Raising capital in the U.S. can accelerate a startup’s growth, but only with the right preparation.
In the United States, a salary alone offers no protection. Without health insurance, supplemental retirement plans, or coverage in case of sick leave, an employee can find themselves vulnerable overnight. For a French startup establishing itself in the US, employee benefits become a crucial tool for recruitment and retention.
In France, employment automatically grants certain rights. Social security, unemployment benefits, and retirement form an implicit, rarely questioned foundation. In the United States, this foundation does not exist. "In the United States, if you only provide a salary, the employee is not protected from anything. If they become ill, they can find themselves without any coverage" explains Laurence Goleret Ruiz, Co-Founder of Orbiss , an accounting, tax, and consulting firm based in the United States.
In this context, compensation is no longer viewed the same way as in France. Salary becomes a starting point, while the overall benefits package influences both the candidate's decision and the employer's credibility. This is especially true since, for an American employee, joining a foreign company entering the market is still perceived as riskier than joining a local firm. "The first recruits know that everything isn't yet fully structured. They have to trust the employer to quickly implement insurance and protections in a system where nothing is automatic" emphasizes Laurence Goleret Ruiz.
Structuring Your Presence Before Pitching
For a French company starting out in the United States, certain building blocks quickly become essential. These are based first and foremost on health insurance, supplemented by vision and dental coverage, as well as a 401(k) retirement plan. “ This allows us to recreate a functional foundation of protection, even if it remains very different from the French model” summarizes Laurence Goleret Ruiz.
This foundation comes at a cost that many founders underestimate. "For health insurance alone, you have to budget between $800 and $1,500 per month per employee ," she explains. Once all the benefits are included, the amount can reach up to $2,000 per month per employee.
The question of financing then becomes strategic. The company can cover all or part of the premium. However, Orbiss warns of the perverse effects of too large a cost-sharing arrangement. "If too large a share is left to the employee, they may decide not to take out the insurance, because even 20% can still be very expensive" cautions Laurence Goleret Ruiz.
Another subtle point is that coverage can be adjusted according to family composition. Being employed alone, with children, with a spouse, or with the whole family involves different costs and trade-offs. These choices directly influence the attractiveness of the offer, especially in a market where candidates carefully compare packages.
This issue is particularly sensitive during the initial recruitment process. "Insurance plans often begin with two employees, and the most attractive plans start with five" she points out. The first employees therefore accept a greater degree of risk, which underscores the importance of clear communication and the employer's credibility from the outset.
Foresight, an often underestimated security measure
Beyond healthcare, Orbiss emphasizes a topic often overlooked by French founders: disability insurance. Two systems structure the American model. Short-term disability insurance covers short periods of absence from work, while long-term disability insurance addresses more serious situations. These systems are not automatic, but according to Orbiss, their cost remains relatively manageable. In some states, short-term disability insurance can also help cover maternity leave in the absence of a structured public system.
Understanding these mechanisms is one of the main points of contention for French entrepreneurs, but for employees, these benefits are far from insignificant. "Anything we can offer in terms of benefits improves well-being. The well-being of being able to access healthcare and not finding oneself without income in case of hardship" emphasizes Laurence Goleret Ruiz.
Everything becomes contractual in an ultra-flexible labor market
The final shock is cultural. In the United States, much of what is governed by law in France becomes contractual. "Labor rights are defined by the states, with significant local disparities" notes Laurence Goleret Ruiz. Vacation time is the most striking example. No federal framework mandates a minimum number of days, everything is based on negotiation. While there is no federal minimum for paid vacation, many states and cities nevertheless impose rules on sick leave. In California, for example, the law provides for at least five days of paid sick leave per year, but some cities like San Francisco and Los Angeles apply higher thresholds.
In practice, a base of around ten days of paid leave and a few sick days is common, although many companies go beyond this to remain attractive, sometimes even approaching European standards. These additional days are often seen as a relatively simple lever, as they have no immediate impact on cash flow.
It is still necessary to formalize the rules precisely. The acquisition of leave, its accumulation or its payment in case of departure must be framed in internal documents, in particular the employee handbook , which structures the company's practices.
This contractual approach is part of a broader framework: employment at will . "Employers who set up operations mainly focus on the fact that they can lay off employees overnight, but they forget that employees can leave just as quickly" emphasizes Laurence Goleret Ruiz. In a market that has long been favorable to talent, retention is becoming a constant challenge.
For a French startup establishing itself in the United States, employee benefits are neither a perk nor a bonus. They constitute a basic infrastructure, essential for recruiting, reassuring, and retaining talent in a system where nothing is automatic. "The more protective a company is, the more it can recruit" concludes Laurence Goleret Ruiz.
Originally published in French by Maddyness. This article has been translated and adapted for an English-speaking audience. Click here to read the original version.
