Legal Checklist for Expanding Business to the U.S: Employment Law Crash Course

The FACC-NY network is composed of a diverse mosaic of talented, experienced, and open-hearted professionals united by a desire to share their knowledge, nurture meaningful connections, and succeed professionally. In this #MemberInsights blog, we invite a guest member to contribute timely and relevant tips and insight for adapting your activities to overcome immediate challenges and plan for the long-term. 

By FACC-NY Member Stephanie Messas

Stephanie is Partner of The Messas Law Practice and helps foreign companies develop and thrive in the U.S. by creating corporate structures and identifying diverse legal issues related to corporate governance, intellectual property, and employment.

This is Stephanie's second article as part of her Legal Checklist for Expanding to the U.S series to help our members gain legal insight for successfully expanding their businesses to the U.S. 

3. WHAT YOU NEED TO KNOW ABOUT EMPLOYMENT LAW IN 5 MINUTES

• The at-will US legal concept.

The US is much less regulated in terms of employment relationships than Europe but that does not mean employers can act however they please.  Instead, businesses must be familiar with federal, state, and local laws where their employees are working.American labor laws do not require an explicit contract of employment. Most employment is on an at-will basis, meaning that the employer or the employee can terminate the working relationship at any time, as long as the reasons are lawful. But again, if you listened to Parts 1 and 2 of this Series, you now know that no contract leaves the employer drowning in a sea of ambiguity and devoid of any legal protection.

• The necessary employment documents.

Have an employment contract with your employees and independent contractors (in some states, freelance contracts are mandatory). Such an agreement allows the business to itemize the terms and conditions of employment or relationship, outline the employee or contractor's responsibilities, and highlight relevant laws destined to shield the company from liability and minimize the company’s risks.  When the business starts to have several employees, the company should also have a solid employee handbook that is implemented consistently and updated regularly.   The handbook acts as a critical reference point that contains the business's operating procedures, important policies, and serves to protect the rights of employers and employees alike. 

• Know your industry’s practices.

I often get asked about salaries, benefits, and other standard contractual terms.  While employers’ must obviously pay their state and local minimum wages, businesses should pay a salary that is commensurate with industry practices and titles.  Similarly, most states do not require employers to provide employees with vacation benefits, but if a business wants to attract and retain quality employees, such benefits should be similar to the US practices in the same industry if not better.  Once a benefit has been contractually agreed to, it must be provided.  The bottom line is businesses must investigate the US market and not implement the same practices as their European counterparts.

Stay tuned for the next article release as part of this series for your questions answered on protecting your IP.

Interested in connecting with Stephanie and expanding upon these questions? Log into the FACC Member Directory to send her a message.