Introduction

In an increasingly borderless business world, more companies are exploring markets off the beaten track - and Andorra is one of them. Nestled between France and Spain, Andorra may be small, but its strategic location and business-friendly tax environment are attracting attention from international firms. But expanding into Andorra is not the same as hiring in the US.

For global employers, understanding the key differences in employment law between Andorra and the United States is crucial to staying compliant and avoiding costly missteps. Whether you’re onboarding employees, setting up a local entity, or managing a hybrid workforce, here’s what HR teams and business leaders need to know.

Quick Tips

• In Andorra, employment contracts must be written - verbal agreements are not legally valid.

• The US generally allows 'at-will' termination, while Andorra enforces stronger employee protection laws.

• Working hours, leave entitlements, and dismissal procedures differ widely between the two.

• Andorran employment law is influenced by European norms, even though it's not in the EU.

• Misunderstanding classification or tax registration can lead to fines in both countries.

Contractual Clarity is Essential

In Andorra, all employment contracts must be in writing and must clearly define the job title, salary, working hours, probation period, and notice terms. There is no concept of 'at-will' employment as seen in most of the United States, where employers can typically terminate staff without cause, unless a contract states otherwise.

This difference can catch US employers off guard. Termination in Andorra often requires valid reasoning and, in many cases, severance pay. Disputes can arise quickly if local requirements are not met. As with most European-based systems, employee rights are protected more stringently than under typical US frameworks.

A CIPD report found that businesses with strong contract clarity in cross-border hiring reduced legal risk by over 40%. For HR teams, the takeaway is simple - never assume what works in one country will automatically translate to another.

Working Hours and Leave: Not One Size Fits All

The standard working week in Andorra is 40 hours, with overtime strictly regulated and compensated. Employees are entitled to 30 calendar days of paid annual leave, in addition to public holidays.

In contrast, US labour law does not require employers to offer paid leave at the federal level, although many states and companies do. The result? Employees in Andorra can expect far more statutory protection in terms of time off than their US counterparts.

Mismatched expectations around working hours, availability, or rest periods can lead to compliance breaches or unhappy teams. When supporting employees in Andorra, it’s essential to plan rotas, leave tracking, and compensation structures accordingly.

Onboarding and Termination - Legal Requirements Matter

In the US, onboarding is often informal, with fewer mandatory documentation requirements beyond federal and state tax forms and EEO notices. Andorra, however, requires more structured onboarding, including social security registration, contract lodging, and health cover documentation.

Similarly, ending an employment relationship in Andorra typically involves notice periods, formal documentation, and in some cases, redundancy payments. Contrast that with the US, where many states allow same-day terminations without severance - unless otherwise stated in a contract.

For one ThinkGlobal HR client, expanding from Colorado to Andorra meant rethinking the entire lifecycle of employment. We helped them create a tailored hiring and exit playbook that complied with local regulations while staying consistent with their company culture. It prevented confusion, ensured full compliance, and fostered a stronger employee experience across both locations.

Final Thoughts

Hiring in Andorra and the US requires two different playbooks. Don’t risk using the wrong one. From contracts to compliance, the details matter - and getting them wrong can lead to legal, financial, and reputational costs. If you’re supporting employees in both countries, or looking to expand, now is the time to align your HR systems, documentation, and local processes. Getting this right from the start is not just about risk mitigation - it’s about building credibility, trust, and a globally resilient workforce.

What’s next for your global people strategy?

Book a free compliance check-in or HR audit with ThinkGlobal HR. Whether you’re expanding into Andorra, navigating multi-country employment, or need a contract review, we’re here to help with practical, strategic advice you can trust.