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International hiring is increasingly common because it’s a great way to source talented people and expand your operations.

However, hiring internationally requires adhering to international employment laws and standards of individual countries and international bodies like the International Labour Organization (ILO).

Use this guide to help you understand what these are and how to remain compliant with them.

What Are International Employment Laws?

International employment laws encompass a wide array of regulations and agreements that govern labor practices across different countries. These laws aim to protect workers' rights, ensure fair treatment, and promote decent working conditions globally.

Globally, the ILO helps set labor standards across 187 member states, aiming to bring together workers, employers, and governments to promote social justice and decent working conditions. 

Member nations agree to the organization’s conventions and are required to incorporate them into their national laws.

Within this broad international framework, the ILO addresses employment issues in detail. Their key policy goals include:

  • Elimination of child labor
  • Prohibition of forced or compulsory labor
  • Prevention of workplace discrimination
  • Protection of the right to collective bargaining, including union membership.

On a regional level, treaties like the EU labor law and North American Agreement on Labor Cooperation aim to promote social progress and improve the living and working conditions of the people in those territories.

Why Is Following International Employment Laws Important?

Following international employment laws is crucial for several reasons, each contributing to the well-being of individuals, businesses, and society as a whole. Here are the key reasons:

Non-compliance with international employment laws can result in significant consequences, including:

  • Fines and sanctions: Governments and international bodies can impose hefty fines on companies that violate labor laws.
  • Legal disputes: Non-compliance can lead to costly legal battles and compensation claims.
  • Operational disruptions: Penalties and sanctions can disrupt business operations and damage a company's financial stability.

As Wendy Mankinson, HR Manager at Joloda Hydroroll, highlights, “As a business that makes payments to over 35 countries, we have to make sure we are on top of local rules when it comes to data, tax, labor laws, and security. Although rules don’t change very often, we don’t want to be doing anything incorrectly or illegally and so have to set aside time to regularly check regulations and that we are compliant.”

Global payroll solutions like Deel and Papaya Global can help here since their services, and those of many other global payroll providers, are constantly monitored by HR experts in international compliance issues.

2. Enhancing business reputation

Companies that comply with international employment laws often enjoy a better reputation. This can lead to:

  • Increased consumer trust: Customers are more likely to support businesses that treat their employees fairly.
  • Better relationships: Compliance with international employment laws promotes better relations between countries and organizations. 
  • Attracting talent: Skilled workers are more likely to seek employment with companies known for their ethical practices.
  • Building investor confidence: Investors prefer companies with strong labor practices as they are seen as more sustainable and less likely to face legal and social issues.

3. Global supply chain integrity

For multinational companies, ensuring that all parts of their supply chain adhere to international employment laws is crucial. This includes:

  • Preventing exploitative practices: Ensuring that suppliers and contractors also comply with labor standards to prevent exploitation. This is particularly important in developing countries like China, India, and Turkey.
  • Maintaining consistency: Upholding the same labor standards across all countries of operation to maintain a consistent brand image.

On the flip side, organizations that fail to comply face reputational damage that will make it harder to operate in new territories and impact consumer sentiment.

4. Protection of workers' rights

International employment laws safeguard the fundamental rights of workers, ensuring they’re treated safely and with dignity. This includes:

  • Fair wages: Ensuring workers are paid fairly for their labor.
  • Safe working conditions: Protecting workers from hazardous environments and ensuring their health and safety.
  • Non-discrimination: Promoting equal opportunities and preventing discrimination based on race, gender, religion, or other factors.

5. Social justice and ethical responsibility

Global HR compliance with international employment laws aligns with broader goals of social justice and corporate social responsibility. This involves:

  • Promoting human rights: Ensuring that all workers, regardless of their nationality, enjoy basic human rights.
  • Supporting global initiatives: Contributing to global efforts to eliminate poverty and improve living standards through fair employment practices.

Common Areas Of Difference

Employment laws between countries generally differ in the following areas:

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1. Working hours and overtime

  • Standard workweek: The length of the standard workweek can vary. For example, in France, the standard workweek is 35 hours, while in Japan it is typically 40 hours. The Netherlands comes in at 31.5—nice!
  • Overtime regulations: The rules for overtime pay and the rates at which it is compensated differ. Some countries have strict overtime pay requirements, while others have more flexible rules. Overtime in Spain, for example, is generally limited to 80 hours per year whereas Singapore imposes no limits.

2. Minimum wage

  • Amount and adjustment: The minimum wage varies widely between countries (and within them), often adjusted periodically to reflect inflation and cost of living. For instance, the minimum wage in Geneva, Switzerland is higher than in many other countries.

3. Paid leave

  • Annual leave: The number of days of paid annual leave can vary significantly. For instance, employees in EU countries like Portugal and Italy are entitled to at least four weeks of paid vacation, while the United States does not have a federal requirement for paid vacation.
  • Public holidays: The number and recognition of public holidays differ. Some countries, like India, have numerous public holidays, while others, like the United States, have fewer.

4. Maternity and paternity leave

  • Duration and pay: The length and compensation for maternity and paternity leave varied greatly. In Sweden, parents are entitled to a whopping 480 days of paid parental leave, while in the United States there is no federal mandate for paid parental leave.
  • Job protection: Some countries guarantee job protection during and after maternity leave while others have less stringent protections.

5. Employment contracts

  • Contract requirements: The form and content of employment contracts can differ. In some countries, written contracts are mandatory while in others verbal agreements may be legally binding.
  • Probation periods: The duration and conditions of probation periods can vary. For example, probation periods in Germany can last up to six months, whereas in the UK, they are typically three months.

6. Social Security and benefits

  • Contributions and coverage: The structure and level of social security contributions required from employers and employees differ. In some countries like Denmark, social security is heavily funded through general taxation, while in others, like the United States, it is funded through specific payroll taxes.
  • Types of benefits: The range of benefits provided, such as healthcare, unemployment insurance, and pensions, can vary.

7. Termination and severance

  • Notice periods: Similar to the WARN Act in the United States, there are laws in most countries that require a notice period for terminating an employment contract. In Japan, it is usually 30 days, while in Canada, it can be as short as one week or as long as eight weeks, depending on the length of employment.
  • Reasons for termination: The laws around reasons for termination also vary. For example, most US states follow the "at-will" employment doctrine, meaning that employers can terminate employees for any reason or no reason, as long as it isn't illegal (e.g., discrimination or retaliation). In many EU countries, however, "just cause" is required for termination, and employees cannot be fired arbitrarily.
  • Severance pay: The amount and conditions for severance pay differ. Some countries mandate severance pay based on years of service, while others do not require it at all.

8. Health and safety regulations

  • Standards and enforcement: The rigor of health and safety regulations and their enforcement can differ. Countries like Germany have strict health and safety standards and robust enforcement mechanisms, while others may have less comprehensive regulations.
  • Employer responsibilities: The specific obligations of employers to provide a safe working environment can vary.

9. Discrimination and equal opportunity

  • Protected characteristics: The characteristics protected from discrimination, such as race, gender, age, disability, and sexual orientation, can differ. For example, the UK has comprehensive anti-discrimination laws covering various protected characteristics, while other countries may have more limited protections.
  • Enforcement mechanisms: The effectiveness and accessibility of mechanisms to enforce anti-discrimination laws can vary.

10. Collective bargaining and trade unions

  • Unionization rates: The prevalence and power of trade unions differ. In countries like Sweden and Finland, unionization rates are high, whereas in the United States, they are much lower.
  • Bargaining rights: The rights and processes for collective bargaining can vary, influencing how labor disputes are resolved and how wages and working conditions are negotiated.

11. Payroll and tax compliance

  • Payroll taxes: These obligations vary widely across countries, with employers typically responsible for withholding and submitting income taxes and social security contributions for employees while independent contractors are generally responsible for handling their own taxes.

12. Remote working

  • Employer obligations: In some countries like Colombia, employers must provide necessary tools and equipment, ensure occupational health and safety standards, and allow flexibility for remote workers to balance work and personal life.
  • Right to disconnect: Laws such as Australia's ‘right to disconnect’ awards workers the right to refuse to respond to work-related contact outside of work hours, unless their refusal is unreasonable.

How To Stay Compliant With International Employment Laws

Whichever country you’re operating in, here are some best practices to help you remain compliant with their employment laws.

1. Stay informed and updated

  • Regularly review laws: Stay in the loop with changes in labor laws by subscribing to legal updates and newsletters or joining relevant professional associations.
  • Consult legal experts: Work with local labor law experts or legal counsel to stay informed about specific requirements and changes.

2. Develop comprehensive policies

  • Employee handbook: Create a detailed employee handbook that clearly outlines company policies, procedures, and compliance with local labor laws.
  • Clear employment contracts: Ensure all employment contracts are clear, detailed, and compliant with local laws, including terms of employment, salary, benefits, and termination conditions.

3. Conduct regular training

  • Management training: Train managers and supervisors on local labor laws and their responsibilities to ensure compliance.
  • Employee training: Provide employees with training on their rights and responsibilities under local labor laws.

4. Use technology

  • Utilise payroll software: Payroll software can help you remain compliant with local payroll taxes because vendors will ensure they’re up to date and any deductions and reports will be automatically applied and submitted.
  • Compliance software: ​​Compliance software helps businesses adhere to legal, regulatory, and policy requirements. Tools like Oyster HR help with monitoring regulatory changes, assessing risks, securing sensitive data, maintaining detailed audit trails, and generating compliance reports.

5. Use an intermediary

  • Use an employer of record: Especially when hiring a small number of people, it might be better to hire them using an employer of record service. Essentially these act as legal employers and ensure adherence to local laws and regulations.

6. Implement robust record-keeping practices

  • Accurate records: Maintain accurate records of working hours, wages, employee benefits, leave, and other employment-related matters.
  • Documentation: Keep detailed records of employment contracts, performance reviews, disciplinary actions, and terminations.

7. Conduct regular audits and assessments

  • Compliance audits: Perform regular internal audits to ensure all practices and policies comply with local labor laws.
  • Third-party assessments: Consider hiring external auditors or consultants to review compliance and provide recommendations.
  • Cultural sensitivity: Be aware of and respect local cultural norms and practices that may influence labor laws and workplace behavior.
  • Localization: Adapt global policies to fit local legal requirements and cultural contexts.

9. Detailed employee contracts outlining termination procedures

  • Detail specifics: By detailing specific terms, including notice periods, severance, and grounds for dismissal, you can align with varying legal requirements across jurisdictions, reducing the risk of disputes and penalties.

Global Employment Platforms

Here are some practical solutions that can help businesses navigate international employment laws, manage payroll, and provide benefits compliantly across borders.

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Please note the advice in this article is general advice and that legal counsel should be considered before taking any actions.e and expertise to help you grow in your career and make greater impact in your org.

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Finn Bartram

Finn is an editor at People Managing People. He's passionate about growing organizations where people are empowered to continuously improve and genuinely enjoy coming to work. If not at his desk, you can find him playing sports or enjoying the great outdoors.