Labor law
in the USA.

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United States

Labor law in the USA – Overview

United States labor law sets out the responsibilities of employers and the rights and duties of employees. The Fair Labor Standards Act (1938) is the key piece of legislation regarding employment agreements and employee remuneration.

At the federal level, additional legislation such as the Family and Medical Leave Act (1993) and the Occupational Safety and Health Act (1970) establish other statutory minimum rights for employees. The US federal government allows state legislators to go beyond the minimum standards in creating favorable conditions for both employers and employees. For example, there is no federal law requiring paid time off but some states have legislated paid time off for reasons other than illness.

Although labor laws exist at both the federal, state and local levels, US employers are given a lot of leeway when it comes to defining the employer/employee relationship. Many of the employee benefits mandated by legislation in European countries are left up to the discretion of the employer in the USA. US employment agreements are an opportunity to attract and maintain top talent

Notice period laws in the USA

Dismissals in the USA

Employment agreements in the USA are offered according to the concept of “at will” employment. ‘At will’ employment sets no legal requirement for notice periods.

Although notice periods are not mandatory, employers hiring in professional settings tend to include a notice clause in employment agreements. The standard notice period is 2 weeks with more senior positions requiring a 30 day notice period.

Some states, such as Georgia, require written notice but this is an exception to the norm.

Resignations in the USA

There is no requirement in the US for employees to give a minimum notice period when resigning, unless such a stipulation exists in the employment contract. Still, one month’s notice is standard when an employee resigns.

Severance laws in USA

There is no legal requirement for severance pay in the United States. Severance pay is a matter of agreement between employer and employee and should be detailed in the employment agreement.

Where severance policies exist, they should cover situations where employees resign for good reason or when a dismissal is for just cause.

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FAQs

What are the most relevant legal documents related to employment law in the USA?

The Fair Labor Standards Act 1948 sets out minimum standards of employment for employees and Title VII of the Civil Rights Act 1964 prohibits discrimination in matters of employment.

Can I terminate an employee during their probationary period in USA? How much notice do I need to give?

At will employment gives employers increased flexibility in employment relationships, particularly when it comes to terminating employment agreements. Terminating an employment contract during the probationary period is not prohibited and employers are not required to provide notice. However, it is considered good practice to include probationary and notice periods in the employment agreement. The standard probationary period in the US is usually 90 days.

After the probationary period, what is the process to terminate employment in USA?

Employers in the US are not obliged to follow a specific process when terminating an employment agreement. It is considered good practice for employers to provide details of the dismissal process in the employment agreement but this is not a legal requirement in most states.
Employers must comply with legislation on employment discrimination being mindful not to terminate employees for reasons that relate to protected classes (e.g. race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), ethnic origin, age (40+), disability and genetic information (including family medical history).

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