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With the current focus on US multinational operations around the world and the pressure to meet globally acceptable and locally effective compliance, companies regularly turn to global employment policies as a tool to manage their local employment-related risks. Often the desire is to house these policies in a single “global” employment handbook. As efficient as it may seem to have a single employment handbook, a truly one-size-fits-all single, global handbook most often is not a realistic option. This paper discusses the potential problem with a single “global” handbook and outlines three approaches to get US multinationals to the same result while fully complying with local laws.

Click here to read the entire article, originally published in Bloomberg BNA.

Baker McKenzie partner Susan Eandi introduces Rowan McKenzie to discuss  employment laws in Hong Kong and give an overview of what changed in 2017, as well as what we can expect in 2018.

Key Takeaways:

  1. Increase in minimum wage – came through in May 2017
  2. Be aware of what right to reinstatement may end up looking like
  3. Cognizant of potential changes in work hours and overtime for low wage earners
  4. Abolition of the Mandatory Provident Fund offset upon termination and any potential relief that may be provided to employers
  5. Staying ahead of potential changes to immigration policy

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Baker McKenzie partner Susan Eandi introduces Chris Burkett from Toronto to talk about employment laws in Canada and give an overview of what’s changed in 2017 as well as what we can expect in 2018.

Key Takeaways:

  1. Employers must review their workplace health and safety policies to ensure that anti-harassment polices are up to date and that training is in place, particularly around sexual harassment.
  2. Review termination clauses in employment agreements to ensure compliance with ESA and clarity of language and intent.
  3. Implement the minimum wage and equal pay obligations that are now in force.
  4. Be proactive in managing the use of cannabis in the workplace, particularly where accommodation requests come into play.
  5. Prepare for expanding supply chain + ESG transparency and global corporate human rights obligations. If operating globally, ensure you have a policy and due diligence program in place to mitigate adverse human rights impacts and lower risk of exposure to human rights lawsuits and reputational damage.

Download now on iTunes | Android | Stitcher | TuneIn | Google Play.

In mid-December, we hosted our Annual California Update in Millbrae, CA. We were so pleased to see many of you in attendance.

Our End-of-Year Newsletter will hit inboxes shortly, but until then – here’s our top 10 New Year’s resolutions for multinationals in 2018:

Continue Reading Top 10 New Year’s Resolutions For California-Based Multinational Employers

Slavery and human trafficking has become a priority for many governments around the world.

The UK Government passed the Modern Slavery Act 2015 to simplify and bring up to date the criminal law in relation to modern slavery and human trafficking. The Act (section 54) imposes a new obligation on UK businesses to publish an annual slavery and human trafficking statement setting out the steps it has taken to ensure slavery and human trafficking is not taking place in any part of its business or supply chain.

What businesses does this impact?

The requirement applies to all businesses that supply goods or services in the UK provided that it has an annual turnover of £36m. It does not need to be a UK registered entity. The turnover does not need to be UK turnover, provided it supplies some goods or services in the UK. The turnover of subsidiary entities (but not parent entities) is included in assessing whether the threshold is met. There is no requirement for the organisation to have a minimum number of employees, a minimum balance sheet total, or to be incorporated (or formed, if it is a partnership) in the UK. As a result, these rules will have extraterritorial effect and apply to a much wider range of organisations than just large companies under the UK Companies Act.

For more, read the informative alert (here) authored by our colleagues in London, Monica Kurnatowska and John Evason.

Reach out to your Baker McKenzie lawyer for the steps businesses should be taking to ensure compliance with the Modern Slavery Act,  as well measures to consider taking with both suppliers and within your own business to address issues of modern slavery.

In July 2017, amid political turmoil and protests by the opposition and the labor unions, president Michel Temer sanctioned a new law implementing the controversial labor reform in Brazil.

Some of the law’s most significant changes impacting US multinationals include:

  • Labor Rights Negotiation: Agreements negotiated between companies and employees may override statutory requirements relating to labor rights such as: vacation usage, work shift, flextime arrangements, reduced meal breaks and remote work, among other points. However, some labor protections, such as FGTS deposits, minimum wage, 13th salary and vacation pay cannot be subject to negotiation.
  • Waivers and Releases of Labor Rights: Employees with college degrees who receive monthly salaries greater than or equal to twice the limit of benefits from the National Social Security Institute (INSS) will be able to negotiate valid release agreements and waive labor rights.
  • Outsourcing: It is now possible to hire service companies to provide services and activities even for those that fall within the company’s core business.
  • Remote Work: The parties to a remote work agreement shall agree on the use of equipment and payment of related business expenses (such as for electricity and internet access). The employee does not have to keep time records.
  • Dismissal for cause: Possibilities of discharge for cause by the employer are expanded beyond the situations under the current rules. Among these are loss of qualification necessary to the employee’s profession, such as a driving license, if caused by the employee’s intentional misconduct.
  • Termination by Mutual Agreement: Termination can be agreed between the parties, in which case severance will be reduced.
  • Mass layoffs: Collective terminations, also known as mass layoffs, will no longer need the agreement of the labor union. The same rules applicable to individual terminations shall apply to collective terminations.
  • Litigation: Employees will have to pay for court costs relating to any pleas that later are deemed groundless. Requirements for filing labor lawsuits are stricter and it will be easier to impose penalties against plaintiffs for litigating in bad faith by filing frivolous suits.

We thank our friend Leticia Ribeiro, a partner at Trench, Rossi e Watanabe (a Brazilian law firm with a cooperation agreement with Baker McKenzie), for her valuable contributions to this post. And, for more information, please contact your Baker McKenzie lawyer.

The TLDR on the new UK pay gap reporting regs:

New Requirements

  • From April 2017, employers with at least 250 employees (which may include some contractors) in the UK will need to publish details of their gender pay gap on an annual basis.
  • The gender pay gap reflects the difference between what women are paid, on average, compared to what men are paid, looking across the company as a whole.
  • Employers must publish six different metrics, including the differences in hourly pay and bonuses between men and women and the proportion of women in each pay quartile.
  • The information will be publicly available and is likely to be considered by employees, potential job applicants, the media and in some cases by clients / customers.
  • Employers will have until April 4, 2018 to publish their first set of data, but it must be based on a “snapshot” of pay data as at April 5, 2017.

New Challenges

  • CALCULATION – The rules are complex and not always clear. Being compliant may require employers to make judgment calls on tricky issues such as whether particular payments or employees are in scope. Employers need to find practical solutions but also want to ensure their calculation approach and their pay gap figures are in line with their peers.
  • PRESENTATION – The government is encouraging employers to explain the causes of their gender pay gap and what they are doing about it. Employers will need to consider carefully what to include in this narrative to best manage multiple stakeholders.
  • CLOSING THE GAP – The Regulations shine a light on the challenges for employers seeking to close the gender pay gap. Considering existing diversity and inclusion initiatives, and considering how to achieve further progress, is a good first step.
  • CLAIMS & AUDITS – The new requirements may prompt more equal pay claims, either because employees misinterpret the figures or because they expose areas of potential discrimination. Some employers are therefore taking a more in-depth look at the discrimination and equal pay risks within their business.

Multinationals Take Note!

  • Outside of the US, legislation either mandating or encouraging gender pay gap reporting is on an uptick (see e.g. Germany and Switzerland)
  • Unfortunately, a one-size-fits-all approach is not a solution. The legal requirements, types of data involved and comparator groups all vary by jurisdiction which means you may end up with very favorable numbers in one country, and something substantially different in another.

Contact your Baker McKenzie lawyer to prepare an action plan to address key potential risks and meet your compliance obligations globally.

Life starts all over again when it gets crisp in the fall.
– F. Scott Fitzgerald

After two years of blogging to our friends in the Lone Star state, we are excited to announce that we are embracing the opportunity for new beginnings this fall. We are turning over a new leaf and expanding our blog to reach all US employers, including those managing operations outside of the US.

The new Employer Report provides legal updates and practical insights about the latest labor and employment issues affecting US multinationals, at both the domestic AND global level.

The original site will be redirected, so no action necessary on your part (other than to spread the word!). The Employer Report will be updated regularly by our US Employment and Compensation lawyers with insights covering a wide range of labor and employment topics, including wage and hour updates, new compliance obligations outside the US, trends concerning the gender pay gap, and much more!

We appreciate your continued support and hope you enjoy the Employer Report.