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A new co-worker who is not a native English speaker uses "you people" whenever referring to a group. As in "This quarter was great because of you people." If something negative happened "You people did not finish X, Y, Z?"

Part of me says to say something 1:1 like "You people is an insult in America, you should use 'you all' or 'y'all'". Part of me also says to say nothing as I don't want to become a language coach.

Should I mention it, and how is the best way to phrase this?

For those outside the US, the exact words "you people" have become an insult. See https://www.yourdictionary.com/you-people

NOTE: I am a native English speaker, and do not believe the co-worker means this as an insult.

EDIT IN RESPONSE TO COMMENTS:

To the average American English speaker, "you people" is perceived as an insult. I do not believe the speaker was racist, only unaware.

EDIT 2:

The phrase originated as a racist insult implying the speaker and receiver were part of different ethnic groups. It has since become an insult implying the receiver is an outsider from the speaker's desirable in-group.

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    Your link clearly says it's only an insult in the context of a speaker of one race addressing a group of another race. Was this the case when the non-native speaker addressed the team? And do you think anyone was actually insulted or are you just concerned that someone might be insulted. – HenryM Aug 18 at 19:50
  • For those that are not American, how is it racist? Sometimes understanding the underlying context can help avoid similar expressions. – Gregory Currie Aug 19 at 8:25
  • Racism is a subset of why "you people" can be the wrong phrase to use. Essentially it is creating a divide - the speaker and the person/group addressed are put in two separate camps. Obviously this can be used to further racist agendas but it can also be used, in a work setting, to throw blame around and isn't going to make the speaker as welcome in the office as they otherwise would be (even subconsciously). – Lio Elbammalf Aug 19 at 9:13
  • @LioElbammalf That may be true, but the OP wants the coworker to use "you all" which presumably has the same effect? – Gregory Currie Aug 19 at 9:52
  • When I first read this, I thought “‘you people’ isn’t an insult!” I clicked on your link and noticed the third definition - “Plural of you” for people from Maine, USA (like “y’alll or “you all” elsewhere). I grew up in Maine so it didn’t sound wrong to me. I add this as a humorous anecdote, but also to note that maybe not everyone is finding the phrase as insulting as you are. – SethMMorton Aug 20 at 13:32
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As a non native English speaker working in an English speaking company, I’d very much appreciate a comment (in private) when using phrases wrong or phrases that could have connotations that I haven’t anticipated.

It happened to me more than once and I’ve profusely thanked the people that told me about it.

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    +1 for the simple solution of just giving feedback. You're not being a language coach, you're just looking out for a colleague and helping them with something they are blind to. As a non-native speaker, I can also point out that is very common to use phrases or constructions that are directly translated from our mother languages and might have other connotations in English that we're not aware of. – Juliana Karasawa Souza Aug 19 at 7:44
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I think you may be making a mountain out of a molehill. "You people" is an insult when it's said to people of a particular race, gender, sexual orientation, etc. But if he uses it when referring to any group of people, it won't be perceived as an insult.

On the other hand, it's simply not an idiomatic way to refer to people in general. You're obviously perceiving it as an insult because when it is used, it's usually in those insulting contexts.

So I do think you could help him correct his language, but there's no need to bring up the racist undertones, which might make him feel worse than he needs to. Just let him know that what he's saying sounds weird to native speakers, and suggest more common phrases. But if this is an ingrained habit (maybe it's the literal translation of the usual phrase from his native language), he may have a hard time undoing it, and you should be understanding of his difficulty. Non-native speakers are going to make mistakes, you shouldn't hold it against them (maybe you should watch the Monty Python "Hungarian Phrasebook" sketch).

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You would not be a language coach, since this is not something trivial. This can damage the work environment and relationship between your group and this particular colleague. I think that the best thing to do would be to explain to him that you are worried that people might misinterpret what he says and take it in a negative way because of the phrasing.

"I have noticed you use the phrase "you people", which happens to have a negative undertone in USA. I know you mean well, but perhaps it could be beneficial to use "you guys" or just "you" instead."

I am not sure about "you guys" either, since USA is very gender sensitive, so perhaps "guys" part also can touch someone the wrong way.

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    Yeah, switching to you guys is not ok. Try just "you". If there's confusion about whether it's one person or multiple, "all of you." Or be specific: "this great development team." – Kate Gregory Aug 18 at 20:43
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    This is probably a bit too informal, but "you folks" is a gender neutral alternative to "you guys". (Though, arugably, "you guys" is more akin to the French les rather than "you males".) – Mateen Ulhaq Aug 19 at 3:04
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    I'm not a natvie speaker and I asked (I'm in New Zealand) if I can use "you guys" to address a mixed gender group of people. I was assured that this is a norm and totally acceptable. – Andrew Savinykh Aug 19 at 5:12
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    @AndrewSavinykh It varies by group, so you did the right thing and asked first. Some groups are OK with using "you guys" and some are not, so it is better to ask first – Juliana Karasawa Souza Aug 19 at 7:39
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    Try switch out 'you guys' for 'you all' – 520 Aug 19 at 9:35

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