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16 Apr 2019 Updated 26 Mar 2021

United States of America

Venturing into the US? Here’s What You Need to Know About the Hiring Rules and Policies in the Market

Singapore companies could reap dividends by opening offices in the land of opportunity, but they need to be up-to-date on their chosen locations’ labour laws.

The booming economy in the United States has made it an attractive time for Singapore companies to expand their operations into the country, but those that do so should keep in mind its dynamic and complex labour laws.

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“You can have offices in Los Angeles and Philadelphia, for example, and they will have different laws that apply,” said Mr Jon Miller, Office Managing Shareholder at the Irvine, California office of Littler Mendelson, the largest US-based law firm specialising in labour and employment law. He was speaking at a seminar on Human Resource Compliance in the US that was organised by Enterprise Singapore.

Still, following a few general rules will enable Singapore companies to design effective and compliant human resource policies that can help them to flourish, noted Mr Miller and his colleague Mr Benjamin Goldman, who is Special Counsel at Littler Mendelson.

How to hire employees

Before you hire people, first evaluate your goals for expanding in the US. This will help you to determine which skills you need your US employees to have. After you have done this, make sure that your job advertisements specify your requirements.

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At the same time, check local laws and regulations to find out which questions can and cannot be asked during interviews. In California, it is illegal to ask applicants about their last-drawn salary, as this may perpetuate discriminatory gender wage gaps where women are paid less than men. There are also rules about when and how you can conduct background checks.

“If you’re going to be testing employees for skills, there are restrictions for what you can and cannot test. You can’t bring someone in for a test and have them do the job for an hour to benefit the company,” added Mr Miller.

Employers should also be careful when offering applicants jobs, and avoid sentences that begin with “we want” or “we will”, such as “we want you here for the long term”, since these may constitute enforceable oral contracts. Instead, use phrases such as “we hope”.

How to maintain good employee relations

“After you hire people, give them an employee handbook1 or documents listing the company’s policies, and make sure that they sign documentation acknowledging that they are aware of and understand the policies,” said Mr Goldman.

Taking this precaution, as well as carrying out performance reviews properly, is key to ensuring that you and your employees are all on the same page, so that you can focus on growing your business.

“The most important people in your workforce are your supervisors,” added Mr Goldman. “They are on the frontline dealing with your employees every day, and they are the face of the company for the employees. Make sure that your supervisors are good at dealing with people, or train them to be good at it.”

Also, do check regularly that you are compliant with all health and safety laws, and that your wage and benefits package is comparable to others in the same region and industry.

“There are very few mandatory benefits that companies have to give in the US, but we do see companies offering benefits like financial aid and elderly care to attract more talent. If you want to attract the best talent, you need to be as creative as you can be,” said Mr Goldman.

To enhance employee engagement, staff should be given a safe avenue to voice their concerns. Having someone in management speak to small groups of workers regularly will also foster trust and make them feel valued by the company.

On your part, be clear and honest during performance reviews. If an employee’s work is not up to mark, set objective targets for improvement, such as sales targets, specific and realistic timelines for them to prove that they are capable, and measures to help them become better, such as training. During such delicate conversations, it is also recommended to have a third party present.

While there are many things to take note of in the US, with proper training and preparation, it is not difficult to craft good human resource policies, said Mr Goldman. If you are in doubt, there are also specialists who can help you to vet and refine your policies.

Having good policies and practices will also improve your chances of succeeding in the US. Mr Goldman noted: “Many companies operate very efficiently in the US, and you can too.”

If you are interested in finding out more about doing business in the United States, click here.

1 In the US, many employers distribute a handbook which sets out a series of company policies. Most of these handbooks expressly state that they are not employee contracts.