![[US] Key differences between US and UK employment law](http://globalpayrollassociation.com/cdn/shop/articles/bigstock-Happy-Business-People-Office--471297041_1200x.jpg?v=1681907298)
It is important for companies in the US to understand the differences between UK and US employment law. While there are similarities between the two, there are also important differences that can have a significant impact on your business.
Agility PEO has explored some of the key differences between UK and US employment law and highlighted what you need to know if you are considering expanding your business to the UK.
Contracts of employment
One of the key differences between UK and US employment law is the way in which contracts of employment are structured. In the US, employment contracts are generally “at will,” meaning that either the employer or the employee can terminate the contract at any time, with or without notice or cause.
In the UK, however, contracts of employment are far more structured. Employees are entitled to a notice period, which can be up to 12 weeks depending on how long they have been with the company. In addition, employers are required to follow specific procedures if they want to terminate an employee’s contract, such as providing a valid reason for the termination and offering the employee the right to appeal.
Discrimination and harassment
Another key difference between UK and US employment law is the way in which discrimination and harassment are handled. In the US, discrimination and harassment are prohibited by federal law, and employees have the right to file a complaint with the Equal Employment Opportunity Commission (EEOC) if they feel they have been discriminated against or harassed.
In the UK, discrimination and harassment are also prohibited, but the laws are much more stringent. The Equality Act of 2010 sets out a number of protected characteristics, including age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. Employers who are found to have discriminated against an employee on any of these grounds can face severe penalties, including fines and even imprisonment.
Time off and leave
Finally, another area where UK and US employment law differ is in the area of time off and leave. In the US, there is no legal requirement for employers to offer paid time off or sick leave, although many do. In the UK, however, employers are required to offer a minimum of 28 days of paid leave each year, which includes bank holidays.
In addition, UK employees are entitled to take time off for a number of reasons, such as the birth or adoption of a child, caring for a sick family member, or attending jury service. Employers are required to provide time off for these reasons, and in some cases, they may also be required to pay the employee while they are on leave.
Minimum wage and overtime
The minimum wage and overtime regulations are also different in the UK and the US. In the US, the federal minimum wage is $7.25 per hour, although some states have set their own minimum wage, which is higher than the federal level. In the UK, the national minimum wage is currently £10.42 per hour for workers aged 23 and over with lower rates applying to younger workers.
In the US, non-exempt employees are entitled to overtime pay at a rate of one and a half times their regular rate of pay for any hours worked over 40 in a workweek. In the UK, there is no statutory overtime rate, although many employers pay a higher rate of pay for overtime hours worked.
Redundancy and severance pay
Redundancy, or the dismissal of employees due to the closure or downsizing of a business, is handled differently in the UK from the US. In the US, there is no legal requirement for employers to provide redundancy pay or severance pay, although some companies may offer it as part of their employee contracts.
In the UK, however, redundancy pay is a legal requirement for employees who have been with the company for two or more years. The amount of redundancy pay that employees are entitled to depends on their age, length of service, and weekly pay. In addition, employers may also be required to consult with employees before making them redundant and provide notice periods before terminating their contracts.
This overview covers some of the important differences you need to know. Download Agility’s full guide to employing in the UK for more detailed guidance or speak to a member of its UK-based expert team to find out more about how Agility PEO can help you.
Source: Agility PEO
Agility PEO is a Founder led, global Employer of Record service. Whilst the Agility team recognise the importance of technology in the delivery of a modern EoR service, their aim is to demonstrate a personal touch. A telephone number is prominently displayed on every page of their website and their friendly experts are always ready to discuss your international expansion project.
It is important for companies in the US to understand the differences between UK and US employment law. While there are similarities between the two, there are also important differences that can have a significant impact on your business.
Agility PEO has explored some of the key differences between UK and US employment law and highlighted what you need to know if you are considering expanding your business to the UK.
Contracts of employment
One of the key differences between UK and US employment law is the way in which contracts of employment are structured. In the US, employment contracts are generally “at will,” meaning that either the employer or the employee can terminate the contract at any time, with or without notice or cause.
In the UK, however, contracts of employment are far more structured. Employees are entitled to a notice period, which can be up to 12 weeks depending on how long they have been with the company. In addition, employers are required to follow specific procedures if they want to terminate an employee’s contract, such as providing a valid reason for the termination and offering the employee the right to appeal.
Discrimination and harassment
Another key difference between UK and US employment law is the way in which discrimination and harassment are handled. In the US, discrimination and harassment are prohibited by federal law, and employees have the right to file a complaint with the Equal Employment Opportunity Commission (EEOC) if they feel they have been discriminated against or harassed.
In the UK, discrimination and harassment are also prohibited, but the laws are much more stringent. The Equality Act of 2010 sets out a number of protected characteristics, including age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. Employers who are found to have discriminated against an employee on any of these grounds can face severe penalties, including fines and even imprisonment.
Time off and leave
Finally, another area where UK and US employment law differ is in the area of time off and leave. In the US, there is no legal requirement for employers to offer paid time off or sick leave, although many do. In the UK, however, employers are required to offer a minimum of 28 days of paid leave each year, which includes bank holidays.
In addition, UK employees are entitled to take time off for a number of reasons, such as the birth or adoption of a child, caring for a sick family member, or attending jury service. Employers are required to provide time off for these reasons, and in some cases, they may also be required to pay the employee while they are on leave.
Minimum wage and overtime
The minimum wage and overtime regulations are also different in the UK and the US. In the US, the federal minimum wage is $7.25 per hour, although some states have set their own minimum wage, which is higher than the federal level. In the UK, the national minimum wage is currently £10.42 per hour for workers aged 23 and over with lower rates applying to younger workers.
In the US, non-exempt employees are entitled to overtime pay at a rate of one and a half times their regular rate of pay for any hours worked over 40 in a workweek. In the UK, there is no statutory overtime rate, although many employers pay a higher rate of pay for overtime hours worked.
Redundancy and severance pay
Redundancy, or the dismissal of employees due to the closure or downsizing of a business, is handled differently in the UK from the US. In the US, there is no legal requirement for employers to provide redundancy pay or severance pay, although some companies may offer it as part of their employee contracts.
In the UK, however, redundancy pay is a legal requirement for employees who have been with the company for two or more years. The amount of redundancy pay that employees are entitled to depends on their age, length of service, and weekly pay. In addition, employers may also be required to consult with employees before making them redundant and provide notice periods before terminating their contracts.
This overview covers some of the important differences you need to know. Download Agility’s full guide to employing in the UK for more detailed guidance or speak to a member of its UK-based expert team to find out more about how Agility PEO can help you.
Source: Agility PEO
Agility PEO is a Founder led, global Employer of Record service. Whilst the Agility team recognise the importance of technology in the delivery of a modern EoR service, their aim is to demonstrate a personal touch. A telephone number is prominently displayed on every page of their website and their friendly experts are always ready to discuss your international expansion project.