Introduction 

When managing teams across the UK and the US, assuming that employment laws will be broadly similar can lead to serious missteps. These two powerhouses may share a language, but when it comes to labour laws, their systems operate from entirely different legal and cultural foundations.

In my work with transatlantic businesses, I’ve seen these differences create everything from minor administrative headaches to major compliance breaches. With employment litigation on the rise in both countries (McKinsey recently noted a 20% increase in employment claims in the US), it’s crucial for HR and leadership teams to understand the risks and responsibilities on both sides of the pond.

Quick Tips

• UK employment law is more employee-protective and codified in statute - US law is more employer-friendly and state-led.

• “At-will” employment does not exist in the UK.

• UK employees are entitled to a minimum of 28 days’ paid leave - there’s no federal requirement in the US.

• Termination in the UK requires a fair process - in the US, the risk varies heavily by state.

• US benefits are largely employer-determined - UK benefits are more centralised and mandated.

Termination and At-Will Employment 

In the US, most employees are hired on an “at-will” basis, meaning they can be terminated at any time for almost any reason (barring discrimination or retaliation). But this doesn’t hold true in the UK. Here, employment law requires that dismissals are both procedurally fair and substantively justified.

Under UK law, employees with over two years’ service have protection against unfair dismissal. Employers must follow a clear disciplinary or redundancy process and provide reasonable notice. Failure to do so can lead to tribunal claims, which are time-consuming and costly.

I once supported a US tech company expanding into Manchester. They were shocked to learn that their standard three-line termination letter would not be legally defensible. We helped them build a structured approach to performance management and exit procedures, avoiding a very public employment claim.

Paid Leave and Working Time 

Paid leave is another key difference. In the UK, full-time workers are legally entitled to 28 days of paid annual leave (including public holidays). There are also strict rules about rest breaks and maximum weekly hours under the Working Time Regulations.

By contrast, the US has no federal requirement for paid holiday - it’s entirely at the discretion of the employer. According to the OECD, the average US worker gets 10 paid days off per year, often after a year of service. What feels standard in London might seem excessive in Los Angeles.

If you’re managing teams across both countries, be clear in your contracts and employee handbooks. Equitable doesn’t always mean identical - but setting clear, transparent expectations in each region is vital.

Employee Rights and Benefits 

The UK has a more structured approach to employee rights, including maternity and paternity leave, sick pay, redundancy payments, and union recognition. Most of these rights are set out in national legislation and apply regardless of employer size.

In the US, these protections are limited and vary significantly by state. For instance, while California mandates paid sick leave, many other states do not. Family leave entitlements are governed by the federal Family and Medical Leave Act (FMLA), which only applies to employers with 50 or more staff.

A client I worked with in Boston was surprised to learn that rolling out a “global benefits strategy” wasn’t feasible. Instead, we worked together to create a core benefits philosophy, supported by local execution plans. This protected both budget and employee experience.

Real Example: Navigating Transatlantic Compliance 

One multinational client with hubs in both London and New York approached us to harmonise their HR policies. Their UK team felt short-changed by limited US-style benefits, while their US team felt overwhelmed by sudden changes. We created a dual-compliance framework that met legal requirements in both countries, while aligning to their values and culture.

The result? Improved retention, clearer communication, and reduced compliance risk.

Final Thoughts 

Understanding the differences in labour law between the UK and the US is not just a legal necessity - it’s a mark of respect for your employees and your brand. With the right support, you can operate confidently in both systems without losing sight of fairness or efficiency.

What’s next for your global people strategy? 

Book a free compliance check-in or HR audit with ThinkGlobal HR. Whether you need help reviewing contracts, managing terminations, or navigating statutory obligations, we’re here to help. Let us be the expert extension of your team, giving you the clarity to grow globally, compliantly.