At-Will Employment in the U.S. Explained

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The majority of U.S. states are “at-will states”. But, what does that mean?

 

In the U.S., employers and employees can maintain a working relationship for as long as it suits them. Both the employer and the employee can terminate the employment relationship, for any reason (except for illegal reasons, such as discrimination), or for no reason at all, without prior notice.

This represents a big contrast with Europe, where employment relationships are generally more regulated and often require a just cause for the termination or notice periods.

 

How can ‘at-will employment’ help your European business?

 

The major benefit is the flexibility. As an employer, you can easily adjust your workforce and develop your staff as you see fit, with limited legal pushback. There is also no obligation to give prior notice, although many employers still choose to do so as a courtesy.

In general, companies don’t need to prove “just cause” to let go of an employee. They simply need to avoid discrimination or illegal actions.

 

The cons for employers

 

At-will employment can be a double-edged sword. Yes, you can terminate the relationship with an employee with no just reason most of the time, but so can the employees.

Under these terms, employees are free to quit their jobs without advance notice. Although, just like employers do, employees also tend to give a 2-week notice as a courtesy.

Learn more about how to retain at-will employees here: https://yer-usa.com/at-will-employment-key-differences-between-the-u-s-and-europe/ 

 

Which states follow At-Will Employment?

All of them except for the State of Montana. Montana is the only state where an employer must have a valid reason to terminate an employee. Although the rest of the 49 U.S. States follow are ‘at-will states’, it is important to know that it doesn’t work the same way in all of them. Here are the exceptions:

  • Employment contract: in this case, the employment contract can include specific reasons why an employee can be terminated. In many cases, the employer and employee can negotiate the terms.
  • Implied Contract: this refers to an unwritten, yet legally binding, agreement between the employer and the employee. Implied contracts can modify the nature of at-will employment. Examples of implied contracts include employee handbooks, verbal assurances, and consistent practices with other employees when it comes to terminations.
  • Public policy: Employers are prohibited from firing employees for reasons that violate public policy. These vary from state to state and even between cities. One example is not being able to fire someone for taking time off to serve jury duty.
  • Covenant-of-good-faith: Some states require that the employee be terminated only in a fair and just manner, meaning the employee’s actions were done in good faith and not malice. This bans employers from making false statements, not disclosing the reason for termination, etc.

 

At-Will Employment Laws By State

 

 

Understanding at-will employment and all other aspects of labor compliance in the U.S. may sound intimidating. But remember, success in the U.S. market is not just reserved for a few. By learning about these policies, you are already taking the first steps!

When it comes to finding the right candidates, handling HR paperwork, staying compliant, and managing payroll—you can leave it to us. You focus on what you do best: growing your business.