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US vs. European wages and working hours

Conducting Transatlantic Business
This article is based on the free ebook "Conducting Transatlantic Business"

There are different things to consider when you decide in which country you want to work or where you want to start a business. Will it be in the US or rather in a European country? By taking a look at two essential factors regarding making this decision and the differences between both continents, you can get an idea of which working conditions suit you best – in particular when it comes to working hours and minimum wages. Let’s take a look.

 

Working hours in the US

In the USA the federal work week standard is 40 hours, but in practice it is sometimes considered part-time. Yet in many states working more than a certain number of hours brings overtime pay into play. Practical standards vary widely. In California every minute after the 8th hour in any given day is subject to overtime pay. In New York overtime begins after the 40th hour worked in a week. Consequently, New York employees may work four 10-hour days and not be paid overtime, whereas in California this results in eight hours regular pay plus two hours overtime for each of the four days. Overtime in the USA is calculated as ‘time and a half’, or 1.5 times normal wages (plus 50%).

 

Working hours in Europe

In Europe the situation is even more muddled than in the US. Famously, the French work week is 35 hours, with limitations on overtime. To show that this is not a typical European phenomenon the Swiss workweek is 45 hours in the services, industrial and retail industries and 50 hours elsewhere. But the difference is not only the standard work week. Notably overtime pay and resting time are subject to different numbers.

In Austria the official work week is 40 hours although most employees work 38 to 39 hours. Weekday overtime pay is plus 50%, on Sundays and holidays plus 100%. Employees must take an 11-hour period between two work days. Germans work between 36 and 39 hours a week, capped at 48 hours including overtime. Overtime pay is to be paid a 25% premium, night work 10%. Belgium makes it even more complicated with a five-day, 38-hour workweek, meaning that not all working days are equally long. Further, it commands overtime pay of plus 50% on Sundays and plus 100% on holidays. Employees may not work more overtime than 11 hours per day, 50 hours per week and must take an 11-hour period between two work days.

 

Minimum wages in the US

American minimum wage is based on hourly earnings. Federal minimum wage is currently $7.25 per hour. Where federal law does not apply state minimum wages do. Most states adhere to the federal standard but among the ones that don’t the range is between $5.15, in Georgia and Wyoming, and $8.67 in Washington State. In some cities the rate approaches $10. A few Southern states do not have minimum wage requirements. Downward adjustments also apply.

 

Minimum wages in Europe

In Europe minimum wage is based on monthly earnings. Differences are substantially bigger than in the US. For instance, in the Euro zone the amounts range from €55 in Montenegro or €170 in neighboring Kosovo, to over €1.682 in Luxemburg. France’s official minimum wage is in practice exceeded by collective bargaining agreements. Not all European countries have a minimum wage, most notably Switzerland and the Scandinavian countries. In Germany most employees are covered by collective bargaining agreements, which set wages by industry. In practice the minimum hovers around above €1.400, or over €8 per hour. The German ‘mini-job’ program offers work at around €5 per hour.

 

If you want to learn more about working conditions and employer’s rights in the US and Europe, “Conducting Transatlantic Business – Basic Legal Distinctions in the US and Europe” written by August G. Minke is the right book for you.