. Americans tend to be sticklers for timekeeping, and you will be expected to arrive punctually and not slink off before the end of the working day. It is quite normal even for executives to clock in.

Employees are expected to pull their weight, and if you want to succeed in your job you must be prepared to work long hours; firms are quite ready to dismiss backsliders with no reasons given. There is no specific federal government regulation regarding termination of employment, but the normal practice is to give two weeks’ notice or severance pay. If you are laid off you may be able to collect unemployment insurance, but not for an open-ended period.

By contrast, equal opportunity legislation tends to work in the employee’s favour. The Equal Employment Opportunity Commission of the Federal Department of Labor prohibits discrimination on the basis of race, religion, colour, sex, national origin, handicap, age and virtually everything else.

Americans arc much more prone to taking employers to court than employees on this side of the Atlantic.

Many states have additional laws designed to counter discrimination in employment, sexual harassment and smoking in public places, and one needs to be aware of these. State laws can affect the way you apply for a job: in some states you should not enclose a photograph with your application. One clearly has to be circumspect in one’s relationships towards subordinates of the opposite sex, while chain smokers are in danger of being ostracised.

Working practices often reflect the values of the society in which they operate. In the United States individualism, enterprise and financial success are highly regarded. especially in the urban areas. While British people share many of these attitudes, people from other cultures may find the American way of work perplexing because their societies have a different system of values.

If you come into this category. Geert Hofstede’s Culture’s Consequences is required reading. The Institute for Training in Intercultural Management in the Hague offers courses in understanding and working with other nationalities, as does its UK affiliate. Howell & Associates. Other organisations involved in preparing people for working in the United States are: Farnham Castle International Briefing Centre and Culture Shock Consulting.

TAXATION

‘In this world nothing can be said to be certain, except death and taxes’, wrote Benjamin Franklin over 200 years ago. In the United States the tax system, like death, has the habit of catching up with you in the end, so you need to be aware of some of its features.

Federal Income Tax

If you take up employment in America, you are liable to be taxed unless you fall into one of the exempt categories, such as diplomats, students and exchange visitors.

Many Americans live in awe of the Internal Revenue Service (the US equivalent of the Inland Revenue) whose tentacles seem to be everywhere. Departing aliens, for instance, may not be permitted to leave the country unless they can produce a certificate of compliance (sometimes known as the sailing permit or departure permit) at the port of departure.

To obtain this certificate, if you have earnings in the United States you must first file Form 1040C to the IRS office in your district; if you have received no income from US sources you need to submit Form 2063. Mercifully, tourists, students and the staff of foreign governments and international organisations are exempt.

The ‘ins’ and ‘outs’ of US taxation are long and complex, and beyond the scope of this book. You can, though, get various guides free of charge from the Internal Revenue Service itself. The relevant ones are US Tax Guide for Aliens and Your Federal Income Tax (which is at least three times as long as this book!).

The first thing the IRS will want to establish is whether you are a non-resident alien or resident alien for tax purposes. Green card holders are automatically regarded as residents by the IRS, and people on non-immigrant visas who have been present in the United States for a substantial part of the year also fall into this category. The chart in Figure 9 will help you decide. Complications occur in the case of people who commute between the UK and America, and if you have been both a non-resident alien and a resident alien during the course of one tax year.

The US tax year coincides with the calendar year. If you are a non-resident alien in the eyes of the IRS, and engaged in a trade or business, you will need to apply for a taxpayer identification number at the local office of the Social Security Administration and file your income tax return on Form 1040NR. Resident aliens file Form 1040EZ, 1040A or 1040 and must apply for a taxpayer identification number too, as soon as they start earning income subject to US tax.

A US income tax form is a complex document, since there are several allowances you may be able to claim (including certain medical and dental expenses). Many Americans employ a certified public accountant (CPA) to complete their tax return for them – at a cost of a few hundred dollars – but if you work diligently through the tax guides mentioned above, you should be able to do it yourself.

For employees a system similar to Pay As You Earn operates in the United States, though it is not obligatory. You must let your employer know whether you arc a resident or non-resident alien and agree with him how much tax you expect to pay so that the correct amount of tax

can be withheld. If you are a resident alien you need to let him have a Certificate of Alien Claiming Residence in the United States (Form 1078).

When you come to fill in your tax form at the end of the tax year, you may find you are due for a refund or additional payment if there is a discrepancy between what has been withheld and what you should have paid on your tax form. Note that there are deadlines for the submission.

State and local taxes

Most of the states also levy taxes on individuals (though until now Texas has been an exception). This takes the form of income tax, and the rates can vary considerably from state to state. To find out what proportion of your income you have to pay, you should contact the tax department of the state in which you intend to live and work. (Addresses in Appendix G.) The table in Figure 12 will also give some indication.

You may also need to pay local taxes to the city or county in which you live, and these often take the form of a sales tax or a property tax. Residents of Metropolitan Atlanta, for instance, pay:

• federal tax
• state income tax
• property taxes (rates)
• a sales and use tax (currently four per cent).

Social Security

The federal government also deducts social security tax, which is similar to our National Insurance and goes towards your pension and Medicare. However, bear in mind that Medicare benefits are only available to certain groups. Because of reciprocal agreements between the United States and other countries, including the UK, as a non-resident alien you may well be able to pay UK National Insurance contributions instead. You may also have to contribute to a disability insurance scheme in certain states.