Labour Law

Labor law in the USA

A white paper on employment law in the USA is available below.

Anyone doing business in the USA may also have to deal with US labor law. In this context, the same questions arise time and again: How is an employment relationship established in the USA? How is an employment relationship terminated in the USA? What rights and obligations arise between employee and employer in the USA? What must be considered in connection with anti-discrimination laws in the USA? What collective employment law must be observed in the USA? Is there social security law in the USA? What is the legal relationship between Germany and the USA in the event of an assignment? The answers to these questions are regulated by US labor law both at the US federal level and at the US state level. Even municipalities (cities and counties) in the USA have begun to issue standards in the area of labor law.

Establishing an employment relationship in the USA naturally requires an employment contract. However, written employment contracts are rather unusual in the USA, unless the employee is a senior executive. Nevertheless, it is advisable in practice to document employment contracts by means of an “employee offer letter”. As a rule, there is no protection against dismissal in the USA unless an exception applies. The exceptions are not insignificant and are not always clear. Legal disputes often arise in this area. Risks can be partially mitigated through precautionary planning and best practices. In disputed cases, a “separation agreement” should be worked towards at the time of termination, which can also significantly mitigate residual risks.

As far as rights and obligations in the US employment relationship are concerned, there are many regulations to be observed in connection with remuneration, above all the FLSA (Fair Labor Standards Act) enacted at US federal level. In addition, the US federal FMLA (Family Medical Leave Act) is relevant in the area of days off and leave rights.

Collective labor law in the USA is mainly shaped by the NLRA (National Labor Relations Act). Among other things, this requires employers to take the utmost care to ensure that employees' right of association is not violated. The legal definition of these so-called “concerted protected activities” is interpreted broadly. This standard applies regardless of whether the company is located in a “right to work state” or not.

In the USA, employers use employee handbooks in many cases, particularly in order to handle working conditions uniformly with all their employees. This promotes uniform handling of problem areas and minimizes the risk of discrimination. Handbooks can also be good for the working atmosphere, as handbooks convey a certain rationality, predictability and consistency from the employee's point of view. However, handbooks can also lead to liability risks if they are written or used incorrectly.

The USA also has a social security law - albeit not nearly as pronounced as in Germany - which must be observed in employment relationships. Particularly in secondment cases, special features can arise.

Galaniuk Law supports its clients in all matters of US employment law. For example, Galaniuk Law drafts and negotiates employment contracts in the USA or employee offer letters. The law firm also advises on dismissals in order to mitigate the risks of unlawful termination with liability consequences. Above all, Galaniuk Law provides specialist support in the drafting and negotiation of separation agreements. Galaniuk Law also assists in the preparation of useful employee handbooks in the USA and advises on the creation of sustainable operating and personnel policies in the USA. Galaniuk Law also advises on basic questions of social security law in the USA and explains to companies what to look out for in this context. Galaniuk Law is in a position to involve the appropriate specialist on site in the USA for other special questions relating to employment law in the USA. In these cases, Galaniuk Law works in the interests of its clients as their external in-house counsel.

You can request a white paper on US employment law by filling out the form below.