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As noncompete agreements continue to face legal scrutiny, employers are focusing on trade secret protection as a more sustainable strategy. 

For employers, this shift raises a host of practical questions:

  • What’s happening with noncompete enforcement at the federal and state levels?
  • How can employers tailor noncompetes to remain compliant?
  • Why are trade secrets gaining traction as a more reliable tool?
  • What role does AI play in trade secret risk?
  • What steps should employers take to strengthen protection protocols?

Tune in to this episode of The Employer Rapport, as Baker McKenzie’s Labor & Employment attorneys discuss the current noncompete landscape, explore the benefits of focusing on trade secret protection and offer practical guidance for safeguarding your company’s confidential business information.

Click here to view the video.

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On July 23, the White House unveiled its much-anticipated AI Action Plan. The Action Plan follows President Trump’s Executive Order 14179 of January 23 on “Removing Barriers to American Leadership in Artificial Intelligence”—which directed the development of the Action Plan within 180 days—and subsequent consultation with stakeholders to “define the priority policy actions needed to sustain and enhance America’s AI dominance, and to ensure that unnecessarily burdensome requirements do not hamper private sector AI innovation.” This update provides a summary of the Action Plan and key considerations for businesses developing or deploying AI.

The Action Plan is structured around three pillars: (I) Accelerating AI Innovation, (II) Building American AI Infrastructure, and (III) Leading in International AI Diplomacy and Security. Although, the AI Action Plan is not legally binding in itself, each pillar contains a number of policy recommendations and actions, which will subsequently need to be actioned by various government agencies and institutes.

Pillar I – Accelerating AI Innovation

Pillar I focuses on reducing the impact of regulation that may hamper AI development. To this end, the Action Plan instructs the Office of Management and Budget to “consider a state’s AI regulatory climate when making funding decisions and limit funding if the state’s AI regulatory regimes may hinder the effectiveness of that funding or award.” Pillar I emphasizes the need for workplace action that supports transition to an AI economy, citing AI literary and skill development among key workforce priorities.  The Action Plan also calls for federal- and state-led efforts to evaluate the impact of AI on the labor market. In order to promote advancements in American AI technologies, Pillar I specifically calls for investment in open-source AI models, support for the preparation of high-quality datasets for use in model training, and acceleration of the federal government’s adoption of AI.

Pillar II – Building American AI Infrastructure

Pillar II of the Action Plan includes actions aimed at strengthening the country’s AI infrastructure. The Action Plan seeks to streamline the expansion of America’s semiconductor manufacturing capabilities by removing extraneous policy requirements for CHIPS-funded semiconductor manufacturing operations.  Pillar II also focuses on the fortification of AI systems and other critical infrastructure assets against cybersecurity threats. In order to achieve these goals, the Action Plan proposes various measures to enhance cybersecurity protections such as sharing AI-security threat intelligence across critical infrastructure sectors and developing standards to facilitate the development of resilient and secure AI systems.

Continue Reading US AI Vision in Action: What Businesses Need to Know About the White House AI Action Plan
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As part of our newly launched Doing Business in Canada Guide 2025, Chapter 13 on Labour and Employment offers a comprehensive overview of the legal landscape that governs the Canadian workplace. Whether your organization operates under federal jurisdiction or within one of Canada’s provinces or territories, understanding the dual framework of employment regulation is essential.

This section of our practical resource outlines the foundational elements of Canadian employment law, including minimum employment standards, termination entitlements, and the evolving obligations around workplace policies such as disconnecting from work. Here, our team also explores the nuances of unionization, human rights protections, and the growing emphasis on pay equity and transparency—especially in light of new legislation in Ontario and British Columbia.

Employers will find practical guidance on navigating statutory notice and severance pay, the enforceability of termination clauses, and the implications of civil versus common law across jurisdictions. In this chapter, we also address critical compliance areas such as occupational health and safety, workers’ compensation, privacy, and French language requirements in Québec. Whether your organization is expanding into Canada or refining your local HR strategy, this Guide equips employers with the insights needed to manage risk, support compliance, and foster a fair and inclusive workplace.

Click here to download our Doing Business in Canada Guide 2025.

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For the first time in nearly twenty years, the SEC is considering on a holistic basis whether the current executive compensation disclosure rules serve their core function of efficiently providing investors with material information on which to make voting and investment decisions. 

On June 26, 2025, the SEC hosted a roundtable on executive compensation disclosure featuring various stakeholders, including advisors, investors, and directors, and their discussion touched on a wide range of topics.  In advance of the roundtable, the SEC requested comments from members of the public, including as to the current requirements on perquisite disclosure and whether such disclosure affects board decision-making.   

Our partners Jennifer Broder and Peter Chan were pleased to submit a comment letter discussing suggested ways to modernize perquisite disclosure given the modern realities facing CEOs and the distortions created by the existing rules. 

You can read their comment letter here.

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US immigration enforcement – both at the border and in communities across the country – has created widespread anxiety for employers and foreign-national employees due to the rapid changes in policies and their enforcement by US immigration authorities. The recently passed “One Big Beautiful Bill Act” significantly increases DHS’ budget for key immigration enforcement priorities such as border security operations and interior enforcement operations. The dramatic expansion of DHS’ enforcement capabilities will likely have lasting effects on the US immigration system, which will continue to impact employers and employees alike.

In our latest Mobility Minute video chat, our Global Immigration and Mobility attorneys address key issues such as the new E-Verify notification procedure and share guidance for employers and insights concerning worksite raids, denaturalization, and I-9 audits. Given the heightened anxiety among employers and employees, our attorneys also provide proactive steps employers can take to prepare for potential worksite enforcement actions, such as reviewing and updating policies, conducting audits, and staying informed about legal changes and enforcement trends.

Click here to view the video.

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On July 4, President Trump signed the ‘One Big Beautiful Bill Act’ into law, including provisions reducing federal income tax on qualified tips and overtime compensation.

For employers, the new law raises a host of practical questions:

  • What do employers need to track and report?
  • How will payroll systems need to adapt?
  • What guidance can we expect as we move forward?
  • How might state tax rules interact with these federal changes?

In this video chat, our Employment & Compensation and Tax partners unpack this significant development in federal tax policy. Tune in to discover what these changes may mean for your operations, and for practical tips to navigate the new law.

Click here to view the video.

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Overview

We reported in May on the provisions in the House’s One Big Beautiful Bill addressing two of President Trump’s campaign promises – no taxation of tips and overtime.  The Senate has now passed its version of the One Big Beautiful Bill, which includes its version of these provisions in sections 70201 and 70202.  See our prior blog post here for a detailed discussion of the House provisions.  While the basic structure of the provisions are similar, there are differences in the details. 

What Stays the Same

Above-the-line deductions for qualified tips and qualified overtime

Like the House bill, the Senate bill would give certain workers an above-the-line deduction for “qualified tips” and “qualified overtime compensation” included on an information return furnished to the individual or reported on a Form 4137 (for tips) for taxable years beginning after December 31, 2024, and ending for taxable years beginning after December 31, 2028.  This means the deductions are proposed to be retroactive and proposed to apply to amounts paid even before enactment of the bill.  Making this deduction available to the worker creates reporting and withholding obligations for the service recipient, as discussed in more detail below. 

In order to be deductible as qualified overtime compensation under the Senate provision, as was true with the House provision, the payment must be overtime paid as required under section 7 of the Fair Labor Standards Act that is in excess of the regular rate (as used in that section) at which such individual is employed. Qualified overtime compensation does not include any amount treated as a qualified tip.

In order to be deductible under the Senate provision, as was the case with the House provision, qualified tips generally must be paid voluntarily to a person who works in an occupation which traditionally and customarily received tips on or before December 31, 2024. The Secretary of the Treasury is directed to provide a list of occupations that traditionally and customarily received tips in 2024 and before within 90 days of enactment. 

As was the case in the House bill, the Senate bill provides that workers in certain specified businesses are not eligible for the tip deduction.  The businesses excluded are ones providing services in accounting, health, law, actuarial science, athletics, brokerage services, consulting, financial services, or the performing arts.  In the case of tips received in the course of a trade or business (other than as an employee of an employer), the deduction is limited to gross income from the business less other deductions allocable to the business.

Continue Reading Senate Passes No Tax on Tips and Overtime Provisions
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Multinational employers operating in the Middle East and Africa face escalating geopolitical tension, challenging economic conditions and evolving social expectations. Our recent webinar covered how countries across MEA are responding to these pressures—and what employers need to know to stay compliant and competitive.

Click here for a link to the recording, and also a preview of the discussion:

A Bird’s Eye View

  • Economically, a mixed bag: while Morocco, the UAE, and Saudi Arabia are experiencing growth and attracting foreign investment, South Africa and Türkiye are grappling with more challenging conditions.
  • Escalating conflict: Regional conflict in neighboring jurisdictions in the Middle East have wide ranging implications for global businesses.
  • 2025 is a landmark year for labor law reform: Significant reforms in Saudi Arabia and the UAE are already in effect, plus anticipated reforms in Morocco, South Africa, and Türkiye.

Country Highlights

Morocco

  • A new labor code is expected by the end of 2025, aiming to simplify hiring and termination procedures and formally regulate remote work.
  • Social protection reforms now cover informal and domestic workers, with legal recognition of unpaid domestic labor under consideration.
  • A new strike law (effective August 2025) introduces protections against retaliation and bans replacement workers during strikes.

Saudi Arabia

  • 2025 labor law amendments include extended maternity leave (12 weeks), clarified paternity leave, and compensatory time off for overtime.
  • Employers must now provide housing and transport allowances or cash equivalents.
  • Litigation risks are relatively high and mutual terminations are common due to employee-friendly courts and the absence of at-will employment.

South Africa

  • Amendments to the Employment Equity Act mean only employers with 50+ employees must comply with transformation plans.
  • A new Code of Good Practice on Dismissal is expected to simplify pre-termination processes, moving away from trial-like hearings.
  • DEI remains a strategic imperative, with persistent inequalities driving transformation efforts.

Türkiye

  • From January 2025, small employers must comply with occupational health and safety requirements or face fines.
  • Labor courts are highly employee-friendly; mediation is increasingly used to avoid litigation.
  • A new circular on workplace harassment encourages employers to adopt anti-harassment policies and highlights the importance of training.

United Arab Emirates

  • Whistleblower protections are now in force per the ADGM Employment Regulations 2024, with penalties including license suspension for noncompliance.
  • Litigation risk is low unless retaliation is involved; discrimination claims are rare but emerging.
  • Employee wellbeing is gaining importance in the UAE, with many multinational companies implementing wellbeing initiatives, including employee assistance programs.

Tune in to learn more, and as always, reach out to your Baker McKenzie employment lawyer with any questions.

Don’t miss our upcoming event!

Join us for a webinar on September 9th as Baker McKenzie lawyers from the United States, Saudi Arabia, and the United Arab Emirates provide practical tips from a corporate, tax, employment, and compensation perspective to navigate the evolving legal and business landscape in the Middle East. Click here to learn more and to register.

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As summer is upon us, many visa holders are planning their travels, and reentry into the United States has become a significant concern. The fast-paced changes in policies and their enforcement by immigration officers at US ports of entry have created widespread anxiety for both employers and travelers.

In our latest Mobility Minute video chat, our Global Immigration and Mobility attorneys address key issues such as travel documents and visa stamping, impacts of federal workforce changes, trends in entry and reentry into the US, travel bans and implications, and proactive steps for employers.

Click here to watch the Mobility Minute.

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In a recent conversation with our colleagues across the Americas—in Argentina, Brazil, Canada, Colombia, Mexico and the United States—we examined the latest developments affecting multinational employers in the region. Please click here to tune in to the recording at your convenience. Read on for a preview of some of the key changes our team discussed.

Several common themes are playing out across these countries in the Americas. Like the rest of the world, the Americas are significantly impacted by escalating trade tensions, inflation, and deep political polarization, creating a tricky operating environment for multinational companies and underscoring the need to maximize business agility. While many businesses appreciate the flexibility of contracting and third-party arrangements, employment misclassification remains a costly risk, particularly in countries like Brazil, Colombia, Mexico, and the US.

Inclusion, diversity, and equity remain in the spotlight and continue to be important areas for strategic workforce planning as well as a focus for litigation risk assessments. We are also seeing a greater focus on gender equality in countries like Brazil, Canada, and Mexico, as well as an increase in statutory employment protections (e.g., leave entitlements, new health and safety obligations, etc.).

At a high level, here are a few of the specific changes — discussed in further detail in the recording —unfolding in particular countries:

  • Under President Javier Milei’s government in Argentina, a key objective for 2025 is to implement labor reforms aimed at reducing labor costs and promoting a more flexible and dynamic labor market.
  • Brazil’s most recent material employment law changes concern equal pay and workplace health and safety.
  • Canada‘s employment law landscape has evolved with greater judicial scrutiny of termination clauses (particularly in Ontario), a marked increase in wrongful dismissal litigation, and growing obligations with respect to pay equity (e.g., in Ontario and British Columbia).
  • In Colombia, recent labor law reforms have aimed at strengthening workers’ rights and improving job security. The most significant developments include new sexual harassment prevention regulations, special protections related to paternity leave, and new regulations on occupational medical evaluations.
  • Mexico has undertaken significant labor reforms to enhance worker protections and promote fair labor practices. Recent changes are aimed at improving working conditions with respect to digital platform work, providing new protections related to gender equality, and reducing overtime as a form of labor exploitation.
  • In the US, employment law changes continue to be driven primarily by state legislators, and we are seeing an increase in employee protections with respect to paid leave, discrimination protections, minimum wages, and restrictions on noncompete agreements. In recent years, and as underscored by President Trump’s January 2025 DEI Executive Orders, we’ve seen growing political and social resistance to workplace DEI programs, particularly from conservative action groups and political figures. As a result of increasing scrutiny, many US-based companies are conducting DEI health checks under legal privilege to assess legal risk and shore up any areas of potential vulnerability.

Tune in to learn more, and as always, reach out to your Baker McKenzie employment lawyer with any questions.

*Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law.