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Probation period
in USA.

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Probation Period in USA – Overview

Employees in USA must complete a probation period when they begin employment. During their probationary periods, employees are not entitled to the same rights and benefits that an employee who has passed their probation period would be.

What is a Probation Period in the USA?

Probationary periods are common practice in US employment relationships. While not directly mandated by a specific federal law, they fall under the broader framework of employment contracts and the concept of at-will employment.” This means that, in most states, employers and employees can typically terminate the relationship at any time, with or without cause (with exceptions like discrimination laws still applying).

This is a designated period at the start of employment where both the employer and employee assess whether the job is a good fit. Employers evaluate the new hire’s performance, skills, and overall suitability for the company. Employees use this time to decide if the company culture and job duties align with their career goals.

What is the Standard Probationary Period in USA?​​

A 90-day probationary period is the standard practice in the United States. Probationary periods can be shorter or longer, at the discretion of the employer. With many employment agreements being considered ‘at will’, many US employers have no need to use probationary periods when assessing the suitability of new hires. 

Video: Do You Need Probation Period?

US Employment Contracts and Probation Periods

Probationary periods should be clearly detailed within an employment contract. This contract outlines the period’s length, expected performance standards, and procedures for evaluation.

However, there are different types of employment contracts that can be used:

  1. At-Will Employment: The most common type, allowing for termination by either party with or without cause.
  2. Fixed-Term Contracts: Specify a definite start and end date for the employment period.
  3. Part-time or Full-time Contracts: Define the expected working hours.

Explicitly outlining the probationary period within the employment contract, regardless of the contract type, provides clarity for both parties.

Unique Probationary Period Regulations in Montana

Montana stands out with employment laws distinct from the at-will standard common in most US states. 

Unless otherwise specified, a new hire in Montana automatically has a 12-month probation period (Mont. Code Ann. § 39-2-910). Effective last year, October 1, 2023, Montana adopted a new rule where employers can terminate employees at will during the first 12 months of employment unless a different period is stipulated in the contract. 

However employers in Montana must have “good cause” to terminate an employee within their probationary period (Mont. Code Ann. §§ 39-2-904, 39-2-905). This means they need a justifiable reason and supporting documentation for the termination. 

Legal Rights of Probationary Employees in the United States

Even during a probationary period, employees are protected by fundamental workplace laws in the US. These rights include:

  • Protection from Discrimination: Federal and state laws prohibit discrimination based on race, gender, religion, age (over 40), disability, national origin, and other protected characteristics. This applies during the probationary period as well.
  • Protection from Harassment: Employers are obligated to maintain a workplace free from harassment, regardless of an employee’s probationary status.
  • Wage and Hour Rights: Probationary employees are entitled to minimum wage and overtime pay (if applicable) according to the Fair Labor Standards Act (FLSA).
  • Safety and Health: The Occupational Safety and Health Act (OSHA) mandates that employers provide a safe and healthy workplace for all employees, including those on probation.

Legal Obligations of US Employers

It’s crucial for all employers to have a solid grasp of the laws that dictate their responsibilities. Let’s break down some of the important areas:

Anti-Discrimination

Discrimination in the workplace is illegal. It’s essential to understand protected categories and ensure your hiring, promotion, and termination practices are free from bias.

Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, and the Age Discrimination in Employment Act are foundational to this area.

Be aware that various other federal laws, or even more stringent state laws, might expand the protections against discrimination based on pregnancy, genetic information, military status, and other factors.

Wage and Hour Laws

The Fair Labor Standards Act is the cornerstone on minimum wage, overtime, and child labor rules. Some states have even stricter requirements, so stay informed!

Payroll mistakes can be costly. Make sure you have accurate systems for timekeeping and wage calculations.

Workplace Safety

The Occupational Safety and Health Act requires employers to provide a hazard-free workplace. This involves identifying potential risks, training employees, and maintaining safety protocols.  

Don’t just meet minimum standards, strive for a safety-conscious culture that protects your employees.

Family and Medical Leave

The Family and Medical Leave Act provides eligible employees unpaid leave for serious health conditions, caring for a new child, or certain military-related reasons.

Understand eligibility rules and how to manage leave requests while maintaining operations.

And There’s More…

Employers have numerous tax-related obligations to federal, state, and sometimes local tax agencies. Proper I-9 verification procedures are mandatory.

And providing coverage for work-related injuries or illnesses is required in most states.

Key Questions for Employers:

  • Do I have clear policies on anti-discrimination that are regularly communicated?
  • Are my managers trained on handling wage/overtime correctly?
  • Do we have a robust safety plan, not just on paper, but in practice?
  • How do we ensure compliance with all the other legal obligations?

Benefits of Probation Periods

While probationary periods are not mandatory in most of the US, they offer significant advantages for both employers and employees. For employers, these periods provide an opportunity to evaluate new hires’ skills and suitability within the actual work environment. This allows them to identify and address potential performance issues early on.

Employees also benefit from probationary periods. They gain a chance to assess whether the job and company culture align with their expectations. Additionally, this period offers a valuable opportunity to learn job duties, adapt to the company’s way of working, and demonstrate their potential.

Hiring in USA, Made Easy

Your business can easily hire employees in USA without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

FAQs

There is no legal basis in regards to giving notice during probationary periods in the United States. The procedures regarding notice and probationary periods are a matter of negotiation and should be included in the employment agreement between employer and employee.  

Unless otherwise stated in the employment agreement, US employees are not required to give notice before resigning during the probationary period. Employment in the United States is predominantly at will, meaning employers and employees are not required to give notice.

Yes. The probationary period can be extended, provided the employment agreement includes a probationary period clause that expressly states the right of the employer to extend the probationary period.

Yes. The employment agreement will define the terms of the employment agreements, including the terms of the probationary period. Generally, at will employment gives US employers the flexibility to dismiss employees at any time, including during the probationary period. 

It will depend on the terms of the employment agreement. Many employers opt to include a notice clause in the employment agreements they form with their employees.

Employment in the United States is predominantly at will, meaning employers are not required to give notice when terminating an employment contract. At will means that an employer can terminate an employee at any time for any reason, except an illegal one, or for no reason without incurring legal liability.

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