You want to start your business in the USA, but you do not know how to navigate between French and American laws. Contracts, minimum wage, working hours, paid leave, social protections… But which rules apply in the United States?
The 3 essential things to know about employment law in the United States
Oral employment contracts
In the United States, there is a very common practice regarding employment contracts: oral employment contracts. These contracts, also called “at will” employment contracts, are exclusively verbal (in France, for example, we are accustomed to written employment contracts). Thus, even though this contract results from a verbal agreement, the contract is considered to exist between the employer and the employee. Unlike the employment contracts we are familiar with, these types of contracts can be terminated at any time, at the initiative of either the employer or the employee, without justification, explanation, or notice. The major difference here is that the contract can be terminated without notice. However, the law provides for grounds that make dismissal illegal when it involves discrimination, violation of public policy, retaliation following whistleblowing, and so on. In practice, however, both parties generally observe two weeks’ notice before an employee permanently leaves the company. Nevertheless, an increasing number of employers in the United States are turning to written contracts. This is the case when a company in the USA hires a highly qualified employee, as it allows them to protect themselves against any type of legal action brought by employees. If the employer decides to establish an employment contract, it generally includes the following elements:- The employment contract’s effective date if it is a fixed-term contract
- Details of the clauses agreed upon by both parties
Salary, working hours, leave: American working conditions that differ greatly from those in France
Salary
In the United States, it has only been since 2010 that the federal gross minimum hourly wage has been set at $7.25 per hour. This minimum hourly rate is guaranteed to all employees; it is also called the subminimum. However, each state is free to set its own rate: it is, for example, $10 in California and Massachusetts, $9 in New York, $8.05 in Florida, and $5.15 in Georgia. The minimum wage set by each state can be found online: https://www.dol.gov/ It should be noted, however, that in the event of a conflict, the law more favorable to the employee applies. Employees may be paid by the hour (Hourly Position) or on a fixed salary basis (Salary Position).Working hours
Regarding working hours, there is no limit on the number of hours that may be worked per week. However, customary working hours average 40 hours per week. Beyond that, overtime is paid at 1.5 times the basic hourly wage, but this is not a legal requirement.Annual leave
As with working hours, there are no regulations governing paid leave. It is up to the employer to decide whether to grant paid leave to employees. However, approximately 90% of employees receive paid or unpaid leave. In practice, employees are granted two weeks of paid leave per year (after the first year of employment).Medical leave
In the United States, an employee may take up to 12 weeks of leave per year. This leave may be justified by specific medical or family reasons. These 12 weeks are, of course, unpaid, but they ensure that the employee’s position is maintained until their return. Leave may be taken in the following cases:- Birth of a child (until the child is one year old)
- Serious illness of a spouse, child, or parent
- Serious illness directly affecting the employee
