Introduction 

When expanding internationally, few comparisons highlight the diversity of employment landscapes as clearly as Sweden and the United States. For global businesses managing teams across both countries, it’s essential to understand how labour laws differ - not just in theory, but in how they shape day-to-day people management.

Sweden represents one of the most employee-protective environments in the world, with strong union influence and robust social protections. The United States, by contrast, takes a more flexible, employer-centric approach, often with fewer statutory obligations. Neither model is inherently better - but each requires a fundamentally different strategy.

Whether you’re hiring in Malmö or Milwaukee, compliance isn’t optional. Here’s what global employers need to keep in mind.

Quick Tips

• Employment contracts are mandatory in Sweden - not so in many US states.

• 'At-will' employment exists in the US, but is not recognised in Sweden.

• Collective agreements shape large parts of Swedish employment - check if one applies.

• US leave entitlements are minimal compared to Sweden’s statutory holidays and sick pay.

• Termination processes in Sweden are formal and legally structured - not just a matter of notice.

Hiring and Contracts: What’s Required Where 

In Sweden, written employment contracts are a legal requirement, and must clearly set out pay, hours, duties, and notice periods. Many employers also fall under collective bargaining agreements (CBAs), which can supersede national law in terms of pay, working hours, and benefits.

In the US, however, many states do not require a formal contract. 'At-will' employment - where either party can end the employment relationship at any time without reason (within the bounds of anti-discrimination law) - is the default. This offers flexibility but can increase litigation risk if terminations are not handled with care.

I once supported a UK firm onboarding staff in both countries. In Sweden, we ensured CBAs were correctly applied and employment terms were registered with the union. In the US, we introduced offer letters with clear at-will disclaimers and included basic terms to reduce ambiguity and risk.

Working Time and Leave: Two Different Realities 

Sweden has some of the most generous leave entitlements in the world. Employees are entitled to a minimum of 25 days’ paid holiday, plus parental leave that can span over 400 days (shared between parents). Sick leave is partly covered by the employer and then by the Swedish Social Insurance Agency.

By comparison, the US has no federal statutory requirement for paid holiday or sick leave - it’s left to employers to determine what’s offered. Some states (like California and New York) have introduced their own mandates, but these are patchy. Federal law mandates just 12 weeks of unpaid leave under the Family and Medical Leave Act (FMLA) - and even that only applies to businesses with 50 or more employees.

From a compliance and wellbeing standpoint, this gap is critical. Employers with operations in both countries need to approach benefits locally - not based on a global average. In one client case, we developed separate leave policies that maintained fairness but met each jurisdiction’s baseline legal requirements.

Termination: Don’t Assume It’s Simple 

Terminating an employee in Sweden is rarely quick or informal. Legal grounds must be established (personal reasons or redundancy), notice periods must be observed (often 1–6 months), and unions must usually be consulted before action is taken. Unfair dismissal claims are handled by the Labour Court and can be costly if mishandled.

In the US, while at-will employment theoretically simplifies dismissal, employers still face risk from wrongful termination lawsuits, especially if discrimination or retaliation is alleged. Documentation and a clear disciplinary process are still best practice - and in some states, required.

I helped a Nordic tech firm navigate this contrast when downsizing. In Sweden, we followed strict consultation procedures and offered outplacement support. In the US, we ensured all terminations were documented with consistent reasoning and compliance with WARN Act requirements in applicable states. Both approaches took time and care - but protected the brand and avoided legal disputes.

Final Thoughts 

If you’re managing teams in Sweden and the USA, a global mindset alone won’t cut it. You need deep local knowledge, bespoke contracts, and HR processes that respect the legal and cultural context of each country. What works in Chicago might land you in hot water in Gothenburg.

Employment compliance is about more than ticking boxes. It’s about showing respect for your people, protecting your business, and building trust across borders.

What’s next for your global people strategy? 

Book a free compliance check-in or HR audit with ThinkGlobal HR. We’ll help you review your employment terms, manage international risks, and build people systems that work - wherever your business grows next.