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Managing a Global Workforce: Legal Compliance

Posted September 20, 2016 in Articles

If your business is preparing to expand overseas, among the many areas in which legal compliance needs to be a top priority is the area of human resources. Managing a large domestic workforce can be challenging enough; but, when your company goes global, this presents a whole new dimension of legal complexity.

Managing legal compliance for a global workforce involves much more than simply applying your company’s domestic policies overseas. Employment and labor laws vary widely from one country to the next, and understanding not only the text of the law, but how it is interpreted locally, is just the first step toward effectively managing global compliance. As a separate but related (and in many respects equally-important) matter, local customs and cultural differences can weigh heavily in the process of developing overseas corporate policies and procedures as well.

Examples of Cross-Border Differences Affecting HR Legal Compliance

The following are just some of the ways in which employment and labor laws around the world depart (in many cases significantly) from what employers have come to expect in the United States:

  • At-Will Employment. At-will employment is an almost-uniquely U.S. concept. Many countries have rejected at-will employment entirely, and most countries offer employees significant protections that will be foreign to managers and executives of U.S.-based enterprises.
  • Hour Restrictions. Outside of the United States, it is common for national laws to limit the number of hours employees can be asked to work on a daily or weekly basis.
  • Layoff Restrictions. Many countries require advance notice of layoffs (extending well beyond the protections provided in the U.S. WARN Act), and in some jurisdictions severance payments are mandatory. Many countries even have termination notice requirements that apply to contract employees.
  • Anti-Discrimination Laws. Employment-based discrimination, on the other hand, is one area in which the U.S. provides greater protections than a significant number of countries around the world. But, just because a country’s laws, or culture, may be less inclusive, does this mean that it is in your company’s best interests to treat some employees differently than others? This is a difficult question that requires careful consideration.
  • Finally, in many countries, union representation is much more prevalent than it is in the United States. Unions in other countries often have significantly more protection and negotiation leverage as well.

Building a Strong Global Workforce

Of course, concurrently with addressing the legal implications of building a global workforce, you should also be actively looking for the right professionals, managers and executives to help your new overseas facility run smoothly and be productive from day one. These individuals should not only be capable of managing your company’s business, but (as in the U.S.) they should be cognizant of the employment and labor laws that apply in the jurisdiction. This will typically require training from consultants who have in-depth knowledge of the local landscape.

For more information about assembling a global workforce, we encourage you to read our previous insight, Considerations for Hiring Overseas.

Global Workforce Development with Mithras Investments

At Mithras Investments, we provide comprehensive advisory, consulting and placement services for companies with operations in the United States and abroad. For more information about what we can do to help, please call (305) 517-7911 or contact us online today.

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