United States

06 März 2019

Working life in the United States

About

  • Autor: Carol Daugherty Rasnic, Jack Mullan
  • Institution: Regent University School of Law, Eurofound
  • Published on: Mittwoch, März 6, 2019

This profile describes the key characteristics of working life in the United States. It aims to complement other EurWORK research by providing the relevant background information on the structures, institutions and relevant regulations regarding working life. This includes indicators, data and regulatory systems on the following aspects: actors and institutions, collective and individual employment relations, health and well-being, pay, working time, skills and training, and equality and non-discrimination at work.

Key figures

Key figures

Comparative figures on working life in the US

 

2012

2017

Change in % and percentage points, 2012–2017

US
 

EU28

US

EU28

US

EU28

Real GDP per capita

USD 51,451

*(€31,080)

€25,700

USD

59,531 † (€47,718)

€27,600

15.7%

7.3%

Unemployment rate – total

8.1%

10.5%

4.4%

7.6%

3.7 pp

−2.9 pp

Unemployment rate – women

7.9%

10.6%

4.3%

7.9%

−3.6 pp

−2.7 pp

Unemployment rate – men

8.2%

10.4%

4.4%

7.4%

−3.8 pp

−3.0 pp

Unemployment rate – youth

16.2%

23.1%

9.2%

16.8%

−7.0 pp

−6.3 pp

Employment rate – total

64.4%

71.7%

66.0%

73.4%

1.6 pp

1.7 pp

Employment rate – women

53.1%

65.5%

54.6%

67.9%

1.5 pp

2.4 pp

Employment rate – men

64.4%

77.8%

66.0%

78.9%

1.6 pp

1.1 pp

Employment rate – youth

46.0%

42.4%

50.0%

41.7%

4.0 pp

−0.7 pp

Note: * Average exchange rate in 2012: (USD 1.00 = €0.78); † Average exchange rate in 2017: (USD 1.00 = €0.88 )

Sources: Eurostat – real GDP per capita (chain linked volumes [2010), in euro) and percentage change 2012–2017. World Bank – GDP per capita (constant international USD). US Bureau of Labor Statistics – unemployment rate by sex (percentage of active population) and age (youth 15–24 years) and annual average, percentage: employment rate by sex (percentage of active population) and age (youth 15–24 years) and annual average, percentage.

Background

Background

Introduction

In contrast to employment relations in the EU, employer–employee relationships in the US are much more deferential to the contractual rights of parties (i.e. individual employee and employer, or union and employer). Generally referred to as the ‘law of the shop’, there is less legislative and regulatory restriction in the US: the tendency is to permit the parties to establish their own contract.

Additionally, employment law is largely governed by state laws (although non-discrimination in the workplace, minimum wage, and unpaid leave rights for family and medical reasons are governed by federal statutes). A primary difference between the US and EU domestic law is the American employment-at-will rule, whereby an employer is free to terminate a US worker’s employment relationship without notice, for any reason, so long as doing so is not a violation of a protected class (for instance, on the grounds of pregnancy, race, religion, sex, age, etc.) (see Individual employment relations). Another similar law specific to the US is the right-to-work law meaning that employees are entitled to work in unionised workplaces without actually joining the union or paying regular union dues. Since 1947, federal government has permitted state legislatures to determine whether to adopt right-to-work legislation (see Trade unions).

Different statutes apply to the public and private sectors at both state and federal levels. One major difference between US and European public sector legislation is the right to strike. In the US, this is prohibited for federal workers, and only 11 states allow public workers to strike.

Statutory and regulatory bodies will be described in more detail in the relevant sections below.

Economic and labour market context

The US is still the wealthiest country in the world, and by most conventional measures, its economy shows few signs of slowing down. A new milestone was reached in May 2018 when the Bureau of Labor Statistics reported that the US economy had added 223,000 jobs for the month – the 92nd consecutive month of job creation. The unemployment rate is below 4%, and the employment-to-population ratio for prime-aged individuals (ages 25–54) has practically recovered to its pre-recession level of 80%. Interest rates have remained steady as the inflation rate meets Federal Reserve targets, and the stock market has continued to soar to historic highs.

There are nonetheless some persistent problems. Underwhelming reports regarding wage growth, for example, have mystified some economists who would have expected average hourly earnings to be growing at a faster rate than the 2.7% increase spanning March 2017 to March 2018. In fact, when not counting those who are in management or supervisory positions, average wage growth over the last three years has stagnated for the larger number of ‘non-supervisory’ or ‘production’ workers.

Another feature of the post-recession economic landscape has been the hollowing out of the public sector. As a result of sustained and severe budget cuts, the public sector saw a shortfall of nearly two million jobs between the 2007 crisis and the end of 2015. Despite picking up in recent years, job growth at state and local government levels remains among the lowest across all sectors of the economy.

Meanwhile, for all of the jobs being created in the private sector, there are questions to be asked about the quality and impact of these jobs. Specifically, many studies point to the growing proportion of workers in ‘alternative work arrangements’ – broadly defined as temporary agency workers, on-call workers, contract workers and independent contractors or freelancers. Estimates show that this class of workers grew from 10.7% of the workforce in 2005 to 15.8% in 2015, and many experts expect this growth to continue. At the same time, many of the sources of social protection offered through traditional full-time employment (health, retirement and life insurance) are less likely to be available to workers in alternative work arrangements.

Modest wage growth, a diminished public sector and the rise of the so-called gig economy are increasingly common trends for many OECD countries and can also be observed in Eurofound’s European Jobs Monitor across the EU28. The US economy could be seen as having anticipated this: it has thrived for decades on a system of industrial and labour relations that is far more liberalised and market-oriented than others – and which, by its nature, reflects and reproduces vast disparities in wealth and income.

Legal context

The primary union-management federal statute is the 1947 Labor Management Relations Act (commonly referred to as the Taft-Hartley Act), which amended the 1935 National Labor Relations Act (NLRA, commonly referred to as the Wagner Act for its legislative sponsor). Individual employment statutes are the

  • 1963 Equal Pay Act (i.e. equal pay between men and women performing substantially equal work for the same employer)
  • Title VII of the 1964 Civil Rights Act (with major amendments in 1972, 1978 and 1991)
  • 1967 Age Discrimination in Employment Act
  • 1990 Americans with Disabilities Act
  • 1993 Family and Medical Leave Act

Changes in 2017 were largely judicial or regulatory rather than legislative. Federal regulatory and state statutory changes will be covered in relevant sections below.

Two significant US Supreme Court decisions in mid-2018 affect employment agreements. The first, Epic Systems Corp. v. Lewis, 584 US (No. 16-285, May 21 2018), upheld enforcement of an employee’s agreement to arbitrate employee disputes, waiving the right to engage in a class action suit in an employment dispute. The federal Arbitration Act required enforcing such agreements, which were held not to conflict with concerted rights under Taft-Hartley. This was a reminder of the importance of the freedom of contract in employment law.

The second, Janus v. AFSCME, 573 US (No. 16-1466, June 27 2018) overruled a 1971 decision (Aboud v. Detroit Board of Education, 431 US 209). The Court held in Janus that compelling government workers to pay fees to a union as a condition of public employment (as was required by the federal government and 22 state governments) violated the First Amendment to the US Constitution.

Industrial relations context

In general, the already low level of union membership (compared with Europe) has decreased gradually. The number of right-to-work states has also increased.

Industrial relations (i.e. the relationship between trade unions and management) is largely consensual, being contract-based. Most collective bargaining agreements are executed at the local or regional, rather than national, levels. Because of lower union density, collective bargaining is relatively weak. It is significant that there are no statutory works councils in the US. Indeed, any such group of workers recognised by an employer for bargaining purposes under US law would be a union certified by the National Labor Relations Board (NLRB) subsequent to an election or voluntary recognition by the employer.

Recent focus has been on alterations to wage and working time regulation and legislation. Many changes made by the Obama administration in this regard have been reverted to their former status under the Trump administration. The increase which was to be enforced in December 2016 of the earnings requirement for exemption under the wage and hour laws (giving more workers the right to time and a half for work in excess of 40 hours per week) was temporarily enjoined by a Texas federal district court shortly before the effective date. This injunction became permanent in August 2017, and the Department of Justice did not appeal.

There have also been regulatory changes in what was seen to constitute a ‘joint employer’ for liability and responsibility purposes by the Obama administration, with reversion to former law under the Trump NLRB. Generally speaking, the Obama NLRB relaxed the test of what co- or sub-contractors might be ‘joint’ with the primary contractor, making the latter responsible for the former’s violations of labour laws. This test was again tightened, and the former stricter test resumed by ruling of the Trump NLRB.

Actors and institutions

Actors and institutions

Trade unions, employers’ organisations and public institutions play a key role in the governance of the employment relationship, working conditions and industrial relations structures. This section looks into the main actors and institutions and their role in the US.

Public authorities involved in regulating working life

The primary regulatory body for the union-management field is the NLRB. A statutory agency (1935 Wagner Act), it is composed of five members appointed by the President and confirmed by the Senate for staggered five-year terms. The prosecutorial side (under the General Counsel, a presidential appointee) files unfair labour practice charges against employers or unions. The judicatory side hears and decides unfair labour charges. Appeal is to the federal Circuit Court of Appeals for the geographic district. The office of the General Counsel also conducts and certifies results of union elections.

With regard to charges of discrimination on the basis of race, colour, religion, national origin, sex, age or disability, the enforcing agency is the Equal Employment Opportunity Commission (established by Title VII of the 1964 Civil Rights Act).

Regulatory agencies under the Department of Labor, including the Wage and Hour Division of the Department of Labor, enforce the Occupational Safety and Health Act and legislation regarding wages and working time (‘hours’ in US terminology).

State-level agencies enforce state unemployment and worker compensation laws. Some states also have minimum wage statutes that are enforced by statutory agencies.

Representativeness

Union-management contracts are collectively bargained through negotiations following NLRB certification of a union. Although there are some national collective bargaining agreements, the vast majority of these are won at the local level. National agreements include a clause distinguishing agreements with regard to union shop clauses in right-to-work and non-right-to-work states.

The certified union is similar to the European concept of a works council, since it is the entity with which the employer bargains with regard to wages, working time and terms and conditions of work.

Trade unions

About trade union representation

The NLRA, or Wagner Act, as amended by the 1947 Taft-Hartley Act, 29 United States Code (USC) secs 151–169, remains the primary federal legislation governing trade union–management workplace disputes and trade union membership in the US. Section 7 secures the right of employees to self-organise and encourages collective bargaining. The 1935 law also established the NLRB, authorised to hear and decide unfair labour practice charges and to conduct and certify the results of union elections. While most private sector employees are covered under the NLRA, railroads and airlines are covered by the 1926 Railway Labor Act, 45 USC secs 181 (and following). Some categories of workers are excluded from NLRA coverage (independent contractors, employees of air and railway carriers, agricultural and domestic workers and some computer analysts).

Union membership in the US has never quite reached European levels, and it has declined over the past four decades. Presumably, the increase in so-called ‘right-to-work laws’ are partly responsible for this trend. A provision of the 1947 Taft-Hartley Act permitted the states to enact right-to-work laws. These state statutes prohibit the enforcement of a collective bargaining clause that compels a worker to become a member of a union after 30 days of employment or 30 days after the effective date of the agreement (the 30-day minimum is in the federal statute), whichever takes place first. One effect of a right-to-work law is that workers in a unionised bargaining unit benefit from trade union representation without having to contribute dues to the union or to comply with other duties of union membership. As of 2017, 28 states had enacted right-to-work statutes, most recently Indiana and Michigan in 2012 and Wisconsin in 2015. Accordingly, union membership tends to be far below the national average in right-to-work states.

The case of the state of Missouri is instructive. In February 2017, the state legislature passed a right-to-work statute scheduled to take effect on 28 August. However, a sufficient number of opponents signed a petition to mandate a referendum to let voters decide whether Missouri would in fact become the 29th right-to-work state; the resulting vote in August 2018 rejected the right-to-work proposal by a two-to-one margin, considered as representing a huge victory for the organised labour movement.

Trade union membership and trade union density

Reportedly, in 1936, a year after adoption of the 1935 Wagner Act, 35% of the private sector workforce were union members. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1%; that figure declined to 10.7% in 2017. The rate of trade union membership has not changed significantly over the past five years, but in overall totals there was a marginal increase of 262,000 union members in 2017. Among the new union recruits, 75.6 % were workers under the age of 35 (Economic Policy Institute data 2018).

Union membership rates, 2012–2017 (%)

Year

2012

2013

2014

2015

2016

2017

Union membership rate

11.3

11.3

11.1

11.1

10.7

10.7

Source: Bureau of Labour Statistics (BLS) data

Trade union membership also varies greatly depending on sector, occupation and geography. In 2017 more than one-third (34.4%) of public sector workers were union members, whereas this applied to just 6.5% of private sector workers. At the occupational level, public sector jobs like those in education and training or in law enforcement are most likely to be unionised. In contrast, for workers in farming, fishing and forestry and those in food preparation and service, respective union membership rates were just 3.4% and 3.8%. In terms of state differences, the proportion of unionised workers can be as high as 23.8% (in New York) or as low as 2.6% (in South Carolina).

Main trade union confederations and federations

In the US, several national trade federations have been organised to confederate various industrial and trade unions. The main national trade federations are the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and the Change to Win Federation (the latter formed in 2005).

The AFL-CIO is the nation’s largest federation of industrial and trade unions, representing 11 million workers. Federated unions cross industries and trades. The Change to Win Federation is a coalition of national industrial and trade unions, representing 4.5 million workers. The coalition includes four unions: the International Brotherhood of Teamsters, the Service Employees International Union, United Food and Commercial Workers, and the United Farm Workers (UFW). Notably, UFW members are exempt from Taft-Hartley Act coverage.

The largest unions (i.e. those with membership in excess of 100,000) in descending order of union membership are as follows:

1. National Education Association of the United States (membership in excess of 2,731,000)

2. Service Employees International Union

3. American Federation of State, County, and Municipal Employees

4. United Food and Commercial Workers

5. American Federation of Teachers

6. United Steelworkers

7. International Brotherhood of Electrical Workers

8. Laborers International Union of North America

9. International Association of Machinists and Aerospace Union

10. UNITE HERE (formerly UNITE)

11. International Longshoreman and Warehousers Union

12. United Auto Workers

13. Communication Workers of America

14. United Brotherhood of Carpenters and Joiners Association

15. International Union of Operating Engineers

16. United Association of Journeymen et al.

17. National Association of Letter Carriers

18. American Postal Workers Union (other than letter carriers)

19. International Association of National Postal Mail Handlers Union

20. American Federation of Government Employees

21. Amalgamated Transit Union

22. American Nurses Association

23. Sheet Metal Workers International Association

24. International Union of Painters and Allied Trades

25. International Association of Bridge and Structural Workers et al.

26. Transport Workers Union of America

27. International Alliance of Theatrical Stage Employees

28. American Association of Classified School Employees

29. National Rural Letter Carriers

The largest confederation of unions is the American Federation of Labor-Congress of Industrial Organizations (a 1955 merger of federations of unions organised along trade lines with those organised according to craft or skill). The other major federation is Change to Win (now a conglomerate of four unions).

Sectors with high union membership rates are utilities, transportation and warehousing, telecommunications, and construction. Sectors with low union membership are finance, food services and drinking places, and professional and technical services.

Workplace-level employee representation

Unlike in many EU Member States, there are no national or state laws in the US authorising alternative workplace representation, such as work councils. While not commonplace in most US companies, a few non-unionised companies engage in informal bilateral discussions. These arrangements are entirely voluntary and are mostly informal. The usual procedure is for a union to be certified by the NLRB as the official bargaining representative for a unit, after which the employer must bargain with the union in an effort to reach a collective bargaining agreement.

Employers’ organisations

About employers’ representation

Joining an employer federation is largely voluntary. A major exception is the area of major league sports. A new franchise in Major League Baseball, the National Football League, the National Basketball Association or the National Hockey League would be required to become a member of those respective employer groups and be party to the same collective bargaining agreements as other team managements.

Employers’ organisations – membership and density

The largest employer organisation in the US is the United States Chamber of Commerce, an organisation dedicated to representing employer interests by engaging in lobbying campaigns. In certain heavily unionised sectors (e.g. healthcare), employers can and do create multi-employer bargaining organisations to collectively negotiate the terms of collective bargaining agreements with employee-elected unions.

Main employers’ organisations and confederations

In the US, the density of companies involved in employer organisations is quite low at just 1.6%.

However, an emerging trend is for companies to increasingly voluntarily participate in employer organisations to more effectively navigate a growing web of federal and state laws concerning workers’ roles in managing employee relations. On behalf of the companies they represent, a number of employer organisations have also focused on union avoidance measures including anti-union litigation, lobbying and publicity campaigns, though traditionally they do not have bargaining power. The National Association of Professional Employers’ Organizations is the largest trade association, representing 85% of the nation’s employer organisations. Nationally, companies can voluntarily associate with over 470 different trade-specific employer organisations.

Collective bargaining

Collective bargaining

The central concern of employment relations is the collective governance of work and employment. This section looks into collective bargaining in United States.

Bargaining system

In the US, collective bargaining agreements are most often negotiated at local or regional levels. At times, there will be a general national-level agreement containing basic and general terms, with details agreed upon by local units.

For example, the Teamsters Union negotiates a national master agreement that serves as a template to be used by affiliated regional and local unions who negotiate their own agreements, often with some local variations. This is particularly so for right-to-work states, for which the major agreement will include a union shop clause specifying inapplicability in those states. The vast majority of collective bargaining agreements are decentralised and occur at the regional or company level.

Wage bargaining coverage

Rate of collective bargaining, 2012–2017 (%)

 

2012

2013

2014

2015

2016

2017

Collective bargaining rate

12.5

12.4

12.3

12.3

12.0

11.9

Source: BLS data

Peace clauses

In the US, such clauses are called no-strike and/or no-lockout provisions. They are generally regarded as pro-management, since they would preclude a work stoppage and cessation of production. As they are reached by agreement, such agreements might extend into the negotiation time for an expired collective bargaining agreement. As is the case with other clauses in such agreements, they are judicially enforceable through equitable relief under Taft-Hartley (see more below).

Other aspects of working life addressed in collective agreements

Non-discrimination (for instance, on grounds of race, colour, sex, religion, national origin, age and/or disability) is often included in collective bargaining agreements. This would generally make arbitration, rather than court proceedings, the means of settling disputes.

Significantly, wages, hours and other terms and conditions of work are the three mandatory areas of bargaining (sec 8(d) Taft-Hartley). All other areas are ‘permissive’ but not mandatory.

Industrial action developments, 2012–2017

Industrial action developments, 2012–2017

Industrial action is becoming exceedingly rare; 2017 saw near record lows in mass work stoppages across the US. In 2017, the Bureau of Labor Statistics reported just seven major work stoppages involving 1,000 or more workers and lasting at least one shift (BLS 2018). This is the second-lowest annual number since 1947.

Trends in industrial action, 2012–2017

 

 

Number of work stoppages involving 1,000 or more workers, lasting at least one shift

Number of workers involved

Days idle

2017

7

25,000

440 million

2016

15

99,000

1.54 million

2015

12

47,000

740,000

2014

11

34,000

200,000

2013

15

55,000

290,000

2012

19

148,000

1.13 million

In the early months of 2018, industrial activity resurfaced in the form of teachers’ strikes. Beginning in West Virginia and spreading to Oklahoma, Arizona and potentially elsewhere, unionised teachers in public education organised statewide strikes to demand higher wages and greater investment in public schools. In addition to garnering media attention, the strikes succeeded in pressuring state lawmakers to increase teachers’ pay, which had stagnated for years due to state budget cuts.

Dispute resolution mechanisms

Collective dispute resolution mechanisms

Management generally look for an arbitration clause that covers labour disputes regarding issues addressed in the collective bargaining agreement. This pre-empts the more costly and more time-consuming process of litigation. The agreement itself determines how the arbitrators are selected and who is responsible for their compensation (often this is split between the parties or paid by the non-losing party). The agreement also establishes the procedure. For example, an informal complaint process might precede the actual filing of a grievance.

Individual dispute resolution mechanisms

Similar to collective disputes, procedures for individual disputes are also agreed upon in the general collective bargaining contract.

Unlike many EU Member States, the US has no specialised labour courts. There are administrative agencies charged with enforcing specified laws (e.g. the NLRB and the Equal Employment Opportunity Commission), with appeal or referral to a federal court of general jurisdiction (one of the circuit courts of appeal for unfair labour practice charges and a federal district court for individual discrimination charges).

An arbitration award will not be changed by a court unless the arbitrator exceeds its contractual bounds or violates established law.

Individual employment relations

Individual employment relations

Start and termination of the employment relationship

Dismissal and termination procedures

The ‘employment-at-will’ rule

Most states adhere to the common law employment-at-will rule. There are usually exceptions, and some states have fewer than others. For example, most states regard as unlawful, and a violation of public policy, a termination of an employee who has exercised their statutory or constitutional rights. (See, e.g., Frampton v. Central Indiana Gas Co, Indiana, 1973; Bowman v. State Bank of Keysville, Virginia, 1985; Perry v. Sindermann, Texas, 1972). Some states permit the court to decide what constitutes a violation of public policy, regardless of whether a statute exists. (An example is Wagenseller v. Scottsdale Memorial Hospital, Arizona, 1985.)

This rule, first articulated in an 1877 treatise by New York lawyer H.G. Wood, was gradually adopted by state courts. It gives either party the right to terminate the employment relationship, with or without cause.

Only the state of Montana has enacted the Model Employment Termination Act. This statute gives assurances to a worker who has worked for at least one year with the employer that their employment will be terminated only for good reason. In the event of wrongful termination, however, the compensation is quite modest (reinstatement or 36 months usual rate of pay).

An example of a strict employment-at-will rule is found in Virginia. For example, in 2016, the Supreme Court of Virginia held that that ‘reasonable notice’ of termination means effective notice, even if it is immediate (Johnston v. William Wood and Associates).

Notice in event of plant closure or mass layoff

A company might decide to close its business, whether or not for economic reasons. (It cannot do so for proven anti-union sentiment. See Textile Union Workers v. Darlington, US Supreme Court, 1965.) The only commitment to workers might be that of timely notification.

For companies with at least 100 full-time workers or the equivalent, a 1988 federal statute, the Workers Adjustment, Retraining, and Notification Act applies. Sixty days’ written notice must be given to affected workers in the event of a plant closure or a mass layoff (defined as dismissal of one-third of the workforce or 500 workers, whichever is less). There are exceptions, as in the following cases:

  • the unfulfilled anticipation of capital that would have allowed the continuing of operations
  • a closure or covered layoff for which the cause was not ‘reasonably foreseeable’
  • a closure caused by a natural disaster

Unemployment compensation

Unemployment compensation laws are state statutes. The general scheme provides for compensation equivalent to a weekly payment of approximately one-half the claimant’s prior weekly wage/salary, for a period of a maximum of six months (this period might be less, depending upon the length of the unemployed claimant’s work record); it is subject to a relatively low maximum (both amount and maximum varies by state). Funding is by taxation upon all employers, the rate depending upon the number of successful compensation claims (paid by each state-administered fund) against them during a specified period (usually two or three years). Significantly, only those workers whose unemployment is not due to their own fault (i.e. those who have voluntarily resigned without good cause and/or who have been discharged because of misconduct connected with work) are qualified for receipt of payment.

Entitlements and obligations

Parental, maternity and paternity leave

The US is the only OECD country without a federal statutory paid maternity leave policy. The 1993 Family Medical Leave Act (FMLA), 29 USC (secs 2601 and following), gives eligible workers the right to up to 12 weeks of unpaid leave per year for three reasons:

  • the birth or adoption of a child
  • the employee’s own serious illness that prevents them from working
  • the serious illness of the child, parent or spouse of the employee that requires them to care for the family member

The FMLA applies to firms with 50 or more employees, whether full- or part-time, who work within a 75-mile radius. Workers who have worked a total of at least one year for the employer and who have worked at least 1,250 hours during the prior 12 months (i.e. an average of 24 hours per week) are eligible for FMLA rights. The 12-week leave right is cumulative: that is, a covered employee has the right to a total of 12 weeks for all three reasons. For example, a female employee might take four weeks’ leave for the birth of a child. During the 12-month period, she still has a remaining eight weeks’ leave in the case of her own or a close family member’s serious illness.

The FMLA is gender-neutral. A father has the same right to leave (provided he has the requisite work eligibility) for birth or adoption of a child as the mother. If the father and mother are both covered, each has the right to a total of 12 weeks. However, for birth or adoption purposes, if they work for the same employer, the total available parental leave is 12 weeks.

Some companies provide leave in excess of the provisions of the FMLA or with compensation. In such cases, the company might require the employee to take company-provided leave before using their FMLA leave.

As a result, only one in seven (14%) workers in the US has access to paid family leave as an employee benefit (Isaacs et al, 2017). Recent findings from the National Study of Employers indicate that among medium-to-large firms (with 50 or more employees), the average maximum amount of maternity leave offered by US companies was 14.5 weeks in 2016. This compares with roughly 11 weeks of paternity leave. The proportion of employers offering replacement pay (i.e. full salary compensation for the entire leave) has actually declined in the last decade, down to just 6% of companies with 50+ employees in 2016.

At the same time, there are fairly robust family leave plans in five states plus the District of Columbia. In 2018, New York became the latest to join this group, with perhaps the most thorough family leave plan to date: applying to all employees who have worked at least 26 weeks at a company of any size, it will gradually (by 2021) offer up to 12 weeks of leave and cover 67% of wages for those on leave.

Statutory leave arrangements

Leave policy/benefit, 2012 and 2016

Leave policy/benefit (paid or unpaid)

2012

2016

Maximum job-guaranteed leave for women following the birth of a child

   
 

Fewer than 12 weeks

10%

7%

 

12 weeks

61%

60%

 

More than 12 weeks

30%

33%

Average maximum job-guaranteed leave for women following the birth of a child

14.2 weeks

14.5 weeks

Maximum job-guaranteed leave for spouse/partners of women who give birth following the birth of their child

   
 

Fewer than 12 weeks

25%

23%

 

12 weeks

60%

58%

 

More than 12 weeks

15%

18%

Average maximum job-guaranteed leave for spouses/partners of women following the birth of their child

10.6 weeks

11.2 weeks

Maximum job-guaranteed leave for employees following the adoption of a child

   
 

Fewer than 12 weeks

15%

14%

 

12 weeks

65%

64%

 

More than 12 weeks

19%

21%

Average maximum job-guaranteed leave following the adoption of a child

11.9 weeks

12.2 weeks

Source: National Survey of Employers 

Note: All changes between 2012 and 2016 are found to be not statistically significant.

Practice, policy or benefit, 2012 and 2016

 

2012

2016

Do female employees who give birth receive any pay from any source during the period of their disability?

   

Yes

58%

58%

No

42%

42%

Do employees who receive (at least some) pay during the period of maternity-related disability receive full or part pay?

   

Full pay

9%

10%

Part pay

63%

70%

Depends on situation

28%

20%

Is disability pay provided as part of a temporary disability insurance benefit?

   

Yes

78%

78%

No

22%

22%

Do spouses/partners of women who give birth receive any paid time off following the birth of their child?

   

Yes

14%

15%

No

86%

85%

Source: National Study of Employers (2016)

Sick leave

As with family leave, there are no federal laws requiring employers to provide paid sick leave for their workers – but there are state-level policies offering such protection. Nine states and the District of Columbia currently implement paid sick leave policies, most of which have materialised in the past decade.

Retirement age

The national retirement age is officially 67 years for individuals born after 1960. An eligible retiree can begin to draw benefits from the social security system at age 62, but only at 32.5% of the full monthly retirement payments that would begin at age 67. The average actual retirement age has stabilised over the past decade and stands at 64 years for men and 62 for women.

Pay

Pay

Nearly a decade after the collapse of financial markets in 2008 and the ensuing Great Recession, American households have seen steady gains in income in recent years. From its descent to USD 53,331 in 2012, median annual household income rebounded to exceed pre-recession levels and was recorded at USD 59,039 in 2016 according to US Census data (€51,520 as at 4 February 2018). Nevertheless, much of this growth is skewed towards the higher end of the earnings spectrum, and there remains more than 20% of households with annual income below USD 25,000 (€21,816).

Average weekly wage, by sector

 

Average weekly wage

 

Q1 2013

Q1 2017

Change Q1 2013 to Q1 2017

Goods-producing

USD 1,153 (€903)

USD 1,270 (€1,172)

­10.1%

Natural resources and mining

USD 1,190 (€932)

USD 1,221 (€1,127)

2.6%

Construction

USD 978 (€766)

USD 1,129 (€1,042)

15.4%

Manufacturing

USD 1,227 (€961)

USD 1,352 (€1,248)

10.2%

Service-providing

USD 961 (€752)

USD 1,090 (€1,006)

13.4%

Trade, transportation and utilities

USD 818 (€640)

USD 915 (€845)

11.9%

Information

USD 1,776 (€1,391)

USD 2,220 (€2,049)

25.0%

Financial activities

USD 1,924 (€1,506)

USD 2,279 (€2,104)

18.5%

Professional and business services

USD 1,287 (€1,008)

USD 1,471 (€1,358)

14.3%

Education and health services

USD 836 (€655)

USD 919 (€848)

9.9%

Leisure and hospitality

USD 382 (€299)

USD 432 (€399)

13.1%

Other services

USD 620 (€485)

USD 710 (€655)

14.5%

Note: Exchange rate in Q1 2013: (USD 1.00 = €0.78); Exchange rate in Q1 2017: (USD 1.00 = €0.92).

Minimum wages

The US has had a federal minimum wage statute since 1938 with the Fair Labor Standards Act, 29 USC (secs 2601 and following). The hourly rate was then set at 25 cents, and it has been increased several times. Since 24 July 2009, the hourly minimum wage has been USD 7.25. This law also regulates child labour and establishes a maximum number of weekly work hours at 40, beyond which workers are entitled to one and a half times their usual rate of pay.

Exemptions from the statutory category of ‘employees’ are professionals, executives, administrative workers, outside sales personnel, and specific computer analysts. (Other exemptions are seasonal workers, agricultural workers and home domestic workers.) Since most of those in the first five categories earn considerably more than the minimum wage, the effect of these exemptions is to reduce the number of those entitled to overtime pay for work in excess of 40 hours/week.

On 18 May 2016, the Obama administration Department of Labor announced a dramatic change in minimum salaries that would qualify an employee as exempt for overtime pay purposes. This change would have doubled the annual earnings amount for non-highly compensated employees (earning more than USD 100,000) from USD 23,660 to USD 47,476 before they became exempt (and not entitled to overtime pay for hours exceeding 40 per week). This regulatory change was to have become effective on 1 December 2016, but a federal district court held it invalid as exceeding executive powers and encroaching upon the powers of Congress. This injunction became permanent in August 2017, and the Trump administration Department of Labor did not appeal it.

For workers who characteristically receive tips (e.g. waiters, hotel baggage persons, cab drivers for a company), the employer might deduct from their wages up to USD 5.12 per hour (i.e. for those receiving minimum wage, a payment of USD 2.13 per hour), provided that their remuneration (tips and paid wage) totals at least the current federal minimum wage.

Minimum wages, 2015–2017

 

 

2015

2016

2017

Sociodemographic characteristic

Percentage of workers paid hourly rates

Total

At minimum wage

Below minimum wage

Total

At minimum wage

Below minimum wage

Total

At minimum wage

Below minimum wage

Age and sex

Total, 16 years and over

3.3

1.1

2.2

2.7

0.9

1.8

2.3

0.7

1.6

16 to 24 years

7.4

3.1

4.4

6.2

2.4

3.7

5.6

2.0

3.6

25 years and over

2.2

0.6

1.6

1.8

0.5

1.3

1.4

0.3

1.1

Men

2.5

0.9

1.6

1.9

0.7

1.3

1.7

0.6

1.1

Women

4.1

1.4

2.7

3.4

1.1

2.3

2.8

0.8

2.0

Race and ethnicity

White

3.1

0.9

2.2

2.6

0.8

1.8

2.2

0.6

1.7

Black or African American

4.3

2.2

2.1

3.3

1.7

1.7

2.5

1.2

1.3

Asian

3.0

0.9

2.1

2.4

0.5

1.9

1.7

0.4

1.4

Hispanic or Latino

2.9

1.0

1.9

2.3

0.6

1.6

1.8

0.6

1.2

Full and part-time status

Full-time workers

1.9

0.5

1.4

1.5

0.3

1.2

1.1

0.2

0.8

Part-time workers

7.3

2.9

4.4

6.2

2.5

3.6

5.9

2.0

3.8

Source: US Bureau of Labor Statistics

Working time

Working time

Working time regulation

The Wage and Hour Division of the Department of Labor makes an initial determination on contested claims with regard to on-call time (generally determined according to the degree of freedom for the employee to engage in non-work-related activities); work away from the usual workplace (generally determined by whether the employer was informed); and breaktimes or rest periods (the general rule is that breaks less than 30 minutes in duration are considered time worked). These decisions can be appealed in a federal court.

Working time is established by a collective bargaining agreement or in individual employment contracts.

Overtime regulation

The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Unless exempt, employees covered by the act must receive overtime pay for hours worked over 40 in a working week, at a rate not less than time and a half. There is no limit in the act on the number of hours employees aged 16 and older may work in any working week. The act does not require overtime pay for work on Saturdays, Sundays, holidays or regular days of rest unless overtime is worked on such days.

Particular jobs may be completely excluded from coverage under the FLSA overtime rules. There are two general types of complete exclusion. Some jobs are specifically excluded in the statute itself. For example, employees of cinemas and many agricultural workers are not governed by the FLSA overtime rules. Another type of exclusion is for jobs that are governed by some other specific federal labour law. Generally, if a job is governed by some other federal labour law, the FLSA does not apply. For example, most railroad workers are governed by the Railway Labor Act, and many truck drivers are governed by the Motor Carriers Act, and not the FLSA. Many of the FLSA exclusions are found in paragraph 213 of the FLSA.

Part-time work

Federal statutes often specify a minimum number of workers in order for the law to apply to an employer. This may be specified as including (or not) part-time workers, the latter often defined in the statute. An example is the Workers Adjustments and Retaining Notification Act, which covers employers with at least 100 full-time workers (those who work a minimum of 40 hours/week) or the equivalent. Thus, a company with 200 employees, each working 20 hours/week, would be covered by this statute.

Involuntary part-time

The Bureau of Labor Statistics tracks the number of people who are working part-time ‘for economic reasons’, or what is referred to as involuntary part-time work. The Great Recession resulted in an increase in involuntary part-time work – by 2011, nearly one in three part-time workers were involuntarily employed. Since then, this proportion has declined and nearly returned to pre-recession levels, with involuntary part-time workers making up roughly 20% of all part-timers.

Trends in part-time work by gender and age, 2012–2017 (%)

 

2012

2013

2014

2015

2016

2017

Involuntary part-time

30.1

29.6

27.0

24.2

22.3

20.1%

Voluntary part-time, by gender

Men

8.6

8.5

8.6

8.8

9.1

N/A*

Women

19.5

19.4

19.7

19.8

19.9

N/A*

Voluntary part-time, by age

16–17 years

80.8

79.9

81.7

81.3

81.1

N/A*

18–19 years

53.6

52.4

52.9

53.3

53.6

N/A*

20–24 years

26.5

25.7

25.7

26.1

26.0

N/A*

25–54 years

8.3

8.4

8.5

8.6

8.6

N/A*

55–64 years

12.0

11.7

11.9

12.0

12.2

N/A*

65 years and older

35.7

35.3

34.6

33.2

34.6

N/A*

*Figures not yet available.

Women are more than twice as likely as men to be working part-time voluntarily; by age, younger workers are most likely to choose part-time employment. This is less common during prime working age but increases again after retirement age, with one in three workers over 65 working part-time voluntarily. These disparities have largely remained constant over the past decade, although one notable trend in recent years has been a marginal growth in voluntary part-time work among men, creeping towards 10%.

Night work

Extra pay for working night shifts is a matter of agreement between the employer and the employee (or the employee’s representative). The Fair Labor Standards Act (FLSA) does not require extra pay for night work. However, the FLSA does require that covered, non-exempt workers be paid not less than time and a half for time worked over 40 hours in a working week.

According to findings from the 2015 American Working Conditions Survey (AWCS), approximately 30% of all workers in the US report performing night work; this is more prevalent among men, the self-employed and plant and machine operators.

Shift work

The 2015 AWCS finds that roughly a third of American employees work shifts. Shift work is most likely for women without a college degree (45%) and people working in services and sales occupations. A separate question is included in the survey which subdivides shift work by: daily split shifts (with a break of at least four hours in between); permanent shifts (day shift, swing shift, graveyard shift); and alternating/rotating shifts. Most common among these three types is permanent shifts, applying to 63% of shift workers.

Working time flexibility

It is the employer’s choice whether or not to provide flexibility with regard to hours worked. This might be addressed in a collective bargaining agreement or in an individual employment contract.

Regular vs. erratic working schedules

While the US workforce is likely to have predictable and stable jobs throughout the year, working time can be more erratic on a micro scale. AWCS data reveals that just 54% of US workers report working the same number of hours on a day-to-day basis. Frequent and unpredictable changes to workers’ schedules are most likely to affect younger employees and workers without a college degree.

Health and well-being

Health and well-being

Health and safety at work

Workplace health and safety is regulated by the 1970 Occupational Health and Safety Act, 29 USC (secs 651 and following). (Workplace safety requirements in the mining industry are in a separate statute, the 1977 Mine Safety and Health Act, 30 USC, secs 801 and following.) This act identifies a multitude of physical risks found in workplaces according to industry and details employer responsibilities for risk mitigation, with the basic aim being to prevent industrial accidents and/or occupational diseases. The act provides for unannounced workplace inspections by the Occupational Safety and Health Administration. Although unannounced, the inspector must obtain a warrant prior to mandatory inspection. (Marshall v. Barlow’s, 436 U.S. 307 (1978)). An inspection might result in a citation for non-compliance with a regulatory standard and the issuance of a civil penalty and, in extreme cases, suspension of operations until compliance is achieved. There is a statutory procedure for enforcement.

In addition to the federal preventive law, each state has a workers’ compensation statute that provides for compensation for injuries or deaths sustained from workplace accidents and/or occupational diseases. While payments vary among states, the general rule is that length of payments is generally restricted in terms of time, to approximately 10 years’ duration. The amount paid is specified in each state statute, and each has a weekly minimum and maximum.

The source of funding also varies by state, but the most frequent source of funding is insurance purchased by the employer (usually subject to approval by the state administrative body). Some states provide for groups of companies to self-insure by sharing payments of claims.

Accidents at work, 2012–2016

 

2012

2013

2014

2015

2016

Percent change on previous year

2.9%

2.9%

3.0%

6.3%

3.3%

Working days lost per 1,000 employees

34

33

32

30

29

Note: Only accidents resulting in four days’ absence or more are counted.

Source: BLS data

With regard to health insurance, the US system is also distinct from that of most EU Member States. The Patient Protection and Affordable Care Act (aka Obamacare), Pub. L. No. 111–148, 124 Stat. 119, was enacted by Congress in March 2010. One section requires ‘large employers’ (defined as those with 50 or more full-time employees, full-time referring to those who work at least 30 hours per week) must provide health insurance for workers. Penalties for non-compliance are gauged on a sliding scale according to the size of the business.

Psychosocial risks

Work intensity

Compared with EU28 averages, findings from the 2015 AWCS suggest that work intensity is particularly challenging for American workers. Only 8.5% of the US workforce reports having enough time to get the job done at work; meanwhile, two-thirds of the workforce reports having to work at high speeds and tight deadlines at least half the time on the job.

Skills, learning and employability

Skills, learning and employability

‘Non-compete’ clauses

Often an employment contract might include a non-compete clause. This is an agreement by the employee that if they leave the job, they will not engage in competition with the employer. Such agreements are designed to protect the employer from investing time and money training an employee, only to have that person then leave and engage in direct competition against the employer. Generally, such contracts are strictly interpreted in favour of the employee and must meet a three-part test of reasonableness in order to be upheld:

  • reasonable for the employee: the contract does not impose an unreasonable restraint on their ability to work in their chosen field
  • reasonable for the employer: the contract must go no further than necessary to protect an area in which the employer has an interest
  • reasonable for the general public: the contract should not make services inaccessible in an area.

Courts try to prevent the contract from restraining employees’ freedom in terms of geography, time, and scope of activities. For instance, a company that engages in business only within the state of Florida might want to prevent a departing employee from engaging in a similar business in Georgia and Alabama; this would be regarded as unfeasible. In terms of time, the longer the duration specified in the contract preventing the worker from engaging in similar activities after they have left the company, the less likely the agreement is to be enforceable. As regards scope of activities, an employee with a degree in electrical engineering who worked for a company as a computer analyst cannot be prohibited from leaving that company and working for its competitor as an engineer.

In recent years, some states have adopted laws limiting the enforceability of non-compete clauses.

  • Connecticut prohibits physician non-compete clauses beyond 165 miles (266 kilometres) from the employer’s business or for longer than one year (effective 1 July 2016).
  • New Mexico prohibits non-compete clauses for all medical professionals (recently extended to include nurse practitioners and midwives).
  • Oregon prohibits non-compete clauses and/or non-solicit agreements for home care workers.
  • Rhode Island prohibits all physician non-compete clauses.
  • Idaho requires an employer to show irreparable harm before being awarded damages for breach of a non-compete clause.
  • Illinois prohibits non-compete clauses for those earning less than USD 13 per hour (effective 1 January 2017).
  • Nevada requires employers to offer ‘valuable consideration’ (not defined in the statute) for non-compete clauses and prohibits courts from blue-pencilling (‘blue-penciling’ is a court’s severing of a contract so as to enforce some provisions while holding others non-enforceable).
  • Utah permits non-compete clauses in the broadcasting industry if they apply for fewer than four years and to employees earning USD 47,500 or less per year.
  • An Alabama law adds an employee defence of undue hardship, permits courts to blue-pencil contract terms and specifies items on which a business might rely in showing a protectable business interest (effective on 1 January 2016).

A federal bill introduced in 2015, the Mobility and Opportunity for Vulnerable Employees Act (MOVE), would have prohibited low wage earner non-compete clauses, but this was never enacted into law.

Non-solicitation agreements

A variation of the non-compete clause is the agreement not to solicit actual customers of the employer if the employee leaves that employment. In order to be enforceable, such agreements must have no time or geographical area limitations.

Federal legislation: The Defend Trade Secrets Act

The Defend Trade Secrets Act, effective on 11 May 2016, provides remedies for a company to enforce protection against an employee’s misappropriation of its trade secrets. Exemplary damages (double proven damages) are available, provided the employer has given employees notice of immunity for informing the employer of such misappropriation by a colleague.

National system for ensuring skills and employability

Programmes offering direct training schemes and employability workshops are generally not provided at the national level in the US. Alternatively, the federal government does provide money for regional and state-level programmes in this respect. Notably, one of these entities – the Appalachian Regional Commission, an agency which has educated and retrained nearly 50,000 students and workers in the area – was recently targeted for a USD 340 million funding cut in the latest budget proposal from the Trump administration.

Training

The 2015 AWCS shows that three out of four American employees reported receiving some form of training to improve their skills over the past year. A slight majority of workers reported having access to training through their own initiative (55.8%) and on-the-job training (54.1%), while a smaller proportion received training that was paid for or provided by their employer (43.4%).

Work organisation

Work organisation

Freedom to choose or change methods of work

In spite of many of the challenging conditions that American have to contend with workers in their jobs, many report a comfortable degree of latitude over how they carry out their work. Nearly three in four workers report having the ability to choose or change their methods of work. This is slightly more prevalent among women than men and is positively correlated with age – older workers have greater latitude.

Equality and non-discrimination at work

Equality and non-discrimination at work

Under US law, employers may not discriminate against workers in the terms, conditions and privileges of employment based on race, colour, religion, sex, national origin, age or disability. State laws also provide protections for other classes of workers; in some states sexual orientation and gender identity is included.

Related to this, since 2017, some 10 states have enacted laws prohibiting a prospective employer from asking a job applicant about his salary history. (These states are California, Connecticut (effective 1 January 2019), Delaware (1 January 2019), Massachusetts, Michigan, New Jersey, New York, Oregon, Vermont and Wisconsin.) This would preclude the company’s basing the pay of a new employee on what might have been a low rate of pay in their prior job.

Equal pay and gender pay gap

Median weekly earnings of full-time wage and salary workers by sociodemographic characteristics

Characteristic

Number of workers

Median weekly earnings

Sex and age

2016

2017

2016

2017

Total, 16 years and over

111,091

113,272

USD 832 (€727)

USD 860 (€752)

Men, all ages

61,930

62,980

USD 915 (€800)

USD 941 (€822)

  • 16 to 24 years

5,646

5,791

USD 512 (€447)

USD 547 (€478)

  • 25 years and over

56,284

57,190

USD 969 (€847)

USD 996 (€870)

Women, all ages

49,161

50,291

USD 749 (€655)

USD 770 (€673)

  • 16 to 24 years

4,430

4,490

USD 486 (€425)

USD 499 (€436)

  • 25 years and over

44,731

45,801

USD 784 (€685)

USD 810 (€708)

Race and ethnicity

2016

2017

2016

2017

White

86,474

87,730

USD 862 (€753)

USD 890 (€778)

  • Men

49,310

50,003

USD 942 (€823)

USD 971 (€849)

  • Women

37,163

37,727

USD 766 (€669)

USD 795 (€695)

Black or African American

13,963

14,521

USD 678 (€592)

USD 682 (€596)

  • Men

6,728

6,928

USD 718 (€627)

USD 710 (€620)

  • Women

7,235

7,593

USD 641 (€560)

USD 657 (€574)

Asian

7,030

7,320

USD 1,021 (€892)

USD 1,043 (€911)

  • Men

3,888

4,014

USD 1,151 (€1,006)

USD 1,207 (€1,055)

  • Women

3,142

3,306

USD 902 (€788)

USD 903 (€789)

Hispanic or Latino

18,950

19,615

USD 624 (€545)

USD 655 (€572)

  • Men

11,666

11,896

USD 663 (€579)

USD 690 (€603)

  • Women

7,284

7,719

USD 586 (€512)

USD 603 (€527)

Note: all currency conversions in the table were performed on 5 February 2019.

Quota regulations

Civil rights legislation in the 1960s established affirmative action policies. The United States Department of Labor describes affirmative action as the following:

For federal contractors and subcontractors, affirmative action must be taken by covered employers to recruit and advance qualified minorities, women, persons with disabilities, and covered veterans. Affirmative actions include training programs, outreach efforts, and other positive steps. These procedures should be incorporated into the company’s written personnel policies. Employers with written affirmative action programs must implement them, keep them on file and update them annually.

While this directive does not mandate specific quotas for employers to follow, some states have pursued legal measures to establish quotas along gender lines for public companies operating within their borders. In 2018, California put into effect such a policy which will phase in a requirement that public companies with six or more directors include at least three women on their executive board by the end of 2021.

Bibliography

Bibliography

Donovan, S., Bradley, D. and Shimabukuro, J. (2016), What does the gig economy mean for workers?, Congressional Research Service, Washington, D. C.

Dunn, M. (2018), ‘Who chooses part-time work and why?’, United States Bureau of Labor Statistics Monthly Labor Review, March 2018.

Dunn, M. and Walker, J. (2016), ‘Union membership In the United States’, United States Bureau of Labor Statistics Spotlight on Statistics, September 2016.

Gurchiek, K. (2017), Study: Little change to maternity, paternity leave at U.S. employers since 2012, Society for Human Resource Management, Alexandria, US.

Isaacs, J., Healy, O. and Peters, H. E. (2017), Paid family leave in the United States: Time for a new national policy, Urban Institute, Washington, DC.

Katz, L. and Krueger, A. (2016), The rise and nature of alternative work arrangements in the United States, 1995–2015, IRS Working Papers, Princeton University, Princeton.

Munnell, A. (2015), The average retirement age: An update, Center for Retirement Research, Chestnut Hill, MA.

RAND Corporation (2017), Working Conditions in the United States – Results of the 2015 American Working Conditions Survey, Santa Monica, CA.

Schmitt, J. (2018), Biggest gains in union membership in 2017 were for younger workers, Economic Policy Institute, Washington DC.

Society for Human Resource Management – Families and Work Institute (2017), National Study of Employers, Alexandria, VA.

United States Bureau of Labor Statistics (2018), Work stoppages summary, Washington DC.

United States Bureau of Labor Statistics (2019), Union members summary, Washington DC.

United States Census Bureau (2017), Income and poverty in the United States: 2016, Washington DC.

 

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