Introduction

Whether you’re onboarding talent in Prague or setting up shop in Portland, labour laws can make or break your global growth strategy. Understanding the key differences between jurisdictions is not just a legal requirement - it’s essential to managing people ethically, avoiding costly mistakes, and building sustainable operations.

Two countries often compared by growing firms are the Czech Republic and the United States. Both are attractive for different reasons, but their labour systems sit at opposite ends of the regulatory spectrum. One is deeply rooted in employee protections and collective rights; the other prioritises flexibility and employer discretion. If you don’t adapt accordingly, you could be exposed to serious compliance risks.

Quick Tips

• Czech employees are entitled to a minimum of four weeks’ paid holiday per year - this is not optional.

• At-will employment does not exist in the Czech Republic - termination must be justified and often involves notice periods or severance.

• US employment policies can vary by state - check both federal and local rules.

• Collective bargaining and unions are more embedded in Czech HR processes.

• Czech employment contracts must be in writing and outline core terms like role, location, and start date.

Contracts and Termination: Structure vs Flexibility

In the Czech Republic, the Labour Code governs employment relationships closely. Contracts must be formal, signed before work begins, and include specifics like job title, location, working hours, and pay. Termination is tightly controlled. Unless an employee is on probation, dismissals must fall under defined reasons (e.g. redundancy or misconduct), and notice periods typically apply. Severance is also common, with statutory minimums depending on tenure.

In contrast, US employment relationships are often governed by "at-will" rules - meaning an employee can be terminated at any time, for any reason (as long as it's not discriminatory or retaliatory), and vice versa. That said, states like California, New York, or Massachusetts have stricter rules, and contracts or handbooks can override default provisions.

Working Time and Leave: A Cultural Divide

The Czech Republic has some of the strongest employee protections in the EU. Standard working time is capped at 40 hours per week, with strict overtime limits. All employees are entitled to four weeks of paid holiday - many receive five. Paid sick leave, parental leave, and public holidays are also enshrined in law.

Meanwhile, the US does not guarantee paid leave at the federal level. Most leave policies are employer-determined, though the Family and Medical Leave Act (FMLA) provides up to 12 weeks of unpaid leave for qualifying reasons. Paid time off (PTO) is often rolled into flexible company schemes but varies greatly by sector and seniority.

From an HR standpoint, businesses in the Czech Republic must plan for higher fixed people costs due to leave entitlements and benefits. In the US, offering competitive PTO can help attract talent but is not mandated in the same way.

Employee Rights and Representation: Navigating Compliance Expectations

Employers in the Czech Republic should be prepared for strong worker protections and potential union engagement. Works councils are common in larger companies and must be consulted on major employment decisions, including redundancies or changes in policies. Collective agreements can set industry standards above statutory minimums.

In the US, union membership is lower (about 10% of workers as of 2023), and there is no national mandate for works councils. However, employers must still comply with anti-discrimination laws, wage laws (including FLSA), and health and safety standards (OSHA). Misclassification of employees as contractors remains a key risk area - particularly in tech, gig work, and remote teams.

A Real Example: Tailoring People Practices Across Borders

One ThinkGlobal HR client was operating in both the US and Czech Republic with a single set of global HR policies. Their US model relied on flexible contracts, informal PTO, and no structured consultation process. When applying this in Prague, they faced a regulatory backlash, and several employees raised concerns with a local inspectorate.

We worked with their internal HR and legal teams to localise contracts, introduce a works council where needed, and create dual policy tracks that respected local legal standards while maintaining company values. Not only did this avoid penalties, it improved employee retention and trust on both sides.

Final Thoughts

There is no one-size-fits-all when it comes to global employment law. The Czech Republic and the US illustrate just how widely employment norms can differ - and why blindly replicating policies from one country to another is never the answer. Success lies in building locally compliant frameworks that still feel aligned with your wider people strategy.

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 contracts, navigate country-specific rules, and build a people strategy that supports your global ambitions without exposing you to unnecessary risk.