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Special thanks to our articling student Brianna Grieff for contributing to this update.

As pay transparency obligations continue to expand globally, employers with operations in Canada should be paying close attention to a rapidly evolving provincial landscape. Much like developments across the European Union, the United Kingdom, and numerous US states, Canadian jurisdictions are increasingly adopting measures designed to promote pay equity and greater transparency in compensation practices. These measures include salary disclosure requirements in job postings, restrictions on salary history inquiries, employee protections related to pay discussions, and, in some jurisdictions, pay transparency reporting obligations.

For US-based multinational employers, Canada presents both familiar challenges and unique compliance considerations. While Canada does not yet have a single nationwide pay transparency framework, a growing number of provinces have enacted or proposed legislation that requires employers to revisit recruiting practices, compensation governance, pay equity analyses, and data collection processes. As a result, organizations operating across multiple Canadian jurisdictions may find themselves managing another layer of regulatory complexity alongside existing US, EU, and UK transparency requirements.

The trend is gaining momentum. Recent developments in New Brunswick, together with existing requirements in British Columbia, Prince Edward Island, Ontario, and other provinces, reflect a growing expectation that employers provide greater visibility into compensation practices and be prepared to explain and defend pay differentials.

Below, we summarize the current pay transparency landscape across Canada and the key considerations for employers with Canadian workforces.

New Brunswick: The Latest Province to Act

New Brunswick recently joined the growing list of provinces imposing pay transparency requirements.

Continue Reading Canada’s Pay Transparency Momentum Continues: New Brunswick Signals the Direction of Travel
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Employment law developments across Asia Pacific continue at a rapid pace, with regulators expanding their enforcement powers, unions gaining influence, employees becoming more willing to challenge workplace decisions, and governments introducing significant reforms affecting workforce management.

Our latest AP Employers’ Forum 2026 Highlights and Insights report provides practical guidance on key developments across Australia, China, Hong Kong, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

The report highlights several trends that should be on every multinational employer’s radar. Among them are South Korea’s far-reaching “Yellow Envelope Act,” which broadens union rights and may significantly affect restructuring and workforce reduction strategies; Australia’s proposed restrictions on non-compete clauses and increased scrutiny of AI-driven employment decisions; Singapore’s forthcoming Workplace Fairness Act; Taiwan’s new workplace bullying regime; and growing regulatory inspection and dawn raid activity across the region.

The report also examines the increasing complexity of cross-border non-compete enforcement, rising claims relating to equity incentive plans, and the challenges employers face when navigating restructurings in an environment marked by geopolitical uncertainty, union activism and rapid technological change.

Click here for more!

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On August 6, 2026, the IRS released Fact Sheet FS-2026-13, substantially revising and replacing FS-2026-01, its January 2026 guidance on the new deduction for qualified overtime compensation enacted by the One Big Beautiful Bill Act (OBBBA). The revised guidance reflects the transition from the temporary 2025 reporting relief period to a more formal compliance regime applicable for tax years 2026 through 2028.  As a reminder, the IRS provided transition penalty relief for tax year 2025 to excuse the requirement that employers and other payers report qualified overtime compensation separately on Forms W-2, 1099-NEC, and 1099-MISC. See Notice 2025-62.

While the updated fact sheet includes numerous technical revisions, several changes are particularly significant for employers, payroll providers, and employees seeking to claim the deduction. Most notably, the IRS emphasizes that beginning in 2026 employees generally may claim the deduction only based on amounts separately reported by employers, increasing the importance of accurate overtime calculations and information reporting.

Key Changes in FS-2026-13

The August update to the FAQs:

  • Removes guidance applicable solely to the 2025 transition year.
  • Clarifies deduction limitations and timing rules, including that the same principles governing when a payment is treated as wages for income tax withholding purposes apply to determine when qualified overtime compensation is paid.
  • Expands guidance regarding Fair Labor Standards Act (FLSA) coverage and exemptions.
  • Provides detailed Form W-2, Form 1099-NEC, and Form 1099-MISC reporting rules.
  • Adds federal income tax withholding guidance.
  • Clarifies the requirement that qualified overtime compensation be separately reported to support the deduction.
Continue Reading IRS Updates FAQs on the Qualified Overtime Compensation Deduction: Compliance Obligations for Employers
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The Department of Labor (DOL) issued Technical Release 2026‑02 on June 17, 2026, providing critical clarity for employers evaluating whether to offer contributions to “Trump Accounts” under IRC sections 530A and 128; contributions to Trump accounts could be made as of July 4, 2026. The guidance addresses a key open question flagged in our earlier post regarding whether these arrangements would trigger Employee Retirement Income Security Act (ERISA) plan status, which would implicate technical rules regarding fiduciary duties, claims and appeal procedures, and plan reporting and disclosures, among others.

The DOL concluded that Trump Accounts and related employer Trump Account Contribution Programs (TACPs) will generally not constitute “employee pension benefit plans” under ERISA Title I, even if funded in whole or in part by employer contributions pursuant to IRC section 128. The guidance provides favorable clarity and removes a potential stumbling block for employers considering establishing a TACP.

DOL Technical Release 2026-02

Prior to Technical Release 2026‑02, ERISA classification was a key unresolved risk for employers, particularly given that TACPs require a written employer program and could resemble benefit plans.

DOL’s conclusion that TACPs will generally not be subject to ERISA removes a major barrier for employers. The rationale underlying the guidance includes that Trump Accounts are individually owned Individual Retirement Accounts (IRAs), not employer‑established retirement plans; that in most cases, benefits accrue to a child (dependent), not the employee, which weighs against ERISA plan characterization; and that the accounts can be funded by multiple sources (family, government, employers), reinforcing their non‑employer‑centric design.

Continue Reading DOL Clarifies ERISA Treatment of Trump Accounts: What Employers Need to Know
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Compared to many other countries, Germany has rather strict labor and employment laws. The current government has just announced plans to make employment law more flexible through comprehensive changes. Among other things, these plans include:

  • Allowing fixed-term employment contracts more frequently and for longer periods
  • Enabling employers to terminate the employment of “high earners” in exchange for a severance payment, even without a specific reason
  • Tightening the requirements for employees to take sick leave
  • Making it easier to implement and update software in companies with a works council.

Against this background, employers should already assess how they can best benefit from the new regulations, for example with regard to employment contracts and proceedings in case of terminations. However, it should be noted that the plans still need to be approved by parliament and implemented into law. Changes to the plans are therefore possible.

Key takeaways

  • For employees hired until December 31, 2030, it is planned that fixed-term employment contracts without objective grounds will be permitted for a maximum duration of up to four years and may be extended up to six times. This would provide additional flexibility for employers and is particularly helpful for companies that rely on such flexibility, such as start-ups.
  • For high earners, it is planned to introduce a regulation effective January 1, 2027 that allows termination of the employment relationship in exchange for a severance payment. Even if a court does not consider the termination to be socially justified, this instrument would still allow the employment relationship to be terminated. This creates a promising tool in termination proceedings involving employees with high income.
  • Other planned changes, such as stricter rules for employees taking sick leave, tax advantages for severance payments also appear attractive for businesses in Germany.
  • Even though the resolutions of the coalition committee must still be approved by parliament, the plans are already quite tangible. The likelihood of approval is increased given that the proposals are the result of negotiations between the coalition parties.

In more detail

More flexibility for fixed-term contracts:

  • For employees hired until December 31, 2030, it is planned that fixed-term employment contracts without objective grounds will be permitted for a maximum duration of up to four years – rather than the previous two years – and may be extended up to six times, instead of the previous limit of three extensions. In this context, it will also be possible to rehire an employee by the same employer for the first time.
Continue Reading Planned Significant Changes to German Employment Law
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Baker McKenzie’s legal resource for companies taking business models, products and technology international.

Are you considering expanding into new jurisdictions? Are you aware which foreign laws and legal issues matter most? Have you prepared a detailed statement of facts, plans and questions for counsel?

The latest edition of our Field Guide to Going Global helps you examine foreign law issues for taking business models, products and technology international. Our guidance should be helpful whether you are working for a start-up company or a large multinational enterprise that is broaching new frontiers.

The Guide covers export control and sanctions considerations, intellectual property rules, data privacy and cybersecurity frameworks, franchise and competition law, employment and global equity regulations, tax compliance and planning issues, corporate development matters and more.

Click here to access the guide.

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The EU Pay Transparency Directive’s transposition deadline—June 7, 2026—has passed. As of the June 7 deadline, only a handful of Member States—notably Slovakia, Italy and Lithuania—have fully or largely implemented the Directive, with most others still working through draft legislation or delayed timelines.

Most member states are behind, resulting in uneven implementation across the bloc and leaving employers to navigate a fragmented and evolving landscape with staggered national rollouts and divergent approaches across jurisdictions. Here’s what US-based multinationals need to know now.

The Practical Outlook for Multinational Employers

For US companies managing EU workforces, the next 12–24 months will look like:

Patchwork Implementation

  • Countries will finalize laws on different timelines
  • Some will gold-plate requirements (e.g., broader scope, stricter remedies)
  • Others may take a more minimalist approach

Rolling Compliance Programs

  • Employers will need to sequence implementation by jurisdiction
  • Internal frameworks must be modular and adaptable, not one-size-fits-all

Heightened Litigation & Enforcement Risk

Even before full implementation, expect:

  • Increased employee claims and works council pressure
  • Greater scrutiny of pay equity and transparency practices
  • Use of existing laws (e.g., equal pay frameworks) alongside emerging rules

Reminder of the Directive’s Core Requirements

The Directive introduces a consistent set of core obligations across the employment lifecycle, centered on greater transparency, more rigorous pay monitoring, and enhanced enforcement risk—though the detail and delivery will vary by country.

Continue Reading EU Pay Transparency Directive: Deadlines Missed, But the Real Work Starts Now
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We are pleased to share with you The Global Employer – Global Immigration & Mobility Quarterly Update, a collection of key updates from Australia, South Africa, Thailand, and the United States.

Click here to view.

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In our recent post, AI Regulation on Hold in Colorado—But Employer Risk Isn’t, we flagged that delay did not mean diminished risk. That continues to hold true. Colorado has now approved a comprehensive rewrite of its AI law, while Illinois regulators are advancing practical disclosure requirements for employers using AI in employment decisions.

The direction is clear: AI oversight in the workplace is moving forward—and becoming more operational.

Colorado: Recalibration, Not Retreat

Colorado’s rewrite reflects an effort to make its AI framework more workable—but not less relevant for employers.

Key points:

  • Employment uses remain in scope: AI tools used in hiring, promotion, and other employment decisions continue to be treated as “high risk.”
  • Governance expectations remain: Employers will still need risk management and oversight frameworks.
  • Transparency still matters: Notice and documentation obligations continue, even as details evolve.
Continue Reading Colorado and Illinois Advance AI Transparency Obligations for Employers
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Some historically more employer-friendly APAC jurisdictions are becoming harder to manage as employee protections expand and procedural requirements tighten. In 2026, the region is broadly politically stable, but economic caution, recent elections, and pro-labor legislative agendas are reshaping employment risk in different ways across key jurisdictions. China is emphasizing employment stability and risk containment; South Korea and Australia are advancing employee-friendly labor agendas; and Japan, Singapore, and Vietnam remain relatively stable politically but are seeing increasingly sophisticated employment regulation. For in-house teams, the core risk is not missing a headline reform, but underestimating how process, consultation, and documentation increasingly determine outcomes.

Below are the developments global employers should have firmly on their radar.

1. Workforce Flexibility Is Narrowing—and Execution Risk Is Rising

Across APAC, worker misclassification and restructuring execution have become standout employment risks. In many markets, the primary exposure is no longer just whether an employer has a legal basis to act, but whether it can show the relationship was properly classified and that any termination, redundancy, or outsourcing decision was implemented through a defensible process.

  • South Korea combines aggressive labor reform with real enforcement risk. Unlawful contracting arrangements and illegal dispatch (e.g., subcontracted workers) have long carried criminal liability under Korean law. The Yellow Envelope Act now allows even lawfully subcontracted workers to unionize and bargain directly with client companies. The new administration has also pledged to close even lawful outsourcing loopholes, raising the stakes for businesses that rely on layered service or contractor models.
  • Australia continues moving toward an employee-protective model. Recent reforms driven by legislation and case law have refocused classification analysis on the real substance of the relationship, while courts and regulators are increasingly attentive to consultation, redeployment, and safety in workforce change exercises.
  • China, Japan, and Vietnam each create execution risk, but in different ways. China and Vietnam apply substance-over-form tests that increase recharacterization risk for outsourcing and contractor models. Japan and China are particularly restrictive on termination, requiring clear legal grounds and close procedural compliance. Vietnam does not recognize at-will employment, so even commercially justified exits require careful implementation.
Continue Reading Asia Pacific in Focus: 2026 Employment Law Shifts Global Employers Can’t Ignore