United States

Key Facts at a Glance

Employment At-Will Doctrine

The United States operates under the employment at-will doctrine, meaning that either the employer or the employee may terminate the employment relationship at any time, for any lawful reason, or for no reason at all, with or without notice. This is the default rule in 49 states (Montana is the exception, requiring just cause after a probationary period).

Exceptions to At-Will Employment

Public Policy

Recognised in most states. Termination is wrongful if it violates a clear public policy mandate - e.g., firing an employee for refusing to break the law, filing a workers' compensation claim, or serving on a jury.

Implied Contract

Recognised in many states. An implied contract may arise from employer representations in handbooks, policies, or oral promises - e.g., progressive discipline policies that create an expectation of termination only for cause.

Good Faith & Fair Dealing

Recognised in a minority of states (e.g., California, Massachusetts). Requires that termination decisions not be made in bad faith or with malicious intent - e.g., firing to avoid paying earned commissions.

Practical Note: Despite at-will, most employers follow progressive discipline and document performance issues. This reduces litigation risk and supports a defence if a termination is challenged under anti-discrimination or retaliation statutes.

Federal Anti-Discrimination Laws

Multiple federal statutes prohibit employment discrimination. The Equal Employment Opportunity Commission (EEOC) enforces these laws.

Key Obligations

• Reasonable Accommodation: Under the ADA, employers must provide reasonable accommodations for qualified individuals with disabilities unless doing so would impose undue hardship. Similarly, the Pregnant Workers Fairness Act requires accommodations for pregnancy-related limitations.
• Anti-Harassment: Employers must take reasonable steps to prevent and address harassment based on any protected characteristic. The EEOC updated its harassment guidance in 2024.
• Retaliation Prohibition: Federal law prohibits retaliation against employees who file complaints, participate in investigations, or oppose unlawful practices. Retaliation claims are the most frequently filed charge with the EEOC.

State Expansion: Many states and localities provide broader protections than federal law - covering additional characteristics (e.g., marital status, political affiliation, criminal history), applying to smaller employers, and offering longer filing deadlines.

EEOC

National Labor Relations Act (NLRA)

The NLRA (1935) protects the rights of private-sector employees to organise, form or join unions, bargain collectively, and engage in concerted activity. It is enforced by the National Labor Relations Board (NLRB).

Core Rights (Section 7)

• Right to self-organisation and to form, join, or assist labor organisations
• Right to bargain collectively through chosen representatives
• Right to engage in concerted activities for mutual aid or protection
• Right to refrain from any of the above

Union Organising Process

1. Employees show interest (authorisation cards signed by 30%+ of bargaining unit)
2. Petition filed with NLRB
3. NLRB determines appropriate bargaining unit
4. Secret-ballot election (or voluntary recognition if 50%+ cards)
5. If union wins majority, employer must bargain in good faith

Right-to-Work States

26 states have right-to-work laws (Michigan repealed its law in 2024) that prohibit union security agreements requiring employees to join or pay fees to a union as a condition of employment. Following Janus v. AFSCME (2018), public-sector employees nationwide cannot be required to pay union fees.

Unfair Labor Practices

The NLRA prohibits both employer and union unfair labor practices, including:

• Employer: Interfering with Section 7 rights, dominating or assisting a union, discriminating based on union activity, refusing to bargain in good faith
• Union: Coercing employees, causing employer to discriminate, refusing to bargain, secondary boycotts, excessive dues

NLRB

Fair Labor Standards Act (FLSA)

The FLSA establishes minimum wage, overtime pay, recordkeeping, and child labor standards for employees in the private sector and government.

Core Requirements

• Federal minimum wage: $7.25/hour (unchanged since 2009). Many states and cities set higher rates (e.g., Washington $16.28, California $16.00, NYC $16.00 as of 2024).
• Overtime: Non-exempt employees must receive 1.5× their regular rate for hours worked beyond 40 per workweek. There is no federal daily overtime requirement (some states like California have one).
• Tipped employees: Minimum cash wage of $2.13/hour if tips bring total to at least $7.25/hour (tip credit).

Exempt vs. Non-Exempt Classification

To be exempt from overtime, an employee must satisfy both a salary test and a duties test:

Misclassification Risk: Incorrectly classifying non-exempt employees as exempt is one of the most common FLSA violations. It can result in back pay for unpaid overtime (up to 3 years), liquidated damages (double), and attorney's fees. Class and collective actions are frequent.

DOL FLSA

Family and Medical Leave Act (FMLA)

The FMLA provides eligible employees with up to 12 weeks of unpaid, job-protected leave per year for specified family and medical reasons.

Eligibility

• Employer has 50+ employees within 75 miles of the worksite
• Employee has worked for the employer for at least 12 months
• Employee has worked at least 1,250 hours in the preceding 12 months

Qualifying Reasons

• Birth and care of a newborn child (within 12 months of birth)
• Placement of a child for adoption or foster care
• Care for a spouse, child, or parent with a serious health condition
• Employee's own serious health condition that prevents performing job functions
• Qualifying exigency related to a family member's military service
• Care for a covered service member with a serious injury/illness (up to 26 weeks)

State Paid Leave Programs

The FMLA provides only unpaid leave. However, a growing number of states have enacted paid family and medical leave programs:

California · New York · New Jersey · Washington · Massachusetts · Connecticut · Oregon · Colorado · Maryland · Rhode Island · DC · + others

Worker Adjustment and Retraining Notification Act (WARN)

The WARN Act requires employers to provide 60 calendar days' advance written notice of plant closings and mass layoffs.

Coverage

• Applies to employers with 100 or more full-time employees (or 100+ employees working at least 4,000 hours/week combined)
• Plant closing: Shutdown of a single site causing 50+ employees to lose employment
• Mass layoff: Layoff of 500+ employees, or 50-499 employees if they constitute 33%+ of the workforce at the site

Exceptions

• Faltering company: Employer actively seeking capital and notice would jeopardise the effort
• Unforeseeable business circumstances: Sudden, dramatic, and unexpected event
• Natural disaster: Floods, earthquakes, storms

Penalty: Employers who violate WARN are liable for back pay and benefits for up to 60 days per affected employee, plus a $500/day civil penalty (if government notification is missed). Many states have "mini-WARN" acts with lower thresholds and longer notice periods (e.g., California, New York, Illinois).

Occupational Safety and Health (OSHA)

The Occupational Safety and Health Act (1970) requires employers to provide a workplace free from recognised hazards. The Occupational Safety and Health Administration (OSHA) sets and enforces standards.

Employer Obligations

• Comply with all applicable OSHA standards
• Maintain workplace free from serious recognised hazards (General Duty Clause)
• Record work-related injuries and illnesses (OSHA 300 Log for employers with 11+ employees)
• Electronically submit injury/illness data (250+ employees, or 20+ in high-hazard industries)
• Provide training and personal protective equipment at no cost to employees
• Post OSHA notices and citations

Whistleblower Protection

OSHA enforces whistleblower protections under 25+ federal statutes, prohibiting retaliation against employees who report safety concerns, violations of securities laws, fraud, environmental hazards, and other protected activity.

OSHA

Data Privacy in Employment

There is no comprehensive federal employee privacy law in the United States. Employee privacy is governed by a patchwork of federal and state statutes, common law, and constitutional provisions (for public employers).

Key Federal Statutes

Key State Laws

• California (CCPA/CPRA): Applies to employee personal information for large businesses. Provides rights to know, delete, opt out, and correct data. Enforced by the California Privacy Protection Agency.
• Illinois BIPA: Biometric Information Privacy Act - strict consent requirements for collection of fingerprints, face scans, retina scans. Private right of action with statutory damages ($1,000-$5,000 per violation). Major litigation risk.
• Social media password laws: ~30 states prohibit employers from requesting employees' social media login credentials.

Non-Compete and Restrictive Covenants

The enforceability of non-compete agreements varies dramatically by state. The trend is toward greater restriction of non-competes, particularly for lower-wage workers.

Current Landscape

• California, Minnesota, Oklahoma, North Dakota: Non-competes are unenforceable (with narrow exceptions).
• FTC Rule (2024): The FTC issued a final rule banning most non-competes nationwide, but it was blocked by federal courts before taking effect. The rule's future remains uncertain.
• Income thresholds: Multiple states prohibit non-competes for employees below a salary threshold (e.g., Washington: $116,594; Colorado: $112,500; Oregon: $113,241 as of 2024).
• Notice/consideration requirements: Some states (e.g., Illinois, Massachusetts, Oregon) require advance notice, garden leave pay, or independent consideration beyond continued employment.

Practical Advice: Always check the applicable state law. Non-solicitation agreements (customers and employees) and confidentiality/NDA agreements are generally more enforceable than non-competes and may achieve the same business objectives with lower legal risk.

State and Local Compliance Complexity

US employment law is layered across federal, state, and local jurisdictions. Multi-state employers face a patchwork of requirements that often exceed federal standards.

Common Areas of State/Local Regulation

Key Risk: Multi-state employers must monitor legislative changes across all jurisdictions where employees work - including remote workers, who are generally subject to the laws of their work location, not the employer's headquarters.

Employee Thresholds - Quick Reference

Thresholds are measured differently by statute (current employees, employees in prior year, full-time equivalents, etc.). State and local thresholds are often lower. Verify counting method for each obligation.

Practical Timelines

Key Challenges and Risk Areas

Multi-State Compliance: Employers with employees in multiple states must navigate a complex patchwork of employment laws, wage and hour rules, leave requirements, and reporting obligations. Remote work has dramatically expanded this burden, as employees working from home are generally subject to the laws of their work location.

Worker Classification: Misclassifying employees as independent contractors is a major enforcement target. The DOL's 2024 independent contractor rule applies a multi-factor "economic reality" test. The IRS, state agencies, and the NLRB each apply different tests. Liability includes back taxes, benefits, overtime, and penalties.

AI in Employment Decisions: Increasing regulatory scrutiny of AI/automated tools in hiring and employment. NYC Local Law 144 requires bias audits of automated employment decision tools. The EEOC has issued guidance on AI and discrimination under Title VII and the ADA. More state/city laws expected.

Pay Equity and Transparency: Growing requirements for salary range disclosure, pay equity audits, and salary history bans. Proactive pay equity analyses are becoming standard practice to mitigate litigation risk under the Equal Pay Act, Title VII, and state equal pay laws.

Wage and Hour Litigation: FLSA collective actions and state wage claims remain the highest-volume employment litigation in the US. Common triggers include overtime misclassification, off-the-clock work, meal/rest break violations, and tip credit disputes.

Resources and Links

Federal Agencies

• U.S. Department of Labor (DOL)
• Equal Employment Opportunity Commission (EEOC)
• National Labor Relations Board (NLRB)
• Occupational Safety and Health Administration (OSHA)
• Wage and Hour Division (WHD)

Legislation and Guidance

• Congress.gov - Federal Legislation
• Electronic Code of Federal Regulations (eCFR)
• DOL - State Minimum Wage Laws
• EEOC Employer Resources

See also

• Americas
• Canada
• Mexico
• Brazil