Introduction 

Whether you’re hiring your first international employee or expanding an entire team across borders, understanding how employment law differs by country is essential. Spain and the United States offer two starkly different approaches to labour regulation - and if you’re operating in both, failing to align with local frameworks can quickly expose your business to legal, reputational, and financial risk.

With hybrid teams on the rise and international remote hiring becoming the norm, it’s more important than ever for HR leaders and business owners to grasp the fundamentals. Here’s a practical comparison to help you get it right.

Quick Tips

• In Spain, employment is heavily regulated and employee rights are protected by law and collective agreements.

• The US follows an 'at-will' employment model with fewer statutory protections.

• Termination in Spain requires objective cause and compensation - in the US, it's often more flexible.

• Spain mandates minimum paid holidays and strong protections for sick leave and maternity - US law is minimal unless supplemented by state policies or company schemes.

• Payroll, contracts, and benefits must be fully localised in both countries - don’t assume one template fits all.

Contracts and Employee Classification 

Spain requires written employment contracts that clearly outline the terms of employment, benefits, and role classification. Probation periods, working hours, and collective bargaining clauses are typically included, and many roles are governed by sector-specific agreements known as convenios colectivos.

In contrast, the US allows more informal employment agreements. Many employees work without a formal contract, and classification (employee vs contractor) is often mismanaged. Misclassification is one of the top issues flagged by US regulators, particularly for companies hiring remote workers across multiple states.

I recently supported a client who had used the same contract template across both Spain and the US. In Spain, this triggered an immediate compliance issue due to missing statutory clauses and lack of reference to local labour agreements. We quickly adapted the contract, liaising with Spanish counsel, and avoided a fine from the labour inspectorate.

Termination and Notice Periods 

In Spain, employers must justify terminations with cause (disciplinary or objective) and provide severance unless there is serious misconduct. Employees are also entitled to notice or payment in lieu. Unfair dismissal claims are common and often succeed unless proper process is followed.

By contrast, most US states follow 'at-will' employment - allowing either party to terminate without cause, as long as it's not discriminatory or retaliatory. While this offers more flexibility, it can also lead to higher turnover and weaker employee trust if not handled well.

For global businesses, it’s crucial to train line managers on jurisdiction-specific processes. A US-based leadership team may unintentionally breach Spanish law simply by following their usual playbook.

Working Time and Leave 

Spanish employees are entitled to 22 working days of paid holiday per year by law, plus public holidays. Statutory paid sick leave and paid parental leave are generous compared to global standards. There are also strict rules around working hours, rest breaks, and overtime.

In the US, there is no federal requirement for paid holiday or sick leave. These benefits are employer-determined or governed by state law. For example, California mandates paid sick leave, but Texas does not. The Family and Medical Leave Act (FMLA) provides 12 weeks of unpaid leave for certain family or medical reasons - but only for eligible employees at covered employers.

One US-based client of ours recently expanded into Spain and was surprised by the administrative burden of leave tracking and entitlements. We helped them build localised systems to ensure compliance, including integration with their global HRIS.

Final Thoughts 

Spain and the USA reflect two very different labour law philosophies - one grounded in statutory protections, the other in employer discretion. Both require tailored approaches.

Whether you’re hiring locally or managing global teams, the key is alignment - not just with the law, but with the culture. Employees notice when companies get this right, and so do regulators.

What’s next for your global people strategy? 

Book a free compliance check-in or HR audit with ThinkGlobal HR. Whether you need tailored contracts, support with remote hiring, or guidance on local obligations, we’ll help you stay compliant and confident in every country you operate in.